Sell it or rent it?

by Readers Question

9:10 AM, 6th January 2021
About 3 weeks ago

Sell it or rent it?

Make Text Bigger
Sell it or rent it?

I have a 1970s 3 bed terraced house on a very popular estate in South Tyneside. I own the house without a mortgage and it has been rented for 6 years to two sets of excellent tenants, absolutely trouble-free.

My tenants have just informed me that, after 5 years of happy renting, they are moving on. Bad timing for me under the Covid regulations!

The idea of renting the property out again fills me with dread – too many scary stories of non-payers that can’t be evicted.

I have been enjoying the extra income, but I do realise that I’ve been lucky to have good tenants. I am retired, in my early 70s, and common sense tells me it’s time to sell up and enjoy spending the proceeds.

I would appreciate any advice or suggestions.

Alan


Share this article

Twitter Facebook LinkedIn

Comments

Tony Hodge

9:32 AM, 6th January 2021
About 3 weeks ago

Sell it. Enjoy your cash windfall without the worry of letting the house.
Tony

April

9:40 AM, 6th January 2021
About 3 weeks ago

Hi Alan
I'm sure you'll get a lot of good advice and you'll be able to sift through and make the decision that's best for you. I don't know what the property you own is worth or how much net income you make from that property but I don't think you'll make anywhere near that amount of income from investing the net capital (after CGT) that you'd make if you sold this property. You could take on an agent to sift through the tenants at around 10% + VAT and pay for an insurance policy to cover rent not being paid. This might impact on you monthly income but it would give you peace of mind. However, if you're not worried about keeping the capital intact as an inheritance, and for what it's worth, I think I've already given my children their inheritance by looking after them and giving them the best education and start in life I could, you could take the value of the property and invest it at a low rate of interest but also take the equivalent of the net rental every month out of the account in which you hold the proceeds. So, if you make, say, £200k on selling the property and you make, say, £500pm you would have £500pm for 400 months i.e. 33+ years. And you'd have the flexibility to spend less in one month and more (a lot more if you had a big expenditure to cover) in another month. My advice, on balance, would be to sell.

Dylan Morris

9:40 AM, 6th January 2021
About 3 weeks ago

Reply to the comment left by Tony Hodge at 06/01/2021 - 09:32
I agree given the seemingly endless lockdown situation and strong property market for sellers (presumably in your area) now would be an excellent time to sell up.

JohnCaversham

10:09 AM, 6th January 2021
About 3 weeks ago

Hi, I have with good success let direct via the local borough council here in Reading under one of their rental-guarantee schemes. They pay just below market rates, tenants are fully vetted by them and I on normal AST's, so I get to make the final decision, and as the title suggests all rents are underwritten by them for the duration and RBC undertake to return the property in the same order at the end. If your council is switched on to both tenants and landlords needs then it would be worth approaching them to see if they operate such a scheme? A bit less rent, but less hassle than going through a letting agency with all the associated fee's and liabilities which become yours, and they have a waiting list so nil voids.... Just my 2 pennies worth..

DC

10:11 AM, 6th January 2021
About 3 weeks ago

As it's rumoured that in his March budget Rishi Sunak is going to align CGT with income tax rates and do away with the £12300 allowance it might be a good time to try and sell asap.

Judith Wordsworth

10:47 AM, 6th January 2021
About 3 weeks ago

Reply to the comment left by DC at 06/01/2021 - 10:11
If only have 1 rental property and not in the higher income bracket then CGT CHANGES TO BE lowering the CGT to 18% and good, but not doing away with the CGT allowance currently at £12,300.

Judith Wordsworth

10:55 AM, 6th January 2021
About 3 weeks ago

Reply to the comment left by JohnCaversham at 06/01/2021 - 10:09
Thankfully I've just sold my rental to the Council, who I had let it to on their PRS. Even though the Clouncil were supposed to inspect every 3 months and report back they didn't. The tenants ruined the kitchen units (ok second hand but solid German Oak); ruined the cast iron bath (damaged the enamel and did not say anything and the side of the bath just corroded; wanted new carpets as grubby (new when they took the tenancy on).
Previous flats had been let to Housing Assications on 3 year tenancies and were trashed, and 15 years ago cost me £15k to put right the damage and the mould (knocking back to the brick).
Never again

Beaver

10:57 AM, 6th January 2021
About 3 weeks ago

It's impossible to answer this question without knowing your circumstances; i.e. do you already have enough income? If it is a popular estate and you don't have a mortgage then it may be this is as good an investment as you can make with the money. And if you don't have tenants to evict at the moment I don't see what you are worried about. You might be better off with a good agent to run the appropriate checks and rent guarantee insurance.

Paul Shears

10:57 AM, 6th January 2021
About 3 weeks ago

Reply to the comment left by Judith Wordsworth at 06/01/2021 - 10:55
Can you let us know which council this was please?

Judith Wordsworth

11:04 AM, 6th January 2021
About 3 weeks ago

Work out what your rental return actually is AND what you'll need to do to the property to rent it out after the current tenants move out. Also take into account imminent legal requirements and the possibility of your local authority implementing a landlord licence.
I worked out that with 2 rental properties I actually have made no rental income to live on for 2 years as had to refurbish them both in 2018 for new tenants after serving s21 on one tenant and s8 on the other (she owed £4,800 in rent arrears, has paid back £3k and refused to let me know where she has moved to so still £1,800 short).
Hence my decision to start selling up.

1 2 3

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Landlords unable to respond to London council’s so called “consultation”

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More