Would you sell or keep a rental property just now?

JustRestingMyEyesForAMinute · 2022-06-16T09:30:47+00:00

We have a tiny flat that we rent out, it was our first home, we couldn't sell it during the last recession so clung onto it over the years. We would now be able to sell it and release the equity in it, we just can't decide whether to. On the one hand I like the idea of having a property as 'an investment' but on the other hand now is a good time to sell, we don't know what the future holds, and we could invest the equity in some other way. We've never sold anything (only failed to sell for 2 years) so it feels like a big step but it makes sense I think?

Original poster

JustRestingMyEyesForAMinute · 16/06/2022 10:31

I should add that despite what I consider to be very high rent charged to our tenants, after mortgage, tax, fees, repairs etc, it makes very little profit.

OP posts:

Pea79 · 16/06/2022 10:35

If it were me, I'd keep it. Although it's not making much money from month to month, it's an asset likely to appreciate in value that you will make money from in the long-term (whenever you do come to sell).

Lineala · 16/06/2022 10:38

How much is not much profit? You need quite a buffer at the moment as mortgage costs will rise by a couple more percent before this government has finished. You also need to consider what the epc are. Below a C and I'd sell.

AntikytheraMech · 16/06/2022 10:39

We're at a bit of a peak, like 2007/8. Plus regulations are tiightening up for landlords. (EPC rating, tax implications, no fault evictions, etc). May be a good time to let it go and put into other Investments or clear down your own debts. Interest rates are getting better, so you may do better with savings accounts and no hassle as well as property prices falling over the recession.

worriedaboutmoney2022 · 16/06/2022 10:44

How many more years is the mortgage term?

RainingYetAgain · 16/06/2022 10:46

Keeping mine, but they have B EPCs, and easily rent, so little down time unless we have them redecorated.
My biggest worry is the proposed legislation regarding pets. The freeholder lease forbids pets so I'm not sure how that works , although keeping a dog or cat is a 2nd floor studio flat seems cruel in my view.

Original poster

JustRestingMyEyesForAMinute · 16/06/2022 10:52

Excellent point about the EPC. Despite being the warmest, cheapest flat on the planet to run, the EPC was below a C and they refused to listen to reason about it. The EPC in no way reflects reality and is a pain in the neck for us to get around.

Mortgage-wise we have another 15 years or so I think? It's worth about £145k and we owe £80k on the mortgage.

I'm leaning towards just selling although I feel bad for our lovely tenants. We've been there ourselves as tenants and it's rubbish. I'll send them a bottle of wine as a sorry 😳

Thanks for all the thoughts.

OP posts:

averythinline · 16/06/2022 10:56

In same situation we're just selling ours and takkng the equity out....the reduction in stress is great.... the profits weren't loads and no longer have to worry about additional costs/tenants etc..or lease

Our tenant had mentioned having to move anyway as outgrowing it so although its sold quicker than we thought they're ok...

Depending on the flat/area its not always financially sound....using the money to pay a chunk of our mortgage and reduce our general costs too...

swifty1974 · 16/06/2022 11:16

With the Governments latest drive to give tenants even more rights I'd be out of there if I were you. I had 3 btl properties and sold them all a couple of years ago when HMRC started incrementally reducting tax allowances. Depends on your situation I suppose. If youve had them a long time and have decent equity or arent mortgaged up to the hilt you'll probably be making a good return so it might be worth holding onto. That said it only takes one bad tenant and youre in a whole world of pain.

ponkydonkey · 16/06/2022 11:25

I'm in the same situation! Can't decide what to do, it's a Victorian flat so epc is D!?

It's a lovely place and I was keeping for my kids to have when they are older...

The return on it is quite high, low mortgage etc

Not sure what to do... I guess I could save the cash and buy a holiday home somewhere? Can't decide

Legoandloldolls · 16/06/2022 11:26

If my tennants was to give notice I'd sell upand pay down my own mortgage.

EPC changes which we dont know for sure we can meet yet ( mines a D) changes to section 21, always the fear that Labour wanted to bring in right to buy private rentals etc it gets more uncertain each year.

But we bought ours as our first house 17 years ago so I feel we did the long term investment thing. We dont make much profit either but I do feel it's been worth doing. Has it served its purpose? If so then get rid.

AngelfishDecay · 16/06/2022 11:49

I'm leaning towards just selling although I feel bad for our lovely tenants. We've been there ourselves as tenants and it's rubbish. I'll send them a bottle of wine as a sorry

Yeah, 'cos a bottle of wine really makes up for being made homeless and having to find somewhere new in the current climate.

AceofPentacles · 16/06/2022 11:53

Isn't it enough that it's paying your mortgage off regardless of profit ? So much greed out there. And yes we are being evicted and can't find anywhere because everyone is selling.

Wheeloffortune21 · 16/06/2022 11:53

Sell.

It's a good time to sell and if you're not needing to look for a place elsewhere for yourself then id say its a no brainer in this current climate.

