To Let or To Sell? That is the question - what would you do?

[Fettle]

We are moving due to DH's job in April to a house provided by his job for which we have to pay rent.

We are currently living in our own house which we are very unlikely to ever return to live in again.

So I'm just wondering whether you would let out your own home or sell it, banking any profit for when you buy another house.

We are unlikely to be living in our own house again for 4-5 years, I'd say and in that case it probably definitely won't be the current house we are living in.

If we let it out, we should get more than enough to cover our mortgage, but will be at least a 4 hour drive away, so will need a fully managed let by an agent.

If we sell, we will be in a strong position as future buyers, but may lose out on current house prices, although our neighbour's house is on the market for more than we bought ours for.

Thanks for any advice/thoughts for us to consider!

My husband and I relocated for his job in October 2008, it was a 3 year contract for the job, but we chose to let our property out, the drive was only 1 1/2 though.

However my hubby was made redundant in November 2009 and the tenants wanted to move on, so we got our old flat back near old friends when he lost his job unexpectedly.

So we made the right choice for us. It's been so good to come back to old friends and familiar surroundings with the shock of his loss of job.

Not exactly helping you here I suppose but at least you can see one side of the argument?

I would let it out.

If you sell now, you are selling at the bottom of the market. Wait a few years and you make more money.

Especially if next door is on too, you are competing for the same buyers.

Plus it could take a year to sell it, and if you have moved away it is empty. That is a complete nightmare.

Rent the place out and it might be a source of income, although a small one if the rent is more than your mortgage payment.

You don't necessarily need to have the agent fully manage it. Let them find your tenant and reference it, and collect the rent for you but the rest of it you can do.

And there is so much uncertainty in the job market at the moment, nobody is safe so I would always have a back up plan. Keeping your own house is a great option.

There is a mini boom in housing atm as rates have stayed low and this silly govt are ploughing more money into the banks QE.So mortgages are cheap and they are more available than last year This will probably last until the election.I think you should sell as I would not be surprised to see huge falls at the end of this year and into 2011 and 2012.

letting is not as easy as people think, even with an agent (for whom you will pay min 10% for the pleasure of managing your property). You will still have to pay maintenance, fill out tax returns, arrange mortgages etc. If you are 4 hours away then managing it yourself could be tricky unless you have family/friends who can help you out.

If you need to sell it then you will have very little control over viewings, the state the property is in when it is viewed, and juggling offers with giving tenants notice etc.

but on the other hand - what you will do with the money in the meantime - given it will prob sit in a bank doing f all.

HH you are right letting can be a minefielf but people simplify it in their minds hence the mass of 'landlords' up s creek!

I'd keep it to track the market. That way you wont need to worry if things go up and you will be 4 years further into your mortgage. But it isn't a free ride and you will have hassle and expense (I've currently got my fingers crossed that our house won't be needing a brand new boiler.)

If you decide to let, you need to tell your mortgage company that you are moving out but intend to live in the property again (cos you never know for sure). Most will then let you keep your current deal, which will be cheaper than a buy to let.

Thanks all!

Lots to ponder! I hadn't really thought that I'd need to let my mortgage people know, but of course we would!

I have to say letting fills me with dread, due to all the possible things that might go wrong (I'm a worrier!!). And because we are so far away we wouldn't be able to keep an eye on it ourselves. Feel it would be less hassle to just have money in a bank (Albeit doing f all!!!).

I'll discuss with DH when he is home a bit more - he things we should let, so we're very much undecided!

Thanks again - anyone else with any other things to consider?

Fettle - I've got a similar problem and have started a thread in Property also. Will watch this with interest

Ideally, we would want to keep our property as a long term investment for DS but are scared sh*tless about renting it out. DH said he would let an agent manage it and he doesn't even want to see the tennants but I'm of the mentality to meet the tennants before agreeing who to let to as I think you can tell a lot about someone when you see them face to face.

Obviously this is all theory atm as haven't found a house we would like to move to yet!

Fettle,

we are considering renting ourselves and spending a few months doing up aour flat before selling, so I am also interested in following your thread.
The other point that you could consider is that even though you won't gey much interest rates have risen.Moneysaving expert say
'3.35% easy access, or a whopping 4.7% if you lock your cash away for 3 years.'
www.moneysavingexpert.com/banking/
At least it would give you something. It is difficult to know how house prices will go, renting is more complex than I think we are led to believe .

