sell or keep BTL?

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82112237#Comment_82112237

@sherlock228's net proceeds after tax seemed appealing, but the OP did not mention the quantum of loan outstanding. Would be useful if OP could confirm that figure also to determine the overall attraction of selling sooner rather than later.

Also note there is an inheritance in the back ground, would also be helpful to know the quantum of this and the comparative return it could achieve if not used on repaying outstanding borrowings.

horsewithnoname

https://forums.moneysavingexpert.com/discussion/6680707/sell-or-keep-btl

if you pay tax at 40% you do realise that you get to keep the other 60%? So do you need the profit you make or not? Could you do better selling it and getting interest on the money? Those are the sort of questions you need to consider

clairec666

What's your experience of being a landlord? If you've got good tenants who are likely to want to stay long-term, keeping the flat may not seem like a bad option. You say you're making "barely any profit" at the moment - if you get stuck with a troublesome tenant though, you might end up making a loss. Worst case scenario, you get tenants who fall into rent arrears, take ages to evict, and leave you with a massive repair bill. Not to mention the stress.

Best case scenario - if your tenants want to buy the property from you. Worth checking if they're interested.

SpendingMoney

there’s a £120k interest only mortgage on the property, and that amounts to 5.3k annually. And by the time I pay agency fees, repairs etc & tax, there’s only capital growth.

I could use the inheritance to pay it off entirely, and also my current mortgage.

But I’d like to move to a house (currently in a 3-bed flat) so that would be a higher priority.

I use a letting agent to manage it (as it’s in a different city) & they select good tenants, never any problems in 20 years.

I’m inclined to sell in the spring.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82113767#Comment_82113767

Hmmm, so after paying off your mortgage and based on @sherlock228's tax computation, your net proceeds nearer £78,000?

That said I would tend to agree to keep your inheritance in the background for your future house move, and progress with your investment property sale when you feel ready to do so despite the much reduced proceeds you can eventually expect.

Bigphil1474

AIUI - your inheritance will be tax free, but if you pay off your mortgage with it, the extra income/profit you receive from the rent (as you no longer pay the mortgage) will be taxable.

_Penny_Dreadful

https://forums.moneysavingexpert.com/discussion/comment/82111941#Comment_82111941

Are you buying a new home with your partner or by yourself? If jointly with your partner do they own the home you currently live in and will it be sold to help pay for the new home? It makes a difference to the additional swelling supplement due.