Should I sell my 2nd home or keep it????

matthewse

teabelly wrote: »

An accountant is certainly worth talking to. I suspect they don't want to say in case they are wrong as there are a lot of unknowns and ifs etc.

It might be worth asking the question on the singingpig forum. It is a forum for investors and business minded people and they may be able to point you to professionals. There are experienced investors, newbies and all sorts of business people on there.

It can only be your call and you may make a choice that you later regret but that is life unfortunately. Sometimes with difficult decisions I toss a coin then follow what my gut instinct tells me from that.

Thanks a million - I will look up this forum.

matthewse

TTMCMschine wrote: »

How about over paying on your mortgage, if you can afford to, and are allowed to. Could you do it in ten years? That way you'd save a ton on interest. By the time you've paid off your mortgage any downturn should have corrected itself (you haven't been hit YET). Try using a mortgage calculator, because the interest you might save may be tempting. Any ctg, etc will more than have wiped itself out by the interest you will have saved youself. Then any rent you receive after that you can either save (minus costs), use as an income supplement etc - meanwhile your flat should be appreciating in value. I have to say - i'm not very good at stuff like this - so it might be a rubbish idea, but it's another option.

This is something I have not thought about!!! Good idea. I will work out my figures and see how soon I can get my mortgage paid off. I do like the idea of seeing a return for my capital sooner and after 10 years if I don't get it rented I won't be as stressed. The idea of making a decision in 10 years rather than 20 whether to sell it is more appealing. Thanks

dolcevita

teabelly wrote: »

.....It might be worth asking the question on the singingpig forum. It is a forum for investors and business minded people and they may be able to point you to professionals. There are experienced investors, newbies and all sorts of business people on there.

.

But there are even more liars, thieves, chancers, dreamers and
pseudo-businessmen on there as well.

Pez2

matthewse wrote: »

I think you have summed it up GavP. I think this is my situation and it is because of what people are saying that I am torn. I also don't want to look back in 21 years and kick myself for a bad decision - which I know I will do!!!!

But whichever option you choose their will always be "what ifs". The trick is just not to think about them too much and get on with things.

For what it's worth, if I were in your situation I would sell the flat and use the proceeds to pay down some of the mortgage on my home. You'll be paying that mortgage whatever happens to property prices so you'll benefit either way, whereas if you keep the flat you're basically taking a punt that the value of the property will go up and not down. If you sell and property shoots up again then, yeah, maybe you'll kick yourself, but if you keep it and it goes down (which I think is a distinct possibility at the moment) then you'll be kicking yourself as well. That's why I think the best strategy is to weigh up all the options for a bit, go with your gut and then forget all the "what ifs" and "if onlys".

Old_No.7

Hi there, I've just been through the same thought process as you: I own a flat with a friend, we let it out without too much hassle, and we have some money left most months (about £300pm, but for now we save this for future repairs/improvements). My friend wanted to sell as the price had shot up, but I have decided it's better to keep it for now. Neither of us need the money of the sale, but we will both need money in the future (not much in terms of pension saved up so far). You only pay tax when you sell, and even then it's not that bad (I know some people will kill me for this, but I really believe the CGT is v. reasonable here, plus you pay tax, or worse, the banks, for most other investments too)
But what I noticed when we were going through it, and it took us MONTHS to get there, is that it's not a straightforward decision: I wrote down all the pros and cons, but there are so many unknown factors, it's impossible to know for sure what the best thing is to do. Very similar feeling to what you're having: you almost want someone to make the decision for you, to stop the agonising! But then one day I woke up, and it just felt right to keep it. I can't explain it, but that's how it's felt since then. My friend isn't quite there yet, but she's happy to go with my 'recommendation' for now. If the flat or the tenants gives us lots of work, we might revisit this decision, but for now, we're hanging on to it. Now, that might not be the right decision for you (although I would keep yours based on what you descibe here), but you might have to wait for the 'gut feeling' to get rid of the insecurity, is all I'm saying...
Good luck with it all!

matthewse

Old_No.7 wrote: »

Hi there, I've just been through the same thought process as you: I own a flat with a friend, we let it out without too much hassle, and we have some money left most months (about £300pm, but for now we save this for future repairs/improvements). My friend wanted to sell as the price had shot up, but I have decided it's better to keep it for now. Neither of us need the money of the sale, but we will both need money in the future (not much in terms of pension saved up so far). You only pay tax when you sell, and even then it's not that bad (I know some people will kill me for this, but I really believe the CGT is v. reasonable here, plus you pay tax, or worse, the banks, for most other investments too)
But what I noticed when we were going through it, and it took us MONTHS to get there, is that it's not a straightforward decision: I wrote down all the pros and cons, but there are so many unknown factors, it's impossible to know for sure what the best thing is to do. Very similar feeling to what you're having: you almost want someone to make the decision for you, to stop the agonising! But then one day I woke up, and it just felt right to keep it. I can't explain it, but that's how it's felt since then. My friend isn't quite there yet, but she's happy to go with my 'recommendation' for now. If the flat or the tenants gives us lots of work, we might revisit this decision, but for now, we're hanging on to it. Now, that might not be the right decision for you (although I would keep yours based on what you descibe here), but you might have to wait for the 'gut feeling' to get rid of the insecurity, is all I'm saying...
Good luck with it all!

Thanks for your words. It has made me feel calmer as I know other people have been through this dilemma. I think your right it is to do with the 'gut feeling' and I my head says keep it and my cautious side is saying sell!!! I have decided to speak to an accountant to sort out all the tax implications. I have also worked out that I would be able to pay off my mortgage in approx 10 years (5 years if I put my own savings into it!!!) so my gut instinct says keep it and see the return in 10 years. Even if I sell it in 15 years I will still have made a packet on it and I think I won't be too dismayed about giving some to the tax/wo/man!!!

IanJohnston

Hi,

Digging up this old thread.......how did you get on, what did you do in the end?

I'm such a very similar situation right now. Have got 100k equity in the flat we rent out, no mortgage on it and the CGT will be zero. However, it's only a 1 bed flat so the profit per month after fees/tax is only about £250.

However, am getting swayed with selling up and using 70k to pay off the mortgage on our own home, and the remaining 30k either into savings or to fund the extension on our home.

I'm a contractor, so being mortgage free would be a big relief/weight off my mind.

Do we really want to wait 10-15 years to get the benifit of such an investment?

Decisions!

Ian.

hethmar

And of course, 40% CGT is looming Why would yours be zilcho?

new_home_owner_3

hethmar wrote: »

And of course, 40% CGT is looming Why would yours be zilcho?

because it was probably there main home, im in a similar situation but i have no intention to sell at least in the near future.

Theres going to be exceptions with 40 percent capital gains and they have already hinted long term investors who have bought houses has pensions should not have pay the full 40 percent.

I dont think anyone can make this decision until the budget on the 22nd, but if your like me and you have only been renting your house out for 6 months, they will still have 2 and half years before getting any capital gains and if you have previously lived in the house for over 10 years it will be some time before you have to pay any capital gains.

IanJohnston

hethmar wrote: »

Why would yours be zilcho?

36 month rule and the lettings exemption apply in our case (wife owned and lived in the flat for years before she moved in with me and we rented it out).
I did the calcs and it appeared we would be exempt, so checked with my accountant and he confirmed.

......But yeah, this emergency budget could turn it all sour....:mad:

Ian.