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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To rent my house out and rent a more expensive bigger one for me?

38 replies

TheSunnySide · 06/12/2016 13:52

I have a small 2 bed house with a smallish mortgage in an area I don't like with no garden. I could quite easily rent it out for more than my mortgage (Slightly more) payments.

I have seen a bigger 3 bed house with a garden nearer to my child's school - the rent is twice the amount I pay in Mortgage but we could manage it easily.

I can't get anyone to lend me the money to get a mortgage for a bigger house, even if I sell the one I own.

Has anyone done this and how did it work out?

OP posts:
gleam · 06/12/2016 14:01

Hmm, how about putting the amount that you'd pay on a bigger mortgage aside for a year, and then ask again.
At least you'd be able to prove you could afford it - even through months with Christmas and holidays.

Otherwise, you could look elsewhere for a mortgage. My dh is a contractor and we got our mortgage through a broker who specialised in the field. There may be something similar for whatever's stopping you getting a mortgage?

UterusUterusGhali · 06/12/2016 14:10

I'm sure I saw an article in the Gaurdian about this some time ago. Seems it's not uncommon.

I'd at least look into it; fees and insurance etc.

Original poster
TheSunnySide · 06/12/2016 14:12

We can afford a higher rent no problem. Currently we only pay £450 mortgage and could easily double it. We just can't get a mortgage on our salary to cover the huge price rise in houses in the area we would like to be in. Also i am not prepared to borrow several times our wage as I am in my late 40s and don't have loads of time to repay it.

OP posts:
Original poster
TheSunnySide · 06/12/2016 14:13

I am being made redundant so will have a pay-out to pay for fees, not renting our house straight away etc. Seems like a good opportunity to move so long as I do find another job pronto.

OP posts:
Original poster
TheSunnySide · 06/12/2016 14:16

Sorry - drip feeding.

The reason to move would be more space, a garden etc and to be closer to school and school friends. Not to get into a different catchment area. Son is 5, in a school slightly out of catchment already so we want to move there but it won't effect his high school catchment at all - we would never afford to rent in that catchment.

OP posts:
user1477282676 · 06/12/2016 14:16

My friends did this. They hate their own house and it was miles from school...so they rented it out and rented another for themselves. They did it for years until a windfall meant they could sell their own home and buy a house in the area they liked.

Rentals can be a pain in the arse though OP...landlords suddenly selling meaning you need to move out fast.

Randytortoise · 06/12/2016 14:18

I think it's a good idea. You are still on the property ladder and will have a bigger house with the security of owning one if it all goes wrong.
I think the only problem would be if the people who rent your house damage something or doesn't look after it to your standards. Would you be upset having to completely redecorate or repair damage if the worst happened ? This happened to friends of ours, they rented out their house (after completely renovating it) while they went travelling. While they were away the tenants redecorated (without permission ) flooded bathrooms and broke holes in the plaster. They were heartbroken and out of pocket when they returned.

user1480946351 · 06/12/2016 14:21

It can be a good idea....but you have to be ready for being a landlord, and all that entails. Most people aren't.

Maxwellthecat · 06/12/2016 14:21

Why don't you overpay on your mortage if you can double it?

Badbadtromance · 06/12/2016 14:23

Thinking of doing similar as in almost same position

NotDavidTennant · 06/12/2016 14:23

The worse case scenario here is that you end up with a bad tenant who doesn't pay rent for a number of months and trashes the house. Unless you could afford to pay the mortgage and the rent on the bigger house for a sustained period even with no rental income coming in, and still have a contingency fund to cover repairs, I would be wary.

Original poster
TheSunnySide · 06/12/2016 14:29

"Why don't you overpay on your mortgage if you can double it?"

We probably should have been doing this but it doesn't really help out with our current plan, We would still have to live there.

OP posts:
Maxwellthecat · 06/12/2016 14:31

No but I think it's a big big risk to rent out a house with a contract when you don't have a steady job and can't guarantee that you would get reliable tenants. If you overpay on your mortage for two years then you'd have a bigger pot to look for buying or you could reduce your mortage in the future sonyoud have more money for renting out.

Maxwellthecat · 06/12/2016 14:32

*reduce your monthly mortage payments

wellcoveredsparerib · 06/12/2016 14:34

Wouldn't you have to pay tax on the rental income? That could ale your plan less affordable

Original poster
TheSunnySide · 06/12/2016 14:36

The tax thing is something I haven't considered so I will look into that.

When I have asked this question of others they have asked why I don't just buy another house but that's really difficult for me to do.

This rental plan would only go ahead if I have another job.

OP posts:
Helsinkimorning · 06/12/2016 14:38

We own a house in a good catchment area. We do long term lets. The last two families who have lived there rented out their own homes in other areas and moved into this house for five/six years until their children had finished at the school. We've currently got another family in there who are two years into their let for the same reason. They plan to move back to their own homes as soon as the child goes to university.

Bragadocia · 06/12/2016 14:42

I think it's a good idea, but it might be less affordable after HMRC have phased in the tax changes to landlords, so that one can't claim mortgage expenses as a tax deduction any longer (or something - not sure of the details).

krustykittens · 06/12/2016 14:45

A friend of mine rents out her two bedroom flat in Bath and then rents a three bedroom house with six acres in Devon. She loves it and it is the only way they could afford it. But she does have savings in case they have nightmare tenants who refuse to pay rent as eviction takes so long. This is no small concern, people can lose their houses in these circumstances. Luckily, this has never happened to her in 10+ years of being a landlord but she does rent through an agency, which comes with fees.

Baylisiana · 06/12/2016 14:51

I think it could work well provided you allow in the budget for unexpected repairs and maintenance on the property you rent out, and for agent management if that is what you choose.

BoomBoomsCousin · 06/12/2016 14:58

As well as the tax issue, talk to your mortgage company. There may be expenses there.

In general I think it's a reasonable plan if it's affordable even if you don't always have a tenant. One way or another you could save up the extra money instead of improving your current lifestyle. But constantly putting the investment first can be very jam tomorrow. Just don't over stretch.

TheFlis12345 · 06/12/2016 15:05

I know a lot of people who do this in London, their first time homes aren't big enough now they have families but the jump to buy a bigger property is ridiculous so they rent out their flats and lease houses.

Christmasmice · 06/12/2016 15:14

You definitely have to consider what would happen if tenants left the house having damaged things or you had an unexpected bill, say because your boiler broke. You have to prioritise the upkeep of the house for the safety and well being of the tenants. If you can afford that then go for it.

Original poster
TheSunnySide · 06/12/2016 15:29

Plan is to get a new boiler and carpets fitted before we rent, take out insurance and put some money aside for repairs.

However the tax issue and other landlady stuff will need to be looked into. I would probably put it with an agent.

OP posts:
LoisWilkersonsLastNerve · 06/12/2016 15:32

You'd be a tenant and a landlord, both can be a nightmare so I wouldn't to be honest. I see your difficulty though. I don't like my house much but can't remortgage.

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