I've asked before, but would sell up or rent out in my situation?

IAMIAM

I have become unhappy where I live (6 years), think its time to move on. I do not know where I want to buy again (area).

House Value - 250k
Mortgage - 150k
I've gone onto a 2 year tracker mortgage
Only other 'debt' is a car payment of £300

Do I take out equity and rent out my property and forget about it? Rental will be around £1k per month.

Or sell up, bank 100k (premium bonds & instant access) and go into rented for 6-12 months (rental payments coming out of my salary just like mortgage would) before deciding on where to buy. I do not want a chain and do not want to be rushed into buying and selling same time.

Age 40, salary circa 60k. Most people have said I have to sell up and do the latter as rental on 1 property with my salary and tax would be making me worse off including the hastle of tenants. Its definitely a property I do not want to return to and have given up on doing work to it.

What would you do?

Brie

Sell. 

Being a landlord/lady is a major hassle and full of lots of ways to mess it all up, including depending on rental income that never materialises.  Should you actually have good tenants that pay on time and are well behaved in general you'll still have lots of other expenses, might need to use an accountant, have to change your mortgage to a BTL.  And won't you be losing 40% of the rental income to tax so only banking £600 max a month?  And then you decide to sell in a few years and have to pay CGT as well.

Herzlos

Sell, and look for new options as soon as you can. You can always avoid a chain by moving into rented/short term but you can't really speed up the purchase of your new place. 

Unless you're planning to spend a while moving around to get a feel for where you'd prefer to stay. 

Elliott.T123

I would not be renting your property out in your situation!

With your salary you will be paying 40% income tax so down to £600 a month straight away. From that you will need to cover any other things that crop up and need fixing / replacing. You will  need to factor in empty periods or periods of non-paying tennants.

Not worth it at all, possibly if you could guarantee that the area was going to skyrocket in price, maybe just maybe but no one can make that promise so no.

The rent vs buy decision comes down to you ultimately. Renting is likely going to be more expensive but if there isnt a house you want to buy and move into the renting while you find one is the best option.

IAMIAM

Herzlos said:

Sell, and look for new options as soon as you can. You can always avoid a chain by moving into rented/short term but you can't really speed up the purchase of your new place. 

Unless you're planning to spend a while moving around to get a feel for where you'd prefer to stay. 

I am tempted to do just this, for 6, 12, 18 months MAX as long as I still have my 100k, I am sure that I wont be impacted too much by rising prices over a couple of years? And hypothetically, 100k is enough deposit for a 1 million house?

RAS

If you rent it out you'd also need to pay for the EIRC, gas safety certificate etc and probably about 12% for an agent to manage it unless you live locally or have a raft of tame trades. 

Add to which a tenant from hell could cost £xxk to remove and even a decent one derail your planned purchase.

Tabieth

Sell. Far less hassle and stress than being a landlord. 

HouseMartin567

IAMIAM said:

Herzlos said:

Sell, and look for new options as soon as you can. You can always avoid a chain by moving into rented/short term but you can't really speed up the purchase of your new place. 

Unless you're planning to spend a while moving around to get a feel for where you'd prefer to stay. 

I am tempted to do just this, for 6, 12, 18 months MAX as long as I still have my 100k, I am sure that I wont be impacted too much by rising prices over a couple of years? And hypothetically, 100k is enough deposit for a 1 million house?

Yes, if you have enough income (approx £200k per annum) to support a £900k mortgage.

The other thing that jumped out at me was you saying ‘rent it out and forget about it’. Even when employing a letting agency you can’t forget about it - they’ll always be ringing you telling you there is a problem you need to pay for.

I agree with the other posters that you should sell. The number don’t stack up when you take into account tax, letting agent, repairs, voids, etc.