At the moment we live in a three-bedroom semi, in a town where property prices are very high and rising. This summer, we will be moving into accommodation supplied by an employer. If all goes well, we will be in their housing for the rest of our working lives -- perhaps another 15 years or so. Eventually we will want a house of our own to retire to, but we are not very attached to this one.
The obvious thing to do would be to keep this house and rent it out while we're not living here. That would cover our mortgage fairly comfortably. The thing is, though, that if you were actually to buy a house as an investment, you wouldn't pick this one. The third bedroom is tiny, the kitchen is small and there's a huge garden to keep up.
The amount outstanding on our mortgage probably represents about two-fifths of the current value of the house. If we sold the house we could maybe pay that off and buy a smaller two or three-bed house in a less nice area, without a mortgage. We'd get less rental income, but not that much less (the difference would probably be £2-300 a month), and none of it would be going to the building society.
Alternatively, if we were able to keep our existing mortgage or borrow a little more, we could perhaps buy a four-bed house that would rent for £3-400 more than our current house. Given low interest rates and mortgage interest tax relief, would that actually be a better option? Or maybe we should look into buying in a completely different town? I have no idea. I never expected or wanted to become a property investor, but don't want to risk not owning a house at all, in case we find ourselves up the creek at retirement.
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What should we with our house?
7 replies
Jellytussle · 26/01/2016 21:21
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