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AIBU?

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Original poster

So confused re property urgent

70 replies

user1461609321 · 10/06/2021 07:29

Hi everyone

I can't sleep due to having to urgently make a decision re whether to accept an offer for my flat that has just been made

It's a 2 bed top floor maisonette, I have 2 kids. Flat is on lovely road, nice neighbours (except the one that lives downstairs who I believe has MH issues eg banging during the night and generally just hostile since we moved in 2 years ago)

If we sell now, will have made about 40k in profit and can look to hopefully purchase a house with 3 bedrooms as oldest now 10 and may soon like own room though same gender as sibling

My husband however wants us to keep the flat and take as much equity out plus savings to purchase another flat that we will rent out as an investment

If we do it my way we may get a better quality of life in better property, if we do it my husband's way, we will have 2 properties (with one being rented out)

So...... what would you do?

OP posts:
Roystonv · 10/06/2021 08:09

Your way (and that's as a retired letting agent). Cos .... the regulations/legislation change all the time, the responsibility to be a good landlord and keep your tenants happy but not at your expense, tempting to fall into the trap of thinking that the property will sit there needing no maintenance/updating and blaming tenants for deterioration when it is you not being bothered to, the endless worry that the finances won't work out and the edifice comes tumbling down affecting your live, the time managing it or agent fees. Yes people still get away with vile, unsafe, overcrowded properties but don't be tempted to start letting as a easy thing to do with no safety net if things go wrong.

MrsTulipTattsyrup · 10/06/2021 08:11

Your first priority should always be a suitable and comfortable home for your family. I wouldn’t even contemplate buying a second property until I’d paid off the mortgage on our ‘forever’ home so that our own accommodation was secure. Covid has demonstrated how financially difficult things can get for small landlords, with some having to cover the mortgage on their rentals with no rent coming in, and the prospect of expensive legal action before they can get cash flowing in again. I wouldn’t be voluntarily putting myself in this position while my own family wasn’t in a suitable home.

Take the offer, get yourselves a home you will all love living in, and don’t look back.

neverenoughchelseaboots · 10/06/2021 08:13

Since the tax laws changed in recent years, buy to lets often don't give the income people think they do.

There's a tax bill at the end of the year which wipes out the profit for most people and often don't see the benefit until many years to come.

ChampagneJam · 10/06/2021 08:14

@Newkitchen123

Is this not a discussion that should have been had before you put it on the market?
Unless the OP has a time machine what is the point of posting a stupid comment like that?

I agree with everyone else, your way. I wouldn't sacrifice a comfortable family home for the hassles of a landlord and being resentful.

LawnFever · 10/06/2021 08:20

Your way, my dad became an accidental landlord a few years ago and tbh he’s now selling as it’s not worth the hassle (even via a letting agent) and doesn’t bring in as much income as some people may think.

He’s always having to sort something out, had a couple of bad tenants, issues with people wrecking the place/not paying rent - if you’re paying a mortgage on the rental and someone stops paying can you cover that? What would you do?

If you’re buying a second home there’s an additional stamp duty fee for a second mortgage, have you looked into that properly?

Brogues · 10/06/2021 08:22

Your way. Do you have pensions or other investments? If not it would generally be considered unwise to put all of your eggs in one basket.

Bells3032 · 10/06/2021 08:22

Your way. Had your dh done all the math. We had a similar consideration. Generally if you have a decent sized mortgage you will barely break even on renting out a property. It's very stressful and as some have said if you get a bad tenant it can drain your resources.

Dont forget when doing math to take into account

  • the excess stamp duty in purchasing your new home.
  • agency fees, safety certificates, inventory and cleaning costs
  • insurance
  • tax (remember relief on interest has now been removed)
  • repairs and replacements of any items in the flat
  • service charges or maintance to the building.
Aprilx · 10/06/2021 08:25

I think you should prioritise having the right family home. In the future if funds permit, maybe think about an investment property. But I would not sacrifice more comfortable family living for an investment property.

chipsandgin · 10/06/2021 08:25

Your way. Not only will you have a better quality of life (& life is short - take it where you can get it!), but you’ll end up quite possibly paying capital gains on your flat when you do sell eventually, you’ll pay tax on any rent you make in the meantime, the upkeep & hassle associated with being a landlord is easily underestimated.

