Sell or rent out? Heart over head we think

mebedforduk

Morning all

We bought a second bigger Ugly house in 2020 as the quaint country cottage we currently live in ( 15 years) on the edge of a village was about to get swallowed up into a new housing estate.

However, last year the planning for the final phase was refused and lost at appeal, so although not surrounded at the moment, no doubt the cottage will be in the future.

We dont love the second (Ugly) house but Kirstie and Phil would be happy as it ticks boxes for idylic location, cheaper running and can cope with multiple boomerang kids returning.

So numbers:

Stamp duty reclaim is circa £16K
Cottage 150K interest only mortgage that we can pay off
Cottage will rent at £900 per month and there is only one other available rent in a 5 mile radius, so demand is high
Taking money from the bank at 1-2% to clear the mort will hopefully fair better in the bricks and mortar even with a possible short term drop

Heart 
We have fallen back in love with the cottage after a few months of titivating and de cluttering
We will lose village friends and neighbours ( only a hand full of houses near Ugly house)

The intention was to sell Cottage but are we trying to talk ourselves into hanging onto it and making the numbers look good?

We have never been landlords before and it does not look to be an easy route

Ta


PS
Semi retired in our early 50s so no big income just passive from investments etc

michelle09

Do you want to be landlords? What would your profit be after tax? 

And if it's a sentiment place- how will you cope if tenants don't pay rent and trash the place?

freesha

Are you sure you want to set up a residential lettings business at your time of life?

Woolsery

freesha said:

Are you sure you want to set up a residential lettings business at your time of life?

Speaking as someone who completely changed their way of life at the age of 61, someone's early 50s is hardly one foot in the grave, but I agree that the chosen path ought to match the aptitudes and abilities of the person concerned.

 I'd also question the wisdom of starting a lettings business at a time when the future is so uncertain. It's not long since landlords were rendered almost powerless by a so-called 'emergency,' the aftershocks of which are still being felt.

Ramouth

If it is a pretty cottage in a nice location, would short term let’s be an option?  Then you could still make use of it when you have no bookings and you reduce the risks associated with non paying tenants.  

Can’t quite believe I have just suggested this as holiday let’s have destroyed our local rental market (Cornwall) and I am somewhat against it in principle, but it might be a good compromise for you and would leave you with the option of selling at any time in the future.

mebedforduk

Thanks All

It does feel like a sentiment issue that is clouding our thoughts, that and the nice warm weather and being able to actually enjoy the Cottage since reducing work hours 

We sold our company last year so work now is just a bit of easy freelance ironically for the same company we used to own. So we are now getting to enjoy the cottage as a home rather than a place to sleep whist we worked 6-7 days a week

Ramouth - Yes we have thought about this and there one in the village already that has decent bookings and a local couple do the change over who would probably do ours. Its an inglenook fireplace, exposed beams type place so certainly has the AirB&B/ let market appeal

Woolsery - Agreed dont feel over the hill just yet and would like to think we have some ability left in the grey cells

 Freesa - Difficult one, could we do it? Probably and have friends and network who already do. Can we be bothered? Hmm not sure


Probably the sensible route is to sell Cottage, bank / invest the money then have a reality check to ask ourselves would we buy it back in 5 years if it came back on the market. 

Who knows what the market / returns will do in the next 5 years. Inflation could erode the pot, or house prices could fall and tenants not pay

Ramouth

Probably the sensible route is to sell Cottage, bank / invest the money then have a reality check to ask ourselves would we buy it back in 5 years if it came back on the market. 

Who knows what the market / returns will do in the next 5 years. Inflation could erode the pot, or house prices could fall and tenants not pay

This would give you the flexibility to choose from more houses in 5 years.  You may find a different cottage you love even more.  Or something completely different that you don’t know you like yet.  

As you say, you can’t predict the future, perhaps trying to embrace the adventure will make you feel better about selling?

Woolsery

We can't predict the future , but we can observe how much things have changed in the past 3 years or so and make educated guesses.

For example, fuel prices are making a major impact on our lives, and while they may currently be artificially inflated, the end of easily obtained oil is with us and it's unlikely cheap heat and travel will ever return. An old, country cottage, enviable in summer, may be a expensive thing to keep warm in winter. It's already impossible to set up permanent rentals with an EPC below E and who's to say that relatively low standard won't change to D or C? The government have been talking about C by 2025. While that might just be more scare tactics by increasingly overbearing officialdom, it can't be ruled out.

You need to do pro and con lists based not just on how things are now, but also where they seem to be going.

mebedforduk

Ramouth said:

Probably the sensible route is to sell Cottage, bank / invest the money then have a reality check to ask ourselves would we buy it back in 5 years if it came back on the market. 

Who knows what the market / returns will do in the next 5 years. Inflation could erode the pot, or house prices could fall and tenants not pay

This would give you the flexibility to choose from more houses in 5 years.  You may find a different cottage you love even more.  Or something completely different that you don’t know you like yet.  

As you say, you can’t predict the future, perhaps trying to embrace the adventure will make you feel better about selling?

Yes, maybe once we make this move ( its only a few miles away) we could well feel better about moving away or as you say something different in a few years.
I do think because we have given up work and moving house it is clouding how we feel and crave to just keep things "normal & safe"
We have gone from a converted Vicarage, to an Annexe of a big country pile to a C17 cottage and now it will be a 1980s self build footballers wives.   So completely not our trend to date

mebedforduk

Woolsery - Yes you have hit the nail on one of the big pros for moving.

Ugly House - self build future proofed with U values of 0.3, not bad for a 1980s build!  We have also fitted PV + battery, along with 14KW woodburner ( negotiating buying 1 acre of adjoining woodland)

Cottage - Back to brick refurbed and now insulated but keeping all the features. U value 1.2 and yes bloody cold in the winter still. EPC as you say will be difficult.
Sitting in front of the fire on cold wet winter nights might not shine quite as much with the elec meter spinning

Thanks for your words and thoughts

Rising bills will force at least one grown up kid back home so a big sprawling place is more suited to kids in their 30s returning

Bendy_House

Hi Mbfu.

I can't quite follow the options you are considering.

You are seemingly toying with either renting out the cottage, or selling it? Why don't these two options equally apply to the 'sensible' house? 

Where are you actually living at the moment? And what's the other house doing?