Rent out or sell ?

[Jenkibuble]

Unsure whether this is best place to post this - have also posted under finances:
Youngest has finished education now - 18 , and so I am no longer tied to where I currently live. Their dad remains in the area so in holidays he and sister can still return etc. To add I bought him out the house .
My job could be done completely remotely (currently do it hybrid)
I have been discouraged from renting it out - responnsibilities mainly and non payment of rent / risk of the house getting trashed etc.
Mortgage is 800 a month and been told I could get 1200-1300 rental. The area I live in is subject to licenses for landlords so would have to pay 900 for one (lasts 5 years ) as well as rental insurance and agency commission.

The alternative is selling = is it a good time to do this . I have got the benefit of not being in a rush so could hold for a half decent price . The areas I would look at buying in would be more expensive (though can downsize on space !)
I am loathe to come off the housing ladder completely (leave something to the kids )
I have 24 years left on mortgage . I am 44

I feel I have waited for this time (to be able to relocate ) and now in so much uncertainty .

Any current / previous landlords advise etc.

TIA

You will need to live somewhere (and you’re looking at a more expensive area) and you don’t have much equity in house (if you have 24 years of mortgage to go.

Can’t quite understand why you’re asking the question. If you rent out you’d get money (but subject to fees and tax etc) but where will you live? What about a lodger and overpay mortgage to bring down the term?

Dont forget if something goes wrong when your renting it out youd need to pay so need to make sure you have some savings behind you! also need to pay yearly gas safety check etc.
The housing market is terrible at the moment too, so not a good time to sell neither.

I wonder if you’re being wooed by the difference between your mortgage and potential rental income. When everything is factored in, there’s not a lot of profit and there are reasons that many landlords are getting out.

Are there specific reasons you don’t want to stay where you are?

I rent somewhere out and if it is your only rental you do need some capital. These days tenants will take you to court to keep their deposit, which is time consuming and costly, while repairs have become increasingly expensive with the rise of prices and labour costs. If the property is family size you may find you change tenants more frequently as people opt for a mortgage over paying rent (area dependant). So each EOT you need to budget for repairs/repainting/recarpeting/gardening etc because even if you are owed their deposit it can take months to actually receive it and you will need the income of it being re-let to finance your current living.

Don’t forget capital gains tax when you sell it if it’s not been your main residence for a minimum of 21 months (or that used to be the case anyway)

Just to add you should factor in things like boiler repairs/new boiler and if you are leaving white goods you are liable to replace those - very hard to prove they have broken them even if they are only a few years old.

It's not like the 90's where I remember being super careful of scratching the wall or replacing white goods sourced through friends if they died (appliances, not friends!) - a lot of people just trash the place and expect you to foot the bill.

Work out the cash benefit in moving to the new place.

What will you gain in mortgage, CT, fuel bills, maintenance etc as well as a lump sum. All this might not be insubstaintial.

Also need to think what if the tenants stop paying the rent, can you afford to continue paying your mortage + the usual landlord fees without any rental income coming in? Its becoming more common sadly!

Landlording is not for amateurs and there is new legislation on the way in that will make it even harder,

I guess I feel like I have no ties here now. My ex brought me here (prior to having kids, in 2003) The area (city) has become unpleasant and declined too.

I do know the grass isn't always greener !

Landlording is increasingly only something people with multiple properties can afford to do, usually because they delay repair works and continue to take the rent.

The gov have tried to protect the tenants but are taking from the wrong end - should be targeting the super rich who don't do repairs not the ppl who want to maintain their only asset while it is being rented.

No, I would be ethical/ moral and ensure it is liveable in. Boiler is relatively new, but it is an old house so inevitably stuff happens !

Sell.

Yes, my point is it isn't going to be the people who only have 1 property they want to keep who don't do this. It's the slum landlords with multiple properties who don't want to use profits to keep them maintained. Having multiple properties doesn't mean they are skilled in any way at all, it means they are sinking their profits into profiteering rather than maintaining.

when did you cease living in the UK?
Private residence relief was never 21 months.
It used to be 3 years (36 months) but that was reduced to 18 months wef 6 April 2014 and then further reduced to 9 months wef 6 April 2020

CG64985 - Private residence relief: final period exemption - HMRC internal manual - GOV.UK

That wont meet the affordability for a btl mortgage .

what rate btl can you get?

I wouldn't just become a landlord accidentally, by default. Your profit margin sounds really small and not worth the hassle. You ll also owe( eventually) CGT for the portion of house value appreciation, for when you were not living there, at a max of 24%, for higher tax payer. That's a tax consideration.
Couldnt you just buy a house (to live in) in a location that inspires you, where you'd love to be. Not having to commute could really opens up your choices.

I wouldn't rent out (having done it!). Don't forget if you buy a second property you will then get hit with capital gains tax if you then sell the rental property.

What do you mean ?

Thanks for all your advice and suggestions - lots to consider

You need a buy to let mortgage to rent out your home
rates are typically higher than residential mortgages

affordability is not based on your salary but on the rental income. If you are a higher rate tax payer it also impacts on the amount you can borrow

the income is taxable but you get basic tax relief

the figures you gave above are unlikely to reach the affordability as they build in it being empty for 2 months of the year, tax, running costs

go on line and do a dummy btl mortgage application and see what it says

This nails it for me which is why I’m selling up.
Government hate small landlords and are set to make it very difficult for us so I’m getting out whilst I can.

Think this through carefully. Look up some of the Landlord forums on Facebook. It’s an eye opener.

Firstly just a comment in relation to some of the posts here about big landlords and single property landlords, I see all the time on this forum how the small landlord is hated, they're evil blah blah blah. Posters feel that apparent professional landlords, big comparnies are better - no they're not!

Next OP - I feel like half the query is missing. Why are you looking to move, ok you have no ties but is it because you dont like it or you prefer specifically some where else? And if so, why are you looking at renting rather than selling and rebuying? Where do you think you're going to live? You'll have no security because your landlord if youre renting could just sell or end contracts in due course and you'd have to keep moving around

We’ve just sold our rental, we bought it originally for our son to live in while at university.

Tenants were fine but I’m very pleased to be out of it.

It’s not really a question of sitting back while the money rolls in. There’s all the certificates etc and repairs crop up unexpectedly and it’s not like your own house when you can leave it for a while.Constant back of the mind worry.

So this is a relative.
Let his only flat to a young couple to give them an opportunity. One week in she admits she’s pregnant and now can’t work.
after first month can’t pay rent then claim someone has been in flat and cleaned it and now wants locks changed. Weird or what. Landlord asks them to inform police of break in, they don’t inform police.
Parents are abusive on telephone to landlord. Want locks on doors changed despite new lock being replaced prior to their tenancy.
Now do not respond to messages from landlord requesting to meet. do not pay rent after first month.
who is in the wrong!!