Considering to let, advice sought please

0writer

Afternoon,

The sale of our flat has just fallen through and we are considering our options. We are able to let it out for a 6 month period, have a potential tenant waiting and it would cover the costs as well as leave £200 extra per month.

We have a property to move to which is rent free for the period.

Simply to help ease our current financial situation, would it be beneficial for us to let it or are we opening ourselves up to further risk?

Thanks in advance.

m1ntie

Your property will almost certainly be worth significantly less in 6 months time and less still in 12 or 18 months time.


Are you already in negative equity? If you really need to sell reduce your asking price substantially and sell now.

clutton_2

how do you know your potential tenant is going to be a good one ? have you credit checked them and referenced them ?

inmypocketnottheirs

clutton wrote: »

how do you know your potential tenant is going to be a good one ? have you credit checked them and referenced them ?

Very good question. I use https://www.letsure.co.uk. Not the only service available, but has been good for me for ten years or so.

0writer

Thanks for the responses so far. We are about 50k away from being in negative equity so I don't really want to take the stance that the whole market is going to crash and that I should run away with my tail between my legs in the next two weeks.

My question simply relates to the next 6 to 12 months. After that we would consider going to market again depending on the situation.

We would let through an agent (not privately) and would let them handle everything.

clutton_2

using an agent is very sensible

you say ""it would cover the costs as well as leave £200 extra per month." - what costs have you taken into account ?

0writer

The costs I've assumed is the monthly mortgage payment on the property as well as the monthly service charge/ground rent.

It does not include utilities such as water and electric.

Obviously on top of the above I'm aware that we are responsible for any repairs, a risk that is there and noted.

Doozergirl

I really can't see the point in letting it in the short term if you're only going to go through exactly the same process of trying to sell it again? If you don't want it anymore, then sell it. You're taking a risk for no gain.

You'd get about £250 a month in interest with £50,000 sat in the bank. And your money won't trash your bank account and leave you with a massive repair bill.

boinging_2

0writer wrote: »

£200 extra per month.

Is this after tax?

I'd agree with posts above selling now would seem a better option.

0writer

The reason I have asked about renting is because our flat simply is not going to sell in the current market conditions. We are not "overpriced" or "expecting too much". We have experienced a sale fall through with a FTB and the people likely to buy are FTB's.
In order to sell we would have to take a substantial loss. This is not in a market where people are not buying because prices are too expensive and they want to wait and see, it is because it is getting close to impossible for FTB's to buy.

If we rent it out, it gives us time to wait for 6 months and then re-asses things. It may get worse or it could flatten out, nobody knows.

It makes absolutly no sense at all to under sell a property when nobody knows how much prices will drop. It's a risk not selling but it is also a risk to under-sell.

I find it hard to understand the logic of the poeple making comments like "sell now otherwise you're in trouble" while others are telling people "don't buy now, you'd be stupid".

It is this mix of lack of intelligence but open my mouth and give people my pointless opinion that is causing a problem and it is this approach that the media is taking.

I'm interested to hear from anyone with experience please (not feelings).

Doozergirl

0writer wrote: »

The reason I have asked about renting is because our flat simply is not going to sell in the current market conditions. We are not "overpriced" or "expecting too much". We have experienced a sale fall through with a FTB and the people likely to buy are FTB's.
In order to sell we would have to take a substantial loss. This is not in a market where people are not buying because prices are too expensive and they want to wait and see, it is because it is getting close to impossible for FTB's to buy.

If we rent it out, it gives us time to wait for 6 months and then re-asses things. It may get worse or it could flatten out, nobody knows.

It makes absolutly no sense at all to under sell a property when nobody knows how much prices will drop. It's a risk not selling but it is also a risk to under-sell.

I find it hard to understand the logic of the poeple making comments like "sell now otherwise you're in trouble" while others are telling people "don't buy now, you'd be stupid".

It is this mix of lack of intelligence but open my mouth and give people my pointless opinion that is causing a problem and it is this approach that the media is taking.

I'm interested to hear from anyone with experience please (not feelings).

The lack of intelligence you describe is actually a tailoring of advice to the person asking it. The people here can't influence the property market as a whole so we can advise buyers and sellers to suit their circumstances... Otherwise we wouldn't be MoneySavers, we'd be acting according to our vested interests.

I will, and always have advised buyers to get the best price and will help them do that. I will also advise vendors on exactly the same situation as to how to get the best price for them. In any market.

The exact point is that we nor you 'don't know what will happen'; but there will certainly be no capital gains for you any time soon. It would be better to sell your property in the good condition it is in now for the best price you can achieve and be sure of your equity accruing interest.

You are not selling undervalue if something is the best price you can get. Just because it was worth one price in a different marketplace (or not as your collapsed sale may suggest) does not mean it will be worth the same price again at any point in time.

Sometimes it's not worth asking advice if you don't want to hear the answer. I know there are some extreme posters on this board, but the fact that my comments are lumped in with them (I genuinely try to give advice to a person, not rant at them - perhaps my comment was harsh but it's only because I actually felt quite stringly in your case) might suggest that you got a different answer to the one you were expecting.

it's disheartening to offer advice and then see yourself slated because the person asking for 'advice' didn't like the 'advice' they were given. Your answer was unanimous, reagrdless of the way it might have been put. That doesn't often happen on this board - when it does - I'd take the advice given.

You are waiting for a recovery or an increase in prices that will not occur in the timescales you are giving us - 6 or 12 months. I appreciate you have no rent to pay in that time, but I cannot see the point in waiting when you will do just as well from your money in the bank.