To sell the property or keep renting out

Girlinblue

Hi. 
I have been trying to make a decision on this for a while and keep going round  the circles with it. Maybe someone can help me see what I'm not seeing. 

The situation:
I have been trying to sell my second property up north since February as my daughter wanted to buy something in London. We lost two buyers in the meantime for different reasons. We just found a potential new buyer. In the meantime my daughter's circumstances changed and she doesn't want to buy now but will do in a 1.5-2 years . 
My dilemma is whether to sell and accept the offer on the house now and have some cash ready for when we need to buy or continue renting it out for a 1.5-2 years and sell then. I'm aware that the inflation is inevitable and house prices might go up (less up north) or also can go down. The property might slightly depreciate in value due to wear & tear. There might be difficulties with tenants, etc (we already had that). I will also have to pay more tax on capital gains. My rental income will be taxed too and I will still have to pay some mortgage on that property, though much less than the rental income.
Equally, I'm not a high risk investor, so if we sell and get the cash, the return might not be very high , The money might lose value due to the inflation. 

Any thoughts on this  might help me with decision.

Many thanks in advance.

JGB1955

If it were me (and it's not) I would ditch the whole rental scenario and put my money either in a 90 day account at 2.26% or a one year fixed account at 3.2%.  I would then sleep very happily for the next 90 days....

El_Torro

My first thought is that you've been trying to sell since February, which is a pretty long time. Now that you have a keen buyer I'd think twice about telling them no. 

Sure, there are risks in whatever you do. Personally I'd be tempted to keep renting the place out, as long as you're confident you'll be able to sell it relatively quickly when the time comes. If you're not confident of this happening then I'd probably sell it to the person who wants to buy it now.

Girlinblue

Thanks very much to both replies! really good points for me to consider. 

Albermarle

Equally, I'm not a high risk investor

Buying property for rent is actually quite a high risk game. Especially since many of the tax breaks disappeared,

If you did sell for cash and wanted to use the money within the next couple of years, then better to stay in cash, even if inflation is an issue. Investing in the financial markets ( and property ) is risky in the short term, but usually OK in the long term .

Girlinblue

Many thanks Albermarle. very helpful/ Makes me feel more confident in wanting to sell/

Millyonare

A bird in the hand...

For me, I'd sell the house now.

garyelder

Sold one last year cleared 300k got another flat No mortgage what I rent out

Oasis1

I would sell

george4064

Just sell it, sounds like you have a good reason to realise the funds so don't mess around and do it. Your daughter will be glad, as you'll be in a position to gift her the money needed to buy her house.

PawelK

If I understand correctly, your worry about inflation eroding your cash from the sale may have less impact than you think. If you'll use it for a property purchase down the line and the housing market goes into the cooling off period you may have deflation as the prices may drop. Inflation doesn't apply to everyone or on every product and service we buy. I'd sell now as well and hold onto the cash especially that I'm expecting few more interest rises by BoE and hopefully saving rates too. 
Out of curiosity, what's your current ROI on the property you let out?