Rewis · 10/06/2021 08:26

I'm all for investment properties and no problem being a landlord. However, I'd first sort out own living situation. So I'd get the 3bed house and then maybe save for an investment property.

Newkitchen123 · 10/06/2021 08:26

@champagneJam
What is the point of putting a property on the market without having the discussion them coming on asking total strangers on a forum?

Allgirlskidsanddogs · 10/06/2021 08:27

Your way, definitely.

Unsure33 · 10/06/2021 08:33

Buy a house.

Housemouse24 · 10/06/2021 08:34

I’m having this discussion with my DP too and I’m unsure but the good points he make are

  • when we switch to BTL mortgage we can also choose interest only so our repayments would be very low. We still wouldn’t want to cover them without the rent but we could manage for a few months if we needed to.
  • whatever the sums with the rent, even if we only make £100/month as someone else mentioned in 20 or 30 years we still have a second property to sell. Even if we only pay the interest on the mortgage, the increase in value of the property can give us a good chunk of cash which is much more than we could ever hope to make from a savings account.

He has friends who have done this successfully. None of them were born in the U.K. and when he first mentioned it I thought it was a crazy idea and ‘nobody I know does that’ then I had a look at myself and wondered if I just had a very British attitude to home ownership. His arguments are persuading me, not 100% sure yet.

Busybee5000 · 10/06/2021 08:38

Your way. Put your family first.

GabriellaMontez · 10/06/2021 08:45

Your way.

His priorities are wrong.

Has he worked out the details? Really properly. Expenses, fees, gas checks, repairs, empty months, time going round, finding decorators. Who will do all this..?

Sleeplessem · 10/06/2021 08:54

OP it’s worth noting with what @Housemouse24though that for IO mortgage you need a repayment vehicle to cover the outstanding cost of the property, not everyone has this xx

Theboywiththearabstrap · 10/06/2021 08:55

Don’t become a landlord - it can be AWFUL and a complete money pit if you have problem tenants.

Ickythefirebobby · 10/06/2021 09:04

Your way absolutely. We had a house which we used to rent out. Honestly it was a bloody millstone around our necks. Issue after issue after issue with repairs, tenants etc. I hated that house. Fortunately it eventually came out of negative equity and we sold it, making a fair bit of money. Even making money though, didn’t make up for the stress and hassle of renting the house in the first place.

bridgetreilly · 10/06/2021 09:06

Homes are for living in. 100% your way.

Seren20 · 10/06/2021 09:16

You’re a family of four in a two bed flat. I’d definitely be prioritising a larger family home!

IamThrough · 10/06/2021 09:18

Life is for living - not for making money! Buy a property that is likely to suit your family's needs in the years to come. If you buy something that will suit long term the chances are that you will build up equity in that one over the years (no guarantees of course)
I agree with previous poster though - such a fundamental decision should of been made before you even put your flat on the market - have you even started looking for your next property?

Nanny0gg · 10/06/2021 09:18

Your way.

Will he listen?

Mischance · 10/06/2021 09:22

You have a family, so providing them with a family home is the top priority.

If you could not afford a family home, then I am sure that you would make the flat work for you all - but you CAN afford it and so that is what you should do.

You will only be together as a family for a finite time and your children's childhood will flash by - it is NOW that they need the space and the garden.

purplesequins · 10/06/2021 09:22

sell and buy a property more suitable for your family situation.

being a landlord comes with lots of rules and responsibilities and is a risk and hard work.

imagine having someone like your neighbour as your tennant Shock