Opportunity to be mortgage free at 33

MrChips987123

Hi All, 

We've recently found ourselves in a position to be mortgage free this year, by liquidating 2 BTL properties and moving from our current house to something a little smaller. We're north Midlands so properties are relatively reasonable.

Current debt is just under £450k, with around 850k in assets backing that up. 

My question is, do we sell everything now to clear all the mortgages and buy somewhere for around 300k, allowing for CGT etc? Clearing a PCP deal in the process.

Or do we continue on as is with the hope that the current properties continue to appreciate?

Up until the mortgage rate rises we were netting around 7k a year in profit, though now that's more like 1.5k.

Our current earnings around 130k gross, so we'd have around 6k spare cash per month to further invest. My question is, in what? I'm really keen to ensure we're outstripping inflation if at all possible

Hoenir

MrChips987123 said:

Up until the mortgage rate rises we were netting around 7k a year in profit, though now that's more like 1.5k.

Appears extremely marginal. Only take an unexpected loss of income or item of expenditure to be loss making. Property in the longer term does require a reasonable maintenance budget that's set aside over the years of ownership as well. 

MrChips987123

Hoenir said:

MrChips987123 said:

Up until the mortgage rate rises we were netting around 7k a year in profit, though now that's more like 1.5k.

Appears extremely marginal. Only take an unexpected loss of income or item of expenditure to be loss making. Property in the longer term does require a reasonable maintenance budget that's set aside over the years of ownership as well. 

Yes, it's got that way. Prior to the rate rises we could keep the rents relatively cheap for the area and also afford to keep the houses to a decent standard. Unfortunately there isn't really the profit in it to do so. So it's either make the rents higher, almost £200 extra PCM putting us at the higher end or to sell.

This year, were probably 4k out of pocket due to issues. Though, that's another thread!

itsthelittlethings

You’re still making a profit, someone else is paying your mortgage for you.

Everyone would love to outstrip inflation, if there was an easy way everyone would be doing it.