Rent Out v Sell

Melissa177

Hi,

I haven't posted on here for a while (hello to the regulars!) as work has consumed more and more of my time, but I have a property dilemma that I would appreciate some input on.

I bought a flat in Battersea in Feb 2007. It has somewhere between 50-60K of equity in it (15K initial deposit approx). I say this because the identical flat next door has just sold at a price which is 60K more than my mortgage. It has a slightly nicer bathroom - but this is cosmetic only.

My company, meanwhile, is moving to Geneva. After much agonising, I've decided to jump ship. Here is the deal on my property.

Option 1:

Big Company sends a surveyor around to my property to value it. I appoint one too (all expenses paid by company). If the surveyors come up with prices for the property that is within 5% of each other, I am offered the median on my flat, in cash. If not, they get a third surveyor around, and take an average of the three valuations to find my cash price.

They give me the cash, take control of the property (not sure how the legal bits work to be honest), and sell it on my behalf. If the property later realises a value which is higher than I was given, I get the increase. If it does not, Big Company shoulders the difference. All EA fees, legal fees etc are paid by Big Company.

Option 2:

I find a tennant for my property.

On my research, I make a conservative estimate that I would get 900/month for my flat. My IO mortgage is 700/month (fixed for four more years). I estimate 900 because other flats which are similar are advertised at 1000/month.

I keep the property, appoint an agent in the UK. Big Company pays for the letting fees, the agent, management fees. I shoulder the issues with the property (ie, washer breaking down; boiler blowing up etc), and of course, the tennants.

I retain the right to sell my property, as per the process in Option 1, for three years, as long as I remain in Geneva.




At first, I was very much into Option 2, but my issues are:
- I've never been a LL, and I would be out of the country. I'm not sure I'd be satisfied with an agent managing day-to-day issues, as I've been a tennant before and think most LAs are crap. I take my responsibilities as an LL seriously
- Money would be quite tight - I would need to ensure i had the rent coming in each month to pay the bills, unless I transfer money over from Switzerland (expensive at the moment, given the weak pound).
- It would be another thing to worry about, and a distraction from my career.


Option 1 worries me, because if I return to London, and the property market has rocketted again, how will I get back on? The area I live in is quite up and coming - lots of new shops, restaurants, bars opening, the tube is soon to connect to Clapham Junction etc. It could be a good long term investment.


Any thoughts?

Sorry for the length of this post!

Melissa

PS. Generali - yes, I decided to go to Geneva in the end! Made me an offer I couldn't refuse