Sell or rent?

[Prizam]

Have been in my current house for about 5 years now. In the next 2 years I think we will want / need a bigger house.

In August my fixed term mortgage is up and i plan to pay off a large chunk of it. This will bring the mortgage down to between £500 - £600 a month. Depending on what rates i get.

Rental income will be around £1,500 a month.

I guess keeping the house as a rental will work out more expensive in the short term, but long term we will always have it if we need to sell. And always have an income from it.

So... do i sell the house and use the proceeds to reduce my new mortgage. Or do i rent the house out and use the monthly proceeds to help pay the new mortgage?

[Prizam]

Property valued at about 400k.

Will be about 125k remaining on mortgage.

Want to go for a 2nd property in the region of 800k

Mortgage repayments of £6-700 is capital and interest, I do want to pay the thing off completely.

£1,500 a month rental is realistic



An aditional 3% stamp is just nuts. What a fecking piss take. Thats £54,000 in stamp alone.

[Prizam]

A lot of maths is required here.

At 1,500 a month. Minus TAX and mortgage leaves me with £400 - £500 a month depending on how tax efficient I can be.

Thats going to take a long time to make up the extra £20k SDT will cost. And by selling, i will have almost half the mortgage. Humm...

[Prizam]

BL Fanboy said:

Stuff

Its not for business reasons, or greed. Its so I will have a pension. I don't hold out much hope for current pension schemes to ever really pay out properly.

Then again, I have been brought up to provide for my self, I could sell everything and get some nice cars then expect the "System" to fully support me in my old age.

The next thing, once I have scrimped and saved through my life to buy two property's that are too look after me in my old age. Is that I will be expected to sell them to pay for my own care once i can no longer look after my self. Whilst others get it given to them.


TAX, life and death is simply not fair. EVERYONE should pay the same flat rate tax. No matter how rich or poor. THAT is a levil playing field!

[Prizam]

oldnbold said:

I have a few BTL's and realise why the changes have been made, but if it is to deter "business" from competing with Joe Public why do holdings of more than 15 properties get exemption? These really are the people operating as a business, rather than people like myself who are supplimenting income/pension.

This is what I meant by running it as a "business".

I understand why TAX has changed on BTL, just don't think it is fair. What other investments are there that will give me a reasonable return and be "safe as houses".

[Prizam]

So i guess then, the best option is for me to move from one house to another. Prehaps liberating some cash from my first property and then once the dust has settled. Buy another smaller property that wont hurt so much on the stamp duty?

Or will i also get fked over with capital gains if i take any money out of the old house?