Main breadwinner dilemma - should I sell second home?

[Sleeples]

Hi!
Forgive my incredibly first world problem.
I’m married with two DD. I own a flat in an increasingly trendy area of London - it has 140 years on the lease. It’s bought entirely with cash, no mortgage.
I used to live there with my family but we’ve moved out of town and I still own the flat. It’s currently empty.
On top of my mortgage for the house we now live in, I’m in 50k of loans. I can afford all the payments.
I’m working FT and am the main breadwinner. My husband’s work is reliable but while I earn £55k a year he’s on less and is self employed.
Now we’re sending DD1 to nursery which is about £70 a day and will be four days a week. A lot of this is because when his work does come, we have struggled with the juggling act. I can’t afford this alone but he has said his salary could help.
I never wanted to be a landlord but I wanted to keep the flat so my DD have somewhere to live in London one day if needed.
But should I just sell to get out of this slight money squeeze?
It’s a one bed flat - worth about £240k…

Gosh, 50k of loans with a 55k salary. I would definitely sell the flat, childcare is expensive.

I would hang on to the flat for as long as possible. It’s an asset that will appreciate. Your child care expenses, although expensive, are temporary.

@ronfa you’re prob right. I feel a bit gutted because if my kids need it later, I’ve sort of ruined that for them. At the same time, market is good-ish and maybe best to live for now.

It seems a shame to sell just because your DH's business is unreliable. If the flat is a good rental and relatively trouble-free then it would be a nice asset to hang on to. Can he get a better paying job?

I've had property investments for c20 years, I sold one to pay for school fees and another will cover uni for my DC should they want to go in 5 years time. It's been a pain at times but I'm glad I had them.

@SalsaLove that’s just the thing. DD2 is 18 months so in a bit, she will get 30 free hours so it will ease off with the costs a bit..

I'm confused- why aren't you renting it?

Why not rent it out. That’s the best solution.
I really wouldn’t rush to sell.

I agree with pp that's a lot of debt on top of a mortgage. If you don't want to let your property (and I don't blame you, that isn't for everyone for so many reasons) that means your property will be standing empty for years (?) that can cause problems of their own or attract squatters.
It is great to have a property in your back pocket as a nest egg or future accommodation option but it has to be balanced against the other stuff.
Presume your dd not your husbands given his money isn't automatically part of the picture for nursery fees?

@GucciGucciCoo only moved recently and haven’t had chance to do it up a bit yet

Then surely a quick lick of paint and renting it out is your answer?

Could you find alternative options for renting it out that night be less risky. Given it is in London some companies /universities rent places for staff on contract... I don't know enough about it to recommend but you could maybe learn more by digging around.

Whatever you do please don’t just leave it sitting empty for 20 years until your infant daughters may or may not want to use it!!! That’s borderline criminal in the midst of a housing crisis.

I understand you don’t want the hassle of being a landlord, but can’t you get an agency to do all the management for you though?

Being a landlord isn't easy & not for everyone.

From a financial pov it makes much more sense to clear the debt because it's significant. You will still have the property you are in & should be left with a decent amount after selling the flat which you can invest for your dd.

The 30 hours makes things cheaper but not as much as you think & children in general are expensive. I would be worried your debt will increase in order to pay childcare costs.

I've just seen that you are not renting the flat out. In your case I would definitely do this. There are costs and hassle involved but I do think it's worth it. If your H is underemployed can he take some of the work on?

Why don’t you raise a buy to let mortgage on it for the 50k to pay off your debts and rent it out? Best of both worlds! The rent will pay at least the cost of the 50k mortgage, the house could be paid off before daughter is 18 and it will continue to appreciate

It’s only been empty for a couple of months. In that time between FT work and looking after DDs (18m and 3.5) every spare moment, amid regular bouts of sickness etc, it’s not been possible to finish it up and rent out. I’m doing my best! It won’t be empty for years

Could your dh earn more in an employed role?

If you want/intend to keep the flat, renting would be the way to go, you will have another income stream. Lots of flats stuck on the market in London, if they haven’t got outdoor space atm.

Life is busy & particularly working FT with 2 young dc - I didn't realise you had 2. Can I ask how come you are in so much debt & is it on a zero interest rate?

Also rental income would not be helpful exactly. Taxed 40 percent plus loads of extra charges - maintenance, agents, any damage/breakages. It may get max £1200 I think - no outside space.

@ronfa new house was a doer upper and costs escalated

To those asking about DH, he’s been doing most childcare so I could work. It could be that when he’s freed up, he would get more contracts. We don’t know until we actually try. He’s not underemployed, just not free really.

yes the joys of a doer upper! I have had one

@Sleeples

Also rental income would not be helpful exactly. Taxed 40 percent plus loads of extra charges - maintenance, agents, any damage/breakages. It may get max £1200 I think - no outside space.

If you take out a BTL mortgage you can claim the interest back on tax returns. Ditto fees and maintenance. It's not as lucrative as it was but it enables you to preserve your asset.

But I agree being a LL is not for everyone. A good agent is worth their weight in gold.

Property is much less profitable then it used to be & I expect it to become less so with increased levies in the future.

I received some inheritance & put it into ISAs & SIPPs for my dc, that's far more preferable to property in my opinion.