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Renting flat to buy house?
confused31_2
Posts: 1,272 Forumite
A friend of mine and his wife have had their flat for sale for over 12 months, its a 1 bed room flat, he has reduced the price but still no luck, he his now desperate to get out as he has a son whos over 2 and they need the space.
He has found a house which they like which is 163000 pounds and he can get a mortgage for that, but his estate agent has told him to rent the flat out.
He owes about 45000 on the flat and it is for sale at the moment at 85000.
Ive told him to be careful as he could end up paying both if he doesnt get a tennant in as soon as he moves, ive never rented or leased anything so i dont have a clue, but do you think he his doing the right thing?
What i said for him to do was rent the flat out and then rent a house short term and sit it out, but he doesnt seem interested.
any advice ?
confused
He has found a house which they like which is 163000 pounds and he can get a mortgage for that, but his estate agent has told him to rent the flat out.
He owes about 45000 on the flat and it is for sale at the moment at 85000.
Ive told him to be careful as he could end up paying both if he doesnt get a tennant in as soon as he moves, ive never rented or leased anything so i dont have a clue, but do you think he his doing the right thing?
What i said for him to do was rent the flat out and then rent a house short term and sit it out, but he doesnt seem interested.
any advice ?
confused
I am not a Mortgage Adviser
You should note that this site doesn't check my status as not being a Mortgage Adviser, so you need to take my word for it. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
0
Comments
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Unless he'd get a really good amount in rent, it doesn't stack up.
If he manages to sell the flat for 75k, he ends up with a mortgage for 133k on the house - about £650 a month interest.
If he keeps the flat, he ends up with a mortgage for 208k altogether - about £1050 a month interest.
Do similar flats in the area rent out for £400 a month net - allowing for voids and agents' fees? If not, it's only worth it if the price goes up and he can sell it later. At the moment, that doesn't seem likely.Hurrah, now I have more thankings than postings, cheers everyone!0
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