My parents sold their (mortgage-paid-off) house in 1984 when dad had a 4 year overseas posting. They thought they'd come home and be able to buy anything they wanted, having saved most of their salary during the posting.

What actually happened was that house prices had shot up and the money in the bank hadn't kept pace. They ended up having to settle for an ex-council house, smaller than the house they sold, in a horrible area and having a mortgage again.

If you sold, would you be able to keep the money separate, or would it gradually disappear? If you are claiming tax credits, or for student funding your "house money" would be taken into account as savings, which may affect the amount you would get/ be expected to pay.

We are having a similar dilemma as we can't sell our house but have had to move for job relocation, so will watch this thread with interest.

I loved my UK house, and was nervous about renting it out. But didn't want a house to stop me having an overseas adventure. I thought I would be upset at it being tenanted. And it was a little strange when we inspected it this summer. But actually, as soon as I was on the plane I forgot about it. I've known a lot of people in the same situation at elvis' parents and wanted to avoid that problem. We're now trying to buy another house overseas which would be a lot easier if we had some equity. But neither of us would be willing to sell the UK property to do that.

Fettle- you would also need to do a few things, like get a gas check and different insurance but none of it is too difficult, just a little admin. We joined the landlords association which is useful and gives discounts. An agent would help guide you. Remember their fees are negotiable. We pay 9%.

Thanks all again!

It is interesting to hear your different stories/arguments - very helpful!

A friend of mine here says that if I do decide to let it out, I should look on it as a business enterprise and not as my house - that way you take the emotion out of it and deal with the losses (as well as any gains!), in a sensible manner.

I'll keep having sleepless nights about it whatever we decide, cos that's just what I do!

I found renting through an agent with them doing all maintanence easy to deal with. Taxes were a complete nightmare (I was a student at the time and not earning and each time I saw a different tax man they gave a different interpretation of what tax was needed, so in the end did my own tax returns and reading all the literature on tax on rents was a nightmare, but I knew it better than the local tax office in the end.

I lived in the house for 4 years and rented it for 4 years before selling it, I just about made it the 50% time living in it to avoid the tax that you pay on selling a previously rented property..... an important aspect to keep in mind if you are intending to sell after renting rather than moving back in.

So in summary of my waffle - look carefully into tax issues before you decide.

Personally I would sell it - or try selling it first. We were in the situation where we couldn't sell our house a few years ago but I decided renting it out would be a complete millstone around our necks so we hung on until it eventually sold.

House prices are unlikely to go up hugely - down in fact after the election and when they are forced to stop the QE (IMHO). You may want ready cash if you find another house you want to buy which would put you in a stronger position and you wouldn't want to be turfing out your tenants I'm sure!

Good luck whatever you decide

I have to say that that is one of things concerning me that we may not be able to sell it when we want/need to sell it so as houses are selling currently wouldn't now be a good time to sell?

But we may miss out on any future house price rises.

Hadn't considered the tax in selling it if it was rented out. As it is still our principle home that we are being forced not to live in due to dh work I wonder if there is an exemption? Must investigate!

Aarrghh. So hard!! Suppose should get some agents round and see what they say!!

Thanks again all!

Just had HIP guy round and he says he has never been so busy abd everything selling really quickly.His elderly mum viewed 5 places and all sold at the weekend!Sell!

Hi all

Sorry to resurrect this thread, but we've had a surprise twist!

House next door is currently being fought over by 3 buyers, so the agent selling their house (who we'd had round a couple of weeks ago for a sell and/or rent quote chat) rang me and asked whether I would be interested in showing the "disappointed" buyers round our house - we have yet to formally commit either way to selling/letting/keeping as a weekend retreat! I said yes, thinking I wasn't really going to lose anything, so couple number 1 came round this morning and immediately came in with a relatively good offer £10,000 under the asking price of next door.

What do I do now? Fight for more obviously, as it is not quite enough, as we've done some improvements that next door haven't. But I still can't decide whether to rent and hang on for possible house price