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Rent or sell ?

(8 Posts)
Mosman Sat 20-Oct-12 13:34:38

Which would be most likely to happen at the moment do you think ?
My concern is that the rent won't cover the interest only mortgage never mind all the money we've sunk into the property so I am seriously considering cutting my losses.
We'd loose about £50,000 which if I subsidised the rent by £150 a month for 20 years would put us in the same position by which time you'd hope the market would have recovered wouldn't you ?
Am I missing something glaringly obvious ?

Mosman Sat 20-Oct-12 13:35:36

We'd loose £50k if we sold I think, all the money we've spent on decor, exceptions, renovations etc.

MrsjREwing Sat 20-Oct-12 13:42:28

Only working with GCSE ecinomics here. It seems to me we used to be in a five year boom, bust cycle with short recessions. Brown changed the cycle and changed how much debt people could take on, so massive recession, bordering in depression. If people know there is a depression on they wont spend and it will take longer to get out of. I think it will be 2020's before we are fully recovered personally as we have global and EU issues making the situation worse, alobg with the fact Brown sold most of our gold reserves cheaply.

Mosman Sat 20-Oct-12 14:03:09

So just the 8 years to go then lol
Bloody hell.

MrsjREwing Sat 20-Oct-12 14:12:53

There is always supply and demand in the area you live to take into account.

Mosman Sat 20-Oct-12 14:18:17

Yes, true

aufaniae Sat 20-Oct-12 14:22:24

What are you planning to do with the money? If you're going to use it to buy property in the same market, then yes, you are missing something glaringly obvious!

if you buy a new place then you aren't losing £50K, you're simply moving your investment. (You lose the money it'll cost you to move, no more, no less.)

If you buy a new place in a market which is performing better than the one you're in (e.g. if you moved into London from somewhere house prices are falling) then it would be a wise thing to do, money wise.

Alternatively, if you're moving your money into an investment of a different kind, then again you are simply moving the investment and it depends on what you plan to invest it in whether that's a good idea or not.

It's only if you actually plan to spend the money on something which isn't an investment that you can say you have lost £50K.

Mosman Sat 20-Oct-12 14:35:37

The market is similar but the exchange rate is I believe over heated (Australian dollar), so if we had the £100k from a sale sat in the bank waiting for the rate to change into our favour that might be a good thing if the market here drops a little more but the prices of houses here are so out of sync with the rentals it's not funny. $6,000 a month in mortgage v's $2400 in rent for the same property.
So I'm thinking if I put the difference into over paying the UK mortgage and clear that quicker then the rental income will be pure income and when the market finally recovers we can consider our options again.

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