Renting out primary home so you can live in a rental?

[PancakeCloud]

Is this a terrible idea?

Current home unsuitable (small flat with with two small DC) and has been on the market for over six months. We had a buyer early on who then pulled out due to their financial situation. We have dropped price twice already. Gearing up to drop price further but getting less money for our current home will make finding our next home more challenging, and so we’re considering alternatives.

We have done the maths and while not very efficient, we could afford a rental that would be suitable for now based on our current income and potential rental income for our current flat. Rental income approximated based on local market, understanding 10-15% will go to a management company, and net of tax. We would get landlords insurance, which I haven’t factored in yet.

Is this a terrible idea?

All of that is utter bollocks. Lots of evidence that landlords are selling - I've seen numerous studies. Also, of course, most with decent tenants will wait until they leave and then sell.

And not more difficult to evict??? What??? Section 8 can easily take 18 months or longer and cost many thousands in legal fees.

Righto

https://england.shelter.org.uk/housing_advice/eviction/section_8_notice_private_tenants/how_much_notice

What's the notice got to do with it? The court process, particularly if contested, can take 18 months, and then another six months or longer wait for the bailiff.

Yes but that’s due to backlogs in court and has been the case for years. It has nothing to do with the new legislation or change from section 21 to section 8.

as well as the risk, consider how you would end this. Can you afford to have it vacant for a year to sell at the end? Would you sell under sitting tenants? Or do you plan to rent for five or more years?

Yes that is the other thing, if you do get tenants in surely you’re just making it even harder to sell- because you’d either have to sell it with a sitting tenant, evict them
and then start viewings (and chances are they won’t have looked after it quite as well as you would have done), and you might have to exit the tenants.

I honestly think if you can give the flat a bit of a glow up and live with it for a bit longer that’s your best option. A garden isn’t essential if you can get to a park and at least your bills will be low- plus most box rooms fit small bunks if necessary (look at the ikea kura). In a couple of months the one of the various wars could have concluded and the market won’t be flooded with landlords trying to sell because of the new laws. Either stay for a bit longer, or reduce the price more and take the financial hit in order to move on.

May be start with the spelling

But that wait time is going to get longer

Could you go through the flat Marie Kondo style and sell FBMP/ebay or charity shop or throw anything you don’t need or want to keep.

Then arrange the rooms like a lifestyle magazine so it looks like a 2 bed flat someone could live in with children without it feeling like it is too small/cramped
Even if for a while it means renting a storage locker for bigger stuff you don’t use everyday or using those shrink bags for things like winter duvets clothing pillows etc and use your car when viewers are coming round to remove washing airers, anything that doesn’t fit in a cupboard and the detritus of everyday life so all surfaces and sills are clear

Either that or do what a few friends have done all be it in a 1 bed flat with 2 dc

Still down size your possessions but then the main bedroom becomes the dc’s bedroom and use the box room as a store room/ toy room/clothes room
Then get a Murphy bed or a sofa bed for the living room for you and dh and stay till the current climate has eased

Some friends have a garden flat and they had installed a tiny home/office type place with sink and a small kitchenette which they use for when friends come over and can sit and talk in there without disturbing sleeping children

Personally I don’t think the effects of the latest rental reforms have hit yet.
This is the calm before the storm.
Anyone saying that the latest rental reforms haven’t had a huge impact is showing they don’t understand what is going on.

If the only reason you are moving is because of space I would stay put for now and make changes to how you live.
Save, take on extra work and bank as much as you can so when things do settle you are in a position to buy.

Dont be afraid of a tumble in property prices, especially as you want to buy something more expensive

I did this once. I had a small flat and needed more space. However things were very uncertain at my work and I didn’t want to commit to a bigger mortgage in case I ended up without a job.

i rented the flat out through a letting agent, and then rented a house for myself. I got a lovely tenant who never caused any problems. I even made £250 a month profit where the rent I received exceeded my mortgage costs.

After 18 months my work had settled down and I was in a position where I wanted to buy. Luckily at the same time my tenant decided she wanted to move out, so I didn’t even have to evict her.

Worked perfectly for me , but maybe I was lucky.

One thing to consider is that you will need consent to let from your mortgage provider. That’s something to check first because not all mortgage companies will agree to it.

Thanks for resurrecting this thread and yes I think we will have to do this.