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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To be considering this

48 replies

toffeeapplejam · 03/05/2015 08:09

Here is my complicated situation - I own a (small!) house outright and I part-own a one bedroom we flat with my brother. I am living in the latter at present.

WIBU to, when I have a family, rent somewhere rather than buy a house with a mortgage?

I am thinking that since we have the security of a house that renting might allow us the flexibility of renting somewhere we might not be able to afford. Also, it might be easier to adjust our living arrangements as needed.

The main thing(s) I worry about are being moved around a lot, not being able to decorate and have pets and feel it's 'ours.' What do you think? :)

OP posts:

paxtecum · 03/05/2015 09:47

Renting is a pain.
No pictures on the walls - unless I want to redecorate when I move.
The bathroom has a ridiculous lay out and no shower.
The LL does the garden in a manner of speaking. The lawn hasn't been cut yet this year so looks like a field.
He is obsessed with weed killers.
The house needs decorating. I'm not physically able to do it. The LL standard of painting is very low and if I pay someone to do it, I may get two months notice to quit the week after.

shewept · 03/05/2015 09:49

Well if your income isn't enough to get a mortgage, and you are going it alone. How are you going to be able to afford a monthly rental payment, childcare (assuming you will be still working) and living expenses?

Have you sat and worked all this out?

It sounds like you would be better off living in the house you own.

Original poster

toffeeapplejam · 03/05/2015 09:56

I suppose like a lot of people - I could afford to pay rent because that's pretty much the same as the rent I get from the property I own! So the property I rent generates £500 pm and I'd pay rent of £500 a month - if you see what I mean - so I wouldn't be making a profit but wouldn't be losing much.

I can live in my flat for now while child is small enough for childcare. That's not an issue. It's more long term.

OP posts:

ragged · 03/05/2015 10:04

I don't think it's a crazy plan, OP, but work thru your options and the costs over 5 or 10yrs. Stretching yourself to buy in an area you like is an excellent idea IF you can commit to living there for at least 3 yrs. Being pinned down where to live as a home-owner sucks, though.

Original poster

toffeeapplejam · 03/05/2015 10:10

It would be lovely if, in the future, I could scrape together enough for a deposit and have a stable job that would allow me to pay a mortgage in the area I want to live but realistically it will be tricky and possibly won't happen: as such I suppose I'm thinking of various probable situations.

OP posts:

Oliversmumsarmy · 03/05/2015 10:53

BTL mortgages are primarily based on what income the house brings in. Not what you earn. You could have a regular job paying £40k per year yet have BTL mortgages totalling £10million. Might I suggest you go along to one of the free seminars done by the guy from homes under the hammer, others are available. Don't what ever you do sign up for anything, but use it is a way of understanding how things work in property. I think you are in an excellent position already owning outright 1 property and a 50% share in another.

Original poster

toffeeapplejam · 03/05/2015 10:58

Thanks Olivers :) that is very interesting indeed ... I did not know that.

OP posts:

Trills · 03/05/2015 11:08

If the house you own is worth £100k, and the house you want to live in is worth £200k, the rent you get from the house you own won't pay all your rent on the house you live in. You'll have to pay extra rent to top it up.

Money-wise you might be better off (or the same off but have more control and freedom) if you sell the cheaper house and use it as a (high percentage) deposit on the big house.

Onbiously if your income is very insecure that might not be a helpful suggestion, sorry.

I rented 4 different houses in 5 years due to landlords deciding to sell up. I don't recommend it. Moving is expensive - you pay fees, have overlap time, have to get a van, and there are always "a few bits" that you need to buy even if you already had a "whole house" of furniture.

Original poster

toffeeapplejam · 03/05/2015 11:38

Unfortunately my income is ad hoc and haphazard. It isn't low, particularly, but nor is it regular.

OP posts:

TheAuthoress · 03/05/2015 11:56

We live in our first bought house, before that we rented. All together I've lived in about 10 rentals. Some have been great, with good landlords who allowed us to do things and trusted our judgement, and some have been grim. Thankfully we've never had a leave a rental because of the landlord selling or whatever but it was always a constant thought in the back of my mind.

So I think it would depend on the rental (sorry, doesn't help much!) - you could rent a house and see if it works out, if that's really what you would prefer, and it it goes well and you have a good landlord then great, but at least if it goes wrong you have the option of selling your house and trying to buy.

Buying became really important for us when we had kids as I wanted to have a permanent base for them and also if things where damaged or broken by them it was our own property. Plus being able to do things like paint their bedrooms, buy large garden items etc for them.