That being said, maybe make sure your marriage is solid first as a wee place to escape to if you broke up might come in handy to hold on to. But that's just the pessimist in me lol.

swifty1974 · 16/06/2022 11:54

AngelfishDecay · 16/06/2022 11:49

I'm leaning towards just selling although I feel bad for our lovely tenants. We've been there ourselves as tenants and it's rubbish. I'll send them a bottle of wine as a sorry

Yeah, 'cos a bottle of wine really makes up for being made homeless and having to find somewhere new in the current climate.

Lets not get all teary eyed, its a business. My experience is that the tenants couldnt give a monkeys about your wellbeing most of the time....put yourself first and do what suits you....

11Hawkins · 16/06/2022 11:55

I wouldn't evict and sell. I'd sell it on as a rental property with tenants.
There's not enough rental properties out there and to sell just because your not making a huge profit is shit.

swifty1974 · 16/06/2022 12:01

11Hawkins · 16/06/2022 11:55

I wouldn't evict and sell. I'd sell it on as a rental property with tenants.
There's not enough rental properties out there and to sell just because your not making a huge profit is shit.

Life is shit....you'd not be saying that if it was you who was making bugger all from it, having to complete tax returns every year, dealing with repairs and mithering tenants all the time and worrying about paying the debt off.....get a grip ffs....youve got to do whats right for you

greywinds · 16/06/2022 12:02

I'd try and sell now because if things do worsen (either economy or legislation wise) and you decide to try and sell in the next few years you may get a worse price.

Who knows maybe your tenants want to buy?

If it's not very profitable, can't see why you'd particularly want to hold onto it?

Hoppinggreen · 16/06/2022 12:03

I would sell ot
i have owned a rental property in the past but now with tax and legislation changes it’s just not really worth the hassle

Hoppinggreen · 16/06/2022 12:06

11Hawkins · 16/06/2022 11:55

I wouldn't evict and sell. I'd sell it on as a rental property with tenants.
There's not enough rental properties out there and to sell just because your not making a huge profit is shit.

No, it’s a smart business decision

senua · 16/06/2022 12:07

Do some sums and decide what figure will make it worth selling. Put it on the market and see what happens - if it doesn't reach required price then hang on to it.

Historically, property has been a good investment but, for most people, it's too much money tied up in one place. It's better to diversify your portfolio.

You only hung onto it because it wouldn't sell. Surely, it makes sense to try to sell in a boom. Imagine if you had to sell in another slump ...

astoundedgoat · 16/06/2022 12:10

I would not sell it. That mortgage will be paid off before you know it and it'll be bringing in a nice bit of money for kids' university etc., or even to sell THEN to give them deposits for their own homes.

If you have tenants who are happy there, just stick with it.

We have a rental property and it was an unholy nuisance when we were with an agency popular with people coming to work in our city for the short term, because people kept just staying for a year, but our current tenants have been there for 5 years, keep it beautifully and we're gutted that they're moving out in early 2023.

(The bottle of wine thing is tactless though - if for some reason the council told you that your house was condemned and being demolished in September and you had to find somewhere else to move to in 12 weeks from now, I'm not sure a bottle of wine would make the upheaval any smoother).

MrsBrianODriscoll · 16/06/2022 12:12

I would sell.

Floella22 · 16/06/2022 12:22

We let our house whilst we're living abroad.

When I heard the proposed new regulations this morning that was it for me.
Our tenant will not allow us in to repair the damage almost certainly caused by him.
After 3 months of him refusing to even speak to our agent who has followed the rules to the letter we gave notice to leave.
He's behind on the rent now and will leave when he's ready apparently.
So a minimum of £1000 in fees for a court possession.
After our expenses, tax bill etc it's just not worth the hassle.

All you tenants who blame greedy LL's and complain about there are not enough rentals I will be paying utilities to keep a beautiful family home empty because I cannot go through this stress again.

I wont sell it because it will cost more in capital gains tax than 5 years of utilities when I wish to return.

swifty1974 · 16/06/2022 12:27

Floella22 · 16/06/2022 12:22

We let our house whilst we're living abroad.

When I heard the proposed new regulations this morning that was it for me.
Our tenant will not allow us in to repair the damage almost certainly caused by him.
After 3 months of him refusing to even speak to our agent who has followed the rules to the letter we gave notice to leave.
He's behind on the rent now and will leave when he's ready apparently.
So a minimum of £1000 in fees for a court possession.
After our expenses, tax bill etc it's just not worth the hassle.

All you tenants who blame greedy LL's and complain about there are not enough rentals I will be paying utilities to keep a beautiful family home empty because I cannot go through this stress again.

I wont sell it because it will cost more in capital gains tax than 5 years of utilities when I wish to return.

Feeling your pain....al these bleeding heart liberals would have you just keep going till it bled you dry....hope you manage to get out unscathed....you'll be better of without the stress.

Thats the other thing that nobody mentions....stress is a killer and renting houses to bad tenants is VERY stressful....Good luck with the sale