What would you do?

inkie1

Interested in others' thoughts, please.
We have a 2 bed terrace that we bought for family members to live in - they have now moved out and got their own place. Its compliant in terms of gas and electric etc, we've had new windows fitted etc recently...probably worth £90K - paid £44K and so if sold would be subject to CGT.  
We really need to make a decision on whether to rent it out (would be £600 pcm) or to sell - we don't really need the capital - we own outright and rental would provide a steady income stream for the rest of our lives (we are in our 50s). Meanwhile its costing me around £250 per month in terms of utilities/council tax/broadband etc as ive not cancelled them since family moved out. My reckoning is that we are missing out on c£850 per month (lost rental and what we would save on the bills)
Any thoughts? 

pinkshoes

What's rental demand like in the area?

As it's all set up to be rented out, then if there's good demand so you can take your pick of renters, then I'd probably rent it out.

Don't forget to read the LL's guide to renting to make sure you do everything by the book...

MattMattMattUK

I would probably sell because I do not feel the next 5-10 years are going to be a fun period to be a landlord and friends and family have had a pretty rough four years being landlords and are all selling up or already sold. It might be different where you are and it will very much depend on your luck of the draw with tenants. 

BonaDea

My own view is that the older you are, the less sense it makes to be a LL.  It's a risky income stream (eggs in one basket) and a lot of hassle (tenants, letting agents, regulation, legal obligations) which will only get worse in the future, and do you really want to be dealing with all that in your 80s or 90s?  Even if you still have the inclination then (which I'd doubt), would you have the cognitive ability to do so and to keep up with ever-changing policy?  Far better to stick the money in a combination of global index trackers (in ISAs), premium bonds, gilts, and high-interest accounts to provide a low-cost, low-bother, zero- or low-tax diversified income stream.  

Jemma01

I would rent, my siblings and father all have rentals. But you could also put it in a pension for the future?

Brie

I would only consider renting if I put the property fully with an agency as I wouldn't want the hassle.  Preferably one that guaranteed income.

ThorOdinson

Sell. Don't become a landlord.

EssexHebridean

Ten years ago I would probably have said that in your position it was a no brainer to let it out. Now though? Honestly, I’d sell. 

Mr.Generous

Brie said:

I would only consider renting if I put the property fully with an agency as I wouldn't want the hassle.  Preferably one that guaranteed income.

So you think the agency decides everything and just takes care of it without any hassle?

Brie

Mr.Generous said:

Brie said:

I would only consider renting if I put the property fully with an agency as I wouldn't want the hassle.  Preferably one that guaranteed income.

So you think the agency decides everything and just takes care of it without any hassle?

Oh no.  I think that the agency is a buffer between me and the tenants.  Mom used to rent a lot of property and would get phone calls at 2 am because someone had forgotten how to turn on the heating or similar.  I wouldn't want that. 

I'd also want some sort of guarantee about the income as I've seen too many people simply stop paying.  I don't have the money to buy property to rent out so admittedly I haven't looked at it in detail but locally the council claims to guarantee and manage properties fully on behalf of the owner.  Obviously the details in the T&Cs would need to be examined carefully.

mlz1413

It's a bit of a close call for me, I immediately thought rent, but at £600pm less fees less tax it may well end up being the same as a high interest account. 

£90,000 less CGT (could it be in joint names to lessen that? I'm not a tax accountant I just think I've read that before)
At 4 -5% interest would be hassle free and 20k per tax year can go into an ISA so it's tax free interest.

But rental values go up every year and in 10 yrs that could be a good income if you retire in your 60s.

Also if you continue to own it might be worth selling in your 70s as it would give a nest egg to top up pensions.

If you want to do loads of travelling and buy a new car I'd sell and enjoy the money now.

If you can have a good lifestyle without a cash injection I'd probably keep it as a rental.

Definitely rent via an agent or to a guaranteed income scheme. Keep the property in good shape too, the spend with cut your taxes.