Sell flat and house to buy one bigger house?
Discussion
We live in a house worth, conservatively, £350,000 and have £250,000 equity in it. We also own a flat that we rent out, worth £220,000 with £70,000 equity in it. The flat rents for £900pcm.
I am wondering if we sell both, buy one higher value house and make more money as the property prices rise this way than by keeping two properties.
We have grown up kids, but both became self employed in the last year or two and whilst we're doing well I am not sure that we could get a mortgage? Also, I'll have about £50,000 coming to me in 3 years from another property investment.
So, do we:
1. Sell both?
2. Keep both?
3. Wait for 3 years and do 1.
4. Do 3. and miss 3 years of greater property price increases?
Thoughts?
I am wondering if we sell both, buy one higher value house and make more money as the property prices rise this way than by keeping two properties.
We have grown up kids, but both became self employed in the last year or two and whilst we're doing well I am not sure that we could get a mortgage? Also, I'll have about £50,000 coming to me in 3 years from another property investment.
So, do we:
1. Sell both?
2. Keep both?
3. Wait for 3 years and do 1.
4. Do 3. and miss 3 years of greater property price increases?
Thoughts?
Centurion07 said:
£900PCM from a flat worth £220K? Ouch.
If it were me, I'd be looking to sell that one and buy 3 or 4 cheap ones around the £50K to £60K mark that would rent at anywhere from £300 to £400PCM.
Does it matter what its worth now? Surely the return only matters based on what you bought it for? What if it was purchased for £50k? He could possibly make his money work better elsewhere but rents havent increased in line with buying prices.If it were me, I'd be looking to sell that one and buy 3 or 4 cheap ones around the £50K to £60K mark that would rent at anywhere from £300 to £400PCM.
Centurion07 said:
£900PCM from a flat worth £220K? Ouch.
If it were me, I'd be looking to sell that one and buy 3 or 4 cheap ones around the £50K to £60K mark that would rent at anywhere from £300 to £400PCM.
Not worth three times the agro, hassle, voids, broken washing machines, leaky pipes, non paying tenents etc.If it were me, I'd be looking to sell that one and buy 3 or 4 cheap ones around the £50K to £60K mark that would rent at anywhere from £300 to £400PCM.
I'm often amazed at people who would prefer to have their million quid sat in 10 properties with 10 sets of tenents to worry about, instead of 3 or 4 at the same value.
Maybe the figures stack up a little better, but over a 25 year period I'm certain most people would wish they taken the easier option.
vescaegg said:
Does it matter what its worth now? Surely the return only matters based on what you bought it for? What if it was purchased for £50k? He could possibly make his money work better elsewhere but rents havent increased in line with buying prices.
The purchase price only matters when it sells and you realise the difference. 220k in BTL property should be returning more than 900pcm, whether that's split 4 ways or not. A house a few doors away from mine sold for £150k ish and is being let for £1k pcm, so however you want to do it, that £220k is going to waste in that current property.
I will concede however, that the more properties you let, the more headaches you will get. That said, that money would buy a decent flat in a lot of places that could make some serious money on short term corporate lets, it just depends how much work OP wants to do.
Mr Noble said:
Not worth three times the agro, hassle, voids, broken washing machines, leaky pipes, non paying tenents etc.
I'm often amazed at people who would prefer to have their million quid sat in 10 properties with 10 sets of tenents to worry about, instead of 3 or 4 at the same value.
Maybe the figures stack up a little better, but over a 25 year period I'm certain most people would wish they taken the easier option.
^^^^^Absolutely agree, I did the above 15 years ago, really stretched my finances to purchase a four 2 bed block of flats in posh/Clifton area of Bristol, cost then £170k, at that time I could have bought four rental properties for approximately the same value. Now I not only have to deal with a better class of tenants, i also have very few void periods of tenancy, and as the above poster indicated I have only ONE roof to repair, one garden and one property/location to maintain. I'm often amazed at people who would prefer to have their million quid sat in 10 properties with 10 sets of tenents to worry about, instead of 3 or 4 at the same value.
Maybe the figures stack up a little better, but over a 25 year period I'm certain most people would wish they taken the easier option.
Wings said:
Mr Noble said:
Not worth three times the agro, hassle, voids, broken washing machines, leaky pipes, non paying tenents etc.
I'm often amazed at people who would prefer to have their million quid sat in 10 properties with 10 sets of tenents to worry about, instead of 3 or 4 at the same value.
Maybe the figures stack up a little better, but over a 25 year period I'm certain most people would wish they taken the easier option.
^^^^^Absolutely agree, I did the above 15 years ago, really stretched my finances to purchase a four 2 bed block of flats in posh/Clifton area of Bristol, cost then £170k, at that time I could have bought four rental properties for approximately the same value. Now I not only have to deal with a better class of tenants, i also have very few void periods of tenancy, and as the above poster indicated I have only ONE roof to repair, one garden and one property/location to maintain. I'm often amazed at people who would prefer to have their million quid sat in 10 properties with 10 sets of tenents to worry about, instead of 3 or 4 at the same value.
Maybe the figures stack up a little better, but over a 25 year period I'm certain most people would wish they taken the easier option.
It's swings and roundabouts. You can either make a bit more in rental income by buying more, cheaper properties, but have the extra hassle that causes i.e. scummier tenants, x number of buildings etc to be maintained, or you can have the advantages of buying fewer, more expensive properties, but make less on the rent. All broadly speaking of course & will of course be affected by many factors such as location/type of properties etc.
Centurion07 said:
Eh? Unless I've read that wrong you still have 4 sets of tenants to collect rent from, along with 4 sets of fixtures and fittings etc that require looking after. The only advantage you have is, as you say, one roof/garden/building to look after.
It's swings and roundabouts. You can either make a bit more in rental income by buying more, cheaper properties, but have the extra hassle that causes i.e. scummier tenants, x number of buildings etc to be maintained, or you can have the advantages of buying fewer, more expensive properties, but make less on the rent. All broadly speaking of course & will of course be affected by many factors such as location/type of properties etc.
I bought in an area of Bristol where there will always be a high demand for renting, also one block of four flats in a single block, is a lot easier to manage and maintain, against having to drive to four properties in four different locations of Bristol. I know my gas engineer appreciates the same, especially when having to carry out the annual gas safety checks.It's swings and roundabouts. You can either make a bit more in rental income by buying more, cheaper properties, but have the extra hassle that causes i.e. scummier tenants, x number of buildings etc to be maintained, or you can have the advantages of buying fewer, more expensive properties, but make less on the rent. All broadly speaking of course & will of course be affected by many factors such as location/type of properties etc.
My one regret, and at the time my wife suggested this, that i did not buy similar properties in the same area, rather than buy £40k properties in poorer areas of Bristol, for the latter have proved much harder and more time consuming to manage.
Wings said:
I bought in an area of Bristol where there will always be a high demand for renting, also one block of four flats in a single block, is a lot easier to manage and maintain, against having to drive to four properties in four different locations of Bristol. I know my gas engineer appreciates the same, especially when having to carry out the annual gas safety checks.
My one regret, and at the time my wife suggested this, that i did not buy similar properties in the same area, rather than buy £40k properties in poorer areas of Bristol, for the latter have proved much harder and more time consuming to manage.
So you're dealing with both ends of the rental market then? Can you give any more specific details as to how the cheaper stuff is more hassle to rent out?My one regret, and at the time my wife suggested this, that i did not buy similar properties in the same area, rather than buy £40k properties in poorer areas of Bristol, for the latter have proved much harder and more time consuming to manage.
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