Trying to sell/rent/get away from my house!
Discussion
My g/f and I want to move in together near hers (in a different area to where I am), which suits me as I'm home based/remote. We'll rent somewhere together for a while and then look to buy as a couple in the future.
I've got a house though, I've had it for around 7 years and own 23% of it so far on a standard mortgage.
I've had the house on the market for around 6 months, couple of sniffs but the feeling I get is that the price is a bit high for what it is, and the market I'm aiming at is first time buyers. Other houses in the area are struggling to sell, even with price reductions so I don't think I'm massively out on my asking price. I'm around £5k more than the worst house in the local area, and £15k under the best house. All houses are sub £100k
I've thought about renting it out, but it looks like I'll lose money on it by around £100 per month once agency fees are added in against what I'd need to pay against the mortgage. The Building Society I'm with were fine with permission to let, but wanted to add 1% on to the plan I'm on, which is fixed til 2013. It'd cost me £2k to get out of that deal which was a 5 year fix. They wouldn't give interest only (I didn't particularly want that anyway) as they'd prefer I owe them less than 60% of the mortgage rather than the 77% I have left. I don't have the difference in cash as I've been out of work through redundancy for a few months, though I'm starting a new job next month.
I've also thought about getting in touch with one of those home buyer companies, thinking that if I break even on the outstanding amount on the mortgage, then thats a clean break and I'll come back to it again in the next few years.
Any advice on where to go next?
Assuming I can get tenants through an agent, would it be wise to take the hit on the income vs mortgage payments and just ride it out for a year or two then try to sell again? Or cut off noses, faces, feet and anything else and try dumping it for whats left on the mortgage and walk away?
I've got a house though, I've had it for around 7 years and own 23% of it so far on a standard mortgage.
I've had the house on the market for around 6 months, couple of sniffs but the feeling I get is that the price is a bit high for what it is, and the market I'm aiming at is first time buyers. Other houses in the area are struggling to sell, even with price reductions so I don't think I'm massively out on my asking price. I'm around £5k more than the worst house in the local area, and £15k under the best house. All houses are sub £100k
I've thought about renting it out, but it looks like I'll lose money on it by around £100 per month once agency fees are added in against what I'd need to pay against the mortgage. The Building Society I'm with were fine with permission to let, but wanted to add 1% on to the plan I'm on, which is fixed til 2013. It'd cost me £2k to get out of that deal which was a 5 year fix. They wouldn't give interest only (I didn't particularly want that anyway) as they'd prefer I owe them less than 60% of the mortgage rather than the 77% I have left. I don't have the difference in cash as I've been out of work through redundancy for a few months, though I'm starting a new job next month.
I've also thought about getting in touch with one of those home buyer companies, thinking that if I break even on the outstanding amount on the mortgage, then thats a clean break and I'll come back to it again in the next few years.
Any advice on where to go next?
Assuming I can get tenants through an agent, would it be wise to take the hit on the income vs mortgage payments and just ride it out for a year or two then try to sell again? Or cut off noses, faces, feet and anything else and try dumping it for whats left on the mortgage and walk away?
andy-xr said:
I've also thought about getting in touch with one of those home buyer companies, thinking that if I break even on the outstanding amount on the mortgage, then thats a clean break and I'll come back to it again in the next few years.
If you really want to sell it, then knock a bit of the price to be the cheapest, not 20-30% that a "parasite" would ask for IMHO.
If the difference between the mortgage and renting is only ~£100 - I’d be pretty tempted to let it and take the hit. See it as a bit of a savings plan for the future...
Try and narrow the gap between the rental amount and the mortgage and make a small loss on the property each year. Perhaps speak again to the mortgage company again to see if they would meet half way in terms of the percentage increase (they probably won't but it doesn't cost anything to ask….)
Even at -£100 per month, that is a loss of only £1200 per year which is almost certainly less than the cost of selling (estate agent and solicitors fees etc).
Making a small loss each year is still a reasonably good thing to do – as in someone else is paying the majority of your mortgage through the rent and you are leveraging the investment in terms of equity in the house.
You can then re-evaluate yearly. If the market conditions get better then sell, if they don’t then keep letting.
I would guess that in a few years, you might be quite glad that the house is still there and someone else is paying for it....
It is worth asking the webuyanyhouse style companies / auction, but I would guess that at the level you are talking about, there won’t be much (if anything) left after selling by either of those methods.
Bob
Try and narrow the gap between the rental amount and the mortgage and make a small loss on the property each year. Perhaps speak again to the mortgage company again to see if they would meet half way in terms of the percentage increase (they probably won't but it doesn't cost anything to ask….)
Even at -£100 per month, that is a loss of only £1200 per year which is almost certainly less than the cost of selling (estate agent and solicitors fees etc).
Making a small loss each year is still a reasonably good thing to do – as in someone else is paying the majority of your mortgage through the rent and you are leveraging the investment in terms of equity in the house.
You can then re-evaluate yearly. If the market conditions get better then sell, if they don’t then keep letting.
I would guess that in a few years, you might be quite glad that the house is still there and someone else is paying for it....
It is worth asking the webuyanyhouse style companies / auction, but I would guess that at the level you are talking about, there won’t be much (if anything) left after selling by either of those methods.
Bob
Mr Pointy said:
OP - you say you could end up £100/month out of pocket but have you factored in all the tax & allowance advantages? If you haven't these could reduce the deficient & as others have said £1200 a year is not too bad a 'loss' given that it's not the best time to be selling.
Or increase the gap.I would personally retain the property as you have built up a modest bit of equity and the person you are moving in with is a girlfriend and you may require your own home again at some point in the future.
Re-evaluate if/when you reach the point of buying with your GF, not while you are both renting and trying out life together.
You would feel a bit of a prat if in 18 months time you were no longer living with the GF and had dumped your own home at a huge discount.
your capital owing is reducing every month, and someone else is paying the majority of it. no brainer in my opinion, assuming you can take the hit on £100/month. Have you included everything e.g. council tax, insurance and all that nonsense?
Whats the plans for the future with the missus? Sell up and buy something between you?
Whats the plans for the future with the missus? Sell up and buy something between you?
Kudos said:
your capital owing is reducing every month, and someone else is paying the majority of it. no brainer in my opinion, assuming you can take the hit on £100/month. Have you included everything e.g. council tax, insurance and all that nonsense?
Yes, as much as I can based on what the costs have been so far. My only concern is regularity of payment, I could probably stand 3 months of non payment of rent from a tenant Kudos said:
Whats the plans for the future with the missus? Sell up and buy something between you?
Pretty much this, though renting for 12 months first. If it doesn't work out between us, or something happens such as kids etc I'd need to factor in that she might not be contributing, which I have done so far based on rents. I'm not a fan of the area I'm living in at the moment, I'm sure there's worse but I could always go it alone on either another rent or mortgage in the new area. There's 25 miles difference between where I am and where I want to be (which also works metaphorically as well as physically!)
If your current lender is prepared to give PTL, will they also allow you to switch to interest only, or perhaps lengthen the term of the mortgage to mitigate some or all of the monthly loss. Remember that you will pay more interest if you lengthen the term, or opt to go I/o, but it might be a short term solution.
Gassing Station | Finance | Top of Page | What's New | My Stuff