Really worried and looking to sell ASAP

by Readers Question

10:59 AM, 26th August 2016
About 3 years ago

Really worried and looking to sell ASAP

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Really worried and looking to sell ASAP

After reading all the doom and gloom on the new tax rules and now the underhand tactics regarding CGT, I’m pretty much done and looking to sell up. I’m really worried that I will go bankrupt and take my family with me. It just isn’t sustainable under these new rules.concerned

I have two properties both with long term tenants. I want to sell to an investor with the tenants in place and at market value. If I can’t I will be left with no option but to evict.

What are my options and is this even possible?

I’m not sitting on a pot of money and hardly make a profit on either. I can not buy my way out of a negative situation if offered below market value. One is on a repayment and the other interest only. Both properties were supposed to be for retirement as we don’t have pensions.

Help please

Matt



Comments

Paul Green

11:24 AM, 27th August 2016
About 3 years ago

Good call Matt, positive reavaluation, this is not advice just my opinion..,you have high rental yields, don't forget that and they will always grow above inflation, giving you an inflation protected retirement income...for later on in life. ..assert price inflation will always outstrip wage inflation, which means you and I will never be able to earn more in wages than the price increases in our property. House prices do fluctuate, just ride out the wave, anyhow your not in it for capital growth, think of that as a bonus, although that will happen between now and your retirement, that's inevitable. Your still young and have 28 years left before your state pension kicks in, if they don't move it to 70, which they will, so you'll need that rental income even more...If you switch your interest only mortgage to repayment, make sure you don't overstretch yourself, you mortgage payments could double, think about extending the term say back to 25 years to spread the cost, and lower the monthly repayments, you will pay more interest over the term but may also give youself some breathing space, or even extend the term on the interest only mortgage and set up a standing order to repay the capital, this should give you more flexibility if you struggle to pay both repayment mortgages, because you have two empty property's at once (void periods) and no rental income To cover the loans, believe me it does happen. If you do leave it on interest only you will have to be disciplined and make those regular monthly capital repayments. Don't get caught out with a short term on your interest only mortgage, always extend the term when product switching or remortgaging, you don't want the bank asking for their money in 12 years, and not having it , only to find out you are forced to sell to repay the bank. You don't pay any more interest per month whether the term is 10 years or 30 years and your incontrol of when you want to pay off the mortgage completely. I too would pay to get the LTV down,this will give you access to better mortgage interest rates, think of it as a savings account, it's still your 2k your just paying off your capital and no one else's, plus your receive rental income on the 2K at you high rental yield , which you would not achieve in a savings account. And yes repairs: we all have then out the blue, again your looking at the bigger picture towards the future, better to struggle now why your both able to work than be poor in retirement, when you might not be able to sell your labour and earn a wage. Look at this as protecting your investments and putting money into your retirement. Don't forget any maintenance is tax deductible..unearned income is priceless , and when those mortgages are paid you will have two unencumbered property's in your estate, and be able to pass on your wealth to you children via your will, and you should have no worries about inheritance tax either as you well under the current threshold by the sounds of it. Sounds to me your in a strong position, when you 80 and living off that rental income you can always have your property's fully managed to relive any stress of managing the property's too and sit back and rep the rewards your be glad you hung onto them, believe me. Good luck...

Bill Williams

11:31 AM, 27th August 2016
About 3 years ago

Some 18 months ago we were looking to buy an apartment in central Manchester for our own use. This took us several months as most were tenanted, and we were expected to take over the tenants with the property. This is still going on now and we have seen many tenanted properties change hands since we moved in. Indeed one particular purchaser is buying up everything around us as it comes on the market., presumably as the ROI around here is about 7.5%

Rob Crawford

13:57 PM, 28th August 2016
About 3 years ago

Firstly please recognise the efforts of Mark's Property 118 Action Group and also the "fight the tenant tax" campaign. There is a ground swell of opposition that is beginning to make some ground in opposing the government, recent tax policies against landlords may change. So don't sell yet! But don't just sit there and do nothing, join Mark's Action Group and contribute to the "fight the tenant tax", all is not in vein. With regard to your properties, you must look at BTL as a business, it must be profitable. If you are not making a profit you must ask yourself why this is. Are you letting to the most profitable sector for your area? Are you asking for sufficient rent at that markets value? Are you spending too much on refurbishments that are above the standard otherwise accepted in your market? Do you manage the property yourself or do you employ an agent who changes above average rates? Are you suffering from rent arrears Etc etc.. Identify the issue and make the changes.

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