If you've currently got a decent income and small outgoings could you try to save and perhaps in the future have enough to combine with your house sale and buy a house in your desired area outright?

Original poster

toffeeapplejam · 03/05/2015 11:57

It's possible, yes, although I'd have to save a LOT :)

OP posts:

TheAuthoress · 03/05/2015 12:05

Have you got a timescale in mind for having a baby?

I think if it was me, I'd start saving now, just what you can, then say you have a baby in two years and keep saving, then stay in the flat until baby goes to school and keep saving, then rent in the area you want to live in to get baby into school and then see where you are with savings / how much your house is worth / how much a house in the desired area costs / how the rental is going?

So you could have 6 years worth of saving plus your house sale funds. You could also in that it time maybe find a job that would make it easier to get a mortgage?

Momagain1 · 03/05/2015 12:09

You currently pay no rent, and have rental income and no family to care for. You are in a position to save your way into better housing choices in future than either if those you list. Unless you are wasting this opportunity by living on the rental income.

If your goal is to be a single parent in a certain sort of neighborhood, and you are already set up with low expenses and non-wage income, you are in a pretty unique position to control the long term situation. Especially if your future family plans are not dependent on a finding a partner, much less the need to accomodate their preferences.

Original poster

toffeeapplejam · 03/05/2015 12:33

Oh, definitely trying to save, but low expenses doesn't amount to no expenses.

I'm not entirely sure what 'wasting this opportunity' means.

OP posts:

newdawning · 03/05/2015 12:52

We have being doing exactly this since 2008 wanted to move but the market crashed around us. We have a small house with a small mortgage and another house with no mortgage. We rent a much bigger/nicer house than either of them and the rental from both more than covers our rent plus all the other expenses. Since 2008 we have moved once through choice and live in a fab location with a nice LL we have a cat and a dog and have decorated to some extent the house was beautifully done when we moved in and neutral. I hate the inspections but I don't hate that when my window broke or the boiler broke someone else paid and organised it to be fixed. I hate the idea that that the LL could decide to sell up any day but I feel that is the only Con. We have been very lucky in that we live in an area with few private LL so we have never (touch wood) had a vacant house for long.

Original poster

toffeeapplejam · 03/05/2015 17:14

Thanks, that's really interesting.

I always thought renting would be really expensive but it's not actually that bad.

OP posts:

IFinishedTheBiscuits · 03/05/2015 18:04

We have a mortgage on a house and let it out to rent somewhere bigger/nearer to the city. My comments:
If your income from rent is £500 and your own rent would be £500 have you factored in income tax? Letting/renting yourself is very tax-inefficient.
I disagree that mortgages are usually less than rent, particularly in bigger houses. Our last house, cost £865/month to rent, but would have cost around £1200/month to buy, even after 20% deposit.

IFinishedTheBiscuits · 03/05/2015 18:26

Actually OP, if the house you let out and house you would rent yourself are similar rents, assume there's not THAT much difference in value? Although know it doesn't always work that way.
But could you sell your house, get your brother to buy you out of 50% share of flat (he could get BTL mortgage and rent it out) and buy in area you want to?
Just thinking you'd have more security not being at the mercy of a landlord yourself, you wouldn't have additional risk of void periods, broken boilers or tenants not paying rent.

Original poster

toffeeapplejam · 03/05/2015 18:28

I know but DBro is unlikely to agree to that unfortunately - he has bad credit and wouldn't et a mortgage :)

OP posts:

AuntieDee · 03/05/2015 18:44

I have done this - I have a 2 bed that I rent out in an area I would want to retire. I live in a 4 bed farmhouse with stables and land. I can afford the rent and would have been able to afford the mortgage but would never be able to save a big enough deposit :(

IFinishedTheBiscuits · 03/05/2015 18:45

Ok... thinking hat on. Will he want you out of the flat long-term anyway? So he can get an income / invest equity elsewhere?

The only reason I'm hesitant about using rent to pay rent is because it's risky. I've been in that position and been terrified that tenants won't pay or will leave. And the January tax bills were always a struggle too.

Think you're lucky to have lots of options though and good to think ahead.

Original poster

toffeeapplejam · 03/05/2015 19:44

Thanks :)

I do work as well and would work with a DC. It's just my income is variable and I doubt a mortgage company would touch me!

OP posts:

IFinishedTheBiscuits · 03/05/2015 19:57

Mortgage company should include the rent from your house as a regular income as long as you don't have a mortgage on it. And assume you can include 50% rent from flat you'll be moving out of too.

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