Sell or Rent out second property

popzilla

I have seen other posts on this subject but invariably including the consequences of the mortgage on the second property.  I am in the fortunate position of owning outright. Moved back into this property (previously let)while renovating new home. So do I re-let or sell and find alternative investment for 200.000pounds (pounds key not working!)  Rental income after agent fees etc around 750pounds, fifty year old ground floor maisonette in a small block (no maintenance fees, low ground rent) that should sell or let quite easily.
Don't much care for being a landlord and fifty year old building makes me a little nervous of big unforeseen expenses down the line. On the other hand, steady income and hopefully increasing in value over time, although that looks less certain in the current climate.

FlorayG

In the end it's going to be entirely up to you
Are you aware of the new Renters Rights Bill soon to become law and the likelihood of all properties having to reach and EPC standard of 'C' soon? This is putting off a lot of landlords.
See how much interest you could get with that money in a savings account and compare that to the amount you realise as profit from renting. If they are very similar then sell, because a savings account doesn't give you unexpected grief. If the rent profit is greater, consider how much more grief that extra is worth

RelievedSheff

I think in your situation I would sell the flat and invest the money elsewhere.

thegreenone

According to the Bank of England calculator, if you put £200000 in a fixed rate account, at 4.5% interest (if you can get it) it would give you £750 per month interest. Zero effort apart from your tax return.

Albermarle

If you do sell and are wondering how to best save/invest the money, then you can ask on this forum.
Savings & investments — MoneySavingExpert Forum

There are regular questions on there along the lines of ' I have inherited £100K and do not what to do with it' and similar.
If you do post there then give as much detail about your overall situation as possible, as you will get better answers that way.
The key point on deciding what to do with large sums of money is what do you want to achieve with it, and the time scale. This then tends to define the best way to save/invest it.

ReadySteadyPop

thegreenone said:

According to the Bank of England calculator, if you put £200000 in a fixed rate account, at 4.5% interest (if you can get it) it would give you £750 per month interest. Zero effort apart from your tax return.

Good point.

ReadySteadyPop

popzilla said:

I have seen other posts on this subject but invariably including the consequences of the mortgage on the second property.  I am in the fortunate position of owning outright. Moved back into this property (previously let)while renovating new home. So do I re-let or sell and find alternative investment for 200.000pounds (pounds key not working!)  Rental income after agent fees etc around 750pounds, fifty year old ground floor maisonette in a small block (no maintenance fees, low ground rent) that should sell or let quite easily.
Don't much care for being a landlord and fifty year old building makes me a little nervous of big unforeseen expenses down the line. On the other hand, steady income and hopefully increasing in value over time, although that looks less certain in the current climate.

Sell it quickly in case mortgage rates start moving up again.

Stubod

..sell sell sell.....not worth the hastle of being a single property landlord......IMHO....

saajan_12

popzilla said:

I have seen other posts on this subject but invariably including the consequences of the mortgage on the second property.  I am in the fortunate position of owning outright. Moved back into this property (previously let)while renovating new home. So do I re-let or sell and find alternative investment for 200.000pounds (pounds key not working!)  Rental income after agent fees etc around 750pounds, fifty year old ground floor maisonette in a small block (no maintenance fees, low ground rent) that should sell or let quite easily.
Don't much care for being a landlord and fifty year old building makes me a little nervous of big unforeseen expenses down the line. On the other hand, steady income and hopefully increasing in value over time, although that looks less certain in the current climate.

Assuming a 5% void if say the average tenant stays for 2-3 years and then it takes a month to relet. 

750 x 12 months / 200k value x 95% occupancy = 4.275% return per year, not counting any capital increase. 

Currently, many high yield bank accounts pay that much interest without the faff, but they may not always and of course you don't have any capital increase. 

So the question really becomes what do you think the return will be on other investments, eg a stock portfolio. On 200k, those would also provide a comparable or higher income on average. 

Uriziel

I would sell as you do not know what kind of tenants you will be getting. What if they refuse to leave? Are you happy to deal with all the stress of having tenants that do not pay rent and that you cannot remove from the property? Are you happy to pay for all the repair yourself and people refusing to buy your property after you rented it out because the tenants that did not pay you rent for a year damaged it? I'd just sell and get it over with.

Bigphil1474

Depends on the property as well. You might make the same money monthly on savings vs rent, but your property will also be going up in value. Typically, houses have gone up by varying amounts depending where they are and condition, but it's worth looking at that aspect. If it's worth £200k and house prices are going up by just 2.5% for example, that's another £400 plus you would be getting if you kept the property. Swings and roundabouts I'd say.