Would you sell or keep a rental property just now?

[JustRestingMyEyesForAMinute]

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?

We had two rental properties until last year, when we decided to start using the second one ourselves again as a second home, as the profit just wasn’t worth the hassle. We still rent out the other one.

I don’t feel that anywhere “nice” has a great rental yield nowadays, that’s all focused on the lower-end of the market, but we may want to one day move back into the one that’s rented out, so don’t want to sell.

If it was a place that really was just an investment it’d be different and we’d be putting it up for sale now.

You could ask them if they want to buy it themselves, and give them the time to get a deposit together. Another option if you want to be nice is to give them a long notice period before you start marketing it.

Im keeping hold of mine for the time being because the rental market is very buoyant in my area but the selling market is terrible. But I’d like to get rid of it really, the changes in legislation, tax etc aren’t making it hugely profitable anymore (i doubt it will increase in value much beyond what it’s worth now) and the hassle of tenants etc doesn’t seem to make much sense.

Ill only sell it when the tenants give notice though and give them first dibs through a private sale if they’d like to buy it at a slightly discounted rate (passing on the agency fees savings to them is fine with me)

@swifty1974 exactly.
What makes it worse is we were using some of the rental to help our dd with her home renovations. It's not just us who is affected.

Wow, I'm a terrible person because in the last recession we couldn't sell our flat even at a loss, we now are exemplary landlords, and want to send a small token to our tenants to apologise that we are selling. Gotta love Mumsnet 😁We have been those evicted tenants through a recession, unemployment etc, it was absolutely shit but ultimately it is probably the right decision for us to sell. We can ask the tenants if they'd like to buy it before we market it.

Sold 1 during covid and selling the other now too. To make a profit or decent investment you need a few so with the new rules I'm totally out now. I'm actually happy to allow 1 cat or dog - 2 if they already had them but not accepting no restrictions, perfectly happy with people on benefits too - it's the person not where they get their money that matters. At the end of the day it's my property, I'm a great LL but too much hassle now.

I know, half of people commenting have never and will never be a landlord so just do waht you need to do....I did everything right and was always on the end of the phone in cae anything broke or leaked or needed looking at. I did everything I could and sill they wrecked the place....its no joke being the landlord these days

Will you have to pay CGT?

Look at how much capital gains tax will cost you first.

With the proposed changes I would sell now. I also think there will be changes to CGT in the next few yrs.

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

tbf so is renting from a bad landlord

True but also irrelevant

Oh well then, op should just hold onto her flat forever so the tenants can keep renting it until they choose otherwise.

@swifty1974 how is it irrelevant to a point about stress?

If you actually read the governments EPC guidelines for landlords and properties being above ‘C’ in more detail, it actually says clearly landlords should take no action and more clarification will be given.

Personally if you have 1, just sell it. You won’t be making any money on it and there are better investments, plus it’s a flat which is just not worth it.

If you have more than 4, it’s profitable.

Unless you live in it for 6 months and then sell it. Then it’s CGT free!!

It's irrelevant to a point about selling a btl property....you know....the thing we're all discussing on this thread....

Just to be clear I pointed out that btl properties were stressful because I felt that this was an argument for selling up and moving on whilst others were suggesting the OP was somehow a really bad selfish individual for not hanging in there and selflessly providing a home for someone out of the goodness of her heart....

It's irrelevant to a point about selling a btl property....you know....the thing we're all discussing on this thread....

But I specifically replied to a point about stress! And pp had already brought tenants into the thread.

you know....the thing we're all discussing on this thread

Well the thread I'm reading has had a wider discussion.

whilst others were suggesting the OP was somehow a really bad selfish individual for not hanging in there and selflessly providing a home for someone out of the goodness of her heart....

case in point...😆

Do you think property prices dropping and a recession are on the cards? I can't square it with employment being so high.

If you can’t handle the stress that comes with renting or keep experiencing bad tenants then sell it

However if the flat ticks over by itself with good tenants and minimal work from yourself then don’t sell.

In the long term, once the mortgage is paid, then the rental yield and your overall profit will be bigger and could provide a good contribution towards your retirement.

But if you have other long term investments or pension products then there is less of a need to keep it.

Exactly this. Some properties do have good tenants who look after the property and it does tick over. I have experienced both the good and the nightmare tenants - the nightmare BTL was sold quite soon after but I still have the ones with the good tenants who look after the property and I am a good landlady to them so I have no plans to sell despite propose HMRC changes.

@HikerSpiker
Theres almost certainly a recession coming. Our economy isn’t recovering well. Plus interest rate hikes. Plus double digit inflation. Many unfilled jobs so no growth is very likely. Plus unions wanting huge pay increases and then striking to get what they want. Never mind the price of fuel and shortages. Very few businesses think they have a rosy future in the short term.

I think the inflation is more of a concern than interest rate hikes.

We had interest rates of c 5 % for many years prior to 2008 and weren't in recession but inflation was around 2%. I think interest rates have to go up a bit to curb inflation. Problem is, it will be carnage due to how much debt a lot of people have accrued in the era of low interest rates.