9:33 AM, 20th January 2021, About 9 months ago 34
Hi, Having been a landlord for nearly 30 years I have a dilemma in deciding my best exit plan. I have a portfolio of 10 properties (2 houses and 8 flats). They are all interest-only mortgages but on good terms. The portfolio is straightforward enough to run and I self-manage and work hard to have a good relationship with my tenants. So all is calm and working as it should.
However, at 54 years of age I need to start to plan my exit plan and how I will convert this portfolio of ten into a reduced amount of hopefully three mortgage-free units that will, in turn, provide an income for my retirement. I would ideally like to retire at 60. I currently work running my own modest facilities management business, so I am financially self-sufficient whilst I remain working. I have no formal pension, so the rentals need to provide an income on retirement.
Four of the flats in the portfolio, which are good renters and attract top rates are on low leases (45 years). The mortgage has only 7 years to run at which point I will need to pay them off or sell to a cash buyer (they will not be suitable for a new mortgage due to the low lease).
I have just struggled through a lease extension on one of them at a cost of £44k including costs. I now need to sell this flat to get the lease outlay back and then serve notice on the next flat in that block to extend the lease and so on until all four flats have been extended and sold. It’s a shame because they are good flats.
After the lease extension costs and mortgages are settled I won’t have more than about £15k left after each sale. The benefit of these flats has been their location and the high rents they attract in relation to their value.
So would the more savvy investors on here have any ideas forward?
1/I am wondering whether there are lenders who will refinance a whole portfolio at a sensible rate and what the hassle and cost of doing that might be?
2/To carry on with the current plan to sell property a year until I have enough funds to pay off the last 3 mortgages in my portfolio and keep those three properties as my retirement income.
These are strange times to make big decisions but decide on a plan I must.
Any suggestions gratefully received.
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