Trying to sell - advice please (long but please help me!)

[AddictedtoCrunchies]

We've had our house on the market for three months, it's a two-bed mid terrace in the town centre close to bus and railway station. It's well decorated, has off road parking for 2-3 cars, a little bit of outside space and would be perfect for a first time buyer or an investment buyer. It's up for £109,995 which is about right for the area and size.

But we can't seem to sell it.

The area it's in is known in the town for being very cosmopolitan. There are ethnic supermarkets and it's a hive of activity for Goans, Indians, Pakistanis and Italians. It's bustling but sadly has a reputation as years ago it was the red light district too (I don't mind it - I've been here 10+ years). Someone was stabbed outside a house about 10 doors down last year so a Google search would bring that up. That's already seen off a buyer .

Those that live in the town and are 'english' (ie white) don't want to know because of the reputation the area has. People are sometimes scared of what they don't know, as I said I've had no problems here in 10+ years. Those who are non-white english or Goan/Indian etc don't want it because the two bedrooms aren't massive (they are doubles) and they tend to want to buy as two families together so it's not big enough.

Disclaimer: I've tried to explain that as best as I can, please don't slate me for using the wrong terminology.

I like it here. It's cosmopolitan (in as far as a West country town can be), close to stations, shops and work and we can walk everywhere.

Reasons we want to move are:

• DS starts school tomorrow and is in the school we really wanted which is where we want to move to. It's an easy drive but I'd prefer to walk him then catch the bus in to work.
• it's only two bed. DS is 4.5 and massive so we need more space
• there's only a small bit of outside space. DS is full of energy so we want a garden for him to play in
• next door (tenants) are very lively (to put it mildly) and I want some peace

We've had a few viewings but all have said 'too small' or 'stabbing'. So should we:

• carry on and just keep hoping?
• investigate auctions?
• drop the price? (mortgage is £100k so don't want to drop much lower than we have already)

If you've read this far then thanks. WWYD?? Any tips?

Yes that's what we thought. Rent should be £200-£250 over the current mortgage so we will just overpay that amount each month. In a few years we will have built up some equity and be back on track.

Thanks for all your replies.

Fingers crossed interest rates stay low for you and don't forget to be realistic about voids (most landlord friends I know calculate that they will get no more than 10 months rent a year to account for this, and do their sums on this basis). Make sure you do your homework on gas, electric testing etc and put the deposit in an official tenancy deposit guarantee scheme or you will legally be liable to repay your tenants 3x their deposit when they leave. Are you going to manage it yourself or pay a pro?

Addicted, if that £200-250 is net of tax then it sounds like you have a decent cushion from a rental perspective. I'm not sure if you are planning to buy or rent when you move but I'm guessing you've currently got a very good mortgage deal (base rate tracker?) - wouldn't the savings you could make from porting it (as opposed to taking on another mortgage or renting) offset what you may lose by taking a hit on the price (IYSWIM)?

Consider also if you are buying that you will be doubling your exposure to your local property market. Whether you think this is good or bad will depend on your outlook for prices but it sounds like things are quite difficult there.

BTW don't consider yourself to be 'straight' by obtaining consent to let - without it you would essentially be comitting mortgage fraud and you really don't want to go there. Good luck with whatever you decide to do.

Hi,
I know you have had some great advice. Your house looks good but here?s another tip as we house hunted for months.

We recently bought a house and the previous owners put all of their big pieces of furniture, extra coats, clothes etc in storage e.g. Nothing in the alcoves downstairs, minimal books etc. Only the basics eg dining table, sofas, nice rugs, No huge shelving with bits and pieces, wardrobes or dressers. There was only one chest of drawers and a bed in the master bedroom (built in wardrobe). The second bedroom just had a bed. This made a huge difference. We looked at loads of places and this house looked like a show house because it was so empty, very clean too and we could immediately imagine our furniture inside. They made a huge effort to sell it with flowers, fresh bright fruit centre piece in kitchen, no weeds in the garden etc

It is a bit of a drastic solution but the cost of storage is minimal compared to waiting months for your house to sell. We plan to do the same when we sell as this place immediately had offers compared to a similar house on the same street which had all the furniture inside and took a year to sell, looked dark and sold for less.

We're planning to move into rented whether we sell or rent. And if we do rent ours out we will do it through an agent - I'm too wary of doing it privately in case something happens. I'd rather be backed by a company with some experience.

We have enough money saved up to cover three months mortgage and bills should the worst happen.

Sadly we're not in a position to get a larger mortgage at the moment which is why we're going into rented. but hey, there's nowhere in life's rule book that says you have to buy your own place. If renting works for us for a while then so be it, that's our theory anyway.

Thanks again for all your advice. It's invaluable.

Good for you addicted. We're selling ours to rent and wait for the market to go down so that the next step is more affordable. Moving up the ladder worked in the past but today you have to be a bit smarter to avoid NE I reckon. Also with a new baby on the way and a relocation planned, I'm at the limit of flying so won't be able to view new houses and whilst I love DH - he ain't picking a house on his own.

it is not quite as straightforward as using difference between rent and mortgage to overpay on mortgage as the rent is taxable income and only the interest part of your BTL mortgage can be offset against this. Presuming you have a repayment mortgage you will be taxed on the remainder of the rent which could for example be 40% of £300 each month depending on your tax bracket and the size of your interest part of the mortgage. You also need to allow for the agent fees of 10 to 15% per month