Should I change one rental into two?Make Text Bigger
I currently have this situation:
Two properties, both on homeowner mortgages
Property A :
Purchased Dec 2010
Was my sole residence until DEC 2012 when I let it out
Purchased for £90k
Now worth £135k
My current residence
Purchased April 2014
Purchased for £142K
Now in around 6 months time, Id like to get Property C, most likely a student letting property, cost circa £70k. I had planned on releasing equity from property A for the deposit and to do some remedial work (basics, no more than 5k worth). This additional borrowing would obviosly be at around 4% intrest.
Now someone mentioned to me that I MAY be better off selling property A, making around £40k profit as this would not yet be liable for CGT (having lived there within the last 3 years) and then buying two cheaper 70k student properties, thus avoiding the 4% for borrowing the additional etc?
Or do I have it all wrong and I’m better sticking to my original plan?! Minefield!
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