Renting a house out

[Petrolsmasher]

So im in a dilemna atm and dont know what to do.

Basically ive dropped my property a lot and all interest ive had, all the feedback is its too small, and it is its a small house. Ive been told that the rental market is very strong in my estate and i cant see me getting a sale for anything near what i want for it.

So im tempting by renting it out as we have found a house we would love to buy.

My main issue is, how much of a nightmare is it? The company im dealing with charge 18% monthly charge and that includes rent paying if tenants wont pay, and legal costs to take them to court and so on.

The one thing that pees me off is the extra stamp duty i would have to pay for my next house if i rent it out (another 5 grand), would it even be worth my while?

Also do all buy to let mortgages charge a small monthly fee and a couple of grand up front is this normal? (It would be a 75% LTV)

[Petrolsmasher]

Little Lofty said:

It can be worthwhile, just check out your tax position, as you can no longer claim relief for the mortgage.

What do you mean? Im in the 20% tax bracket in my job.

[Petrolsmasher]

Gooose said:

Selling mine off, it’s a massive risk these days and if you work it out I think putting your money away for a while will get you some returns, maybe not as much if things go well with your rental but it could be a lot more if it goes tits up!

Just imaging a boiler failure, a leak and then non paying tenants who wreck your house. It’s very possible!

The package i was tempted on taking up with the estate agents covers non paying tenants and the legal costs to take them to court.

My plan was to do an interest only mortgage for the buy to let

[Petrolsmasher]

mike74 said:

Alternatively you could just stop being greedy and/or delusional and sell if for what it's worth?

Excuse me? My property is on for 10% less than the equivalent houses in my estate and in a better decorative state so stfu.

[Petrolsmasher]

superlightr said:

Petrolsmasher said:

mike74 said:

Alternatively you could just stop being greedy and/or delusional and sell if for what it's worth?

Excuse me? My property is on for 10% less than the equivalent houses in my estate and in a better decorative state so stfu.

its only "worth" what you can actually sell it for. You said it isnt selling. Thus its too expensive at present. Thats the hard fact.

Your house will sell - it will be worth between £100 and £1m I would guess?

You just set the amount you want to start at and keep reducing it until it does sell.

if it was priced at £100 it would sell within 1 hr. if it was at £1m it will never sell so somewhere in the middle of those figures it will sell. The stumbling block is what you "think" its worth now.

Edited by superlightr on Tuesday 2nd July 17:15

Its not been on the market that long but i found a house i love so desperate to get in a position where i can make an offer.

[Petrolsmasher]

Got an alternative idea, i could afford to buy the next house on my own.

My partner could afford to buy the house we live in now off me (its in my name).

Is there anyway we could do this, she rents it out, i buy the next one just in my name, we save on stamp duty etc etc? My main concern is ill have to leave my 25k deposit in the house that will be solely in her name, anyway i can protect that should the worst happen?

[Petrolsmasher]

can i just ask people, how come most rental mortgages are interest only?

surely you want to be paying off the mortgage with the rent otherwise long term you dont really gain much so your not really gaining any equity etc?

Also why is there no buy to let mortgages without fees, most of them have fees in the range of 1500-2000.

Edited by Petrolsmasher on Wednesday 3rd July 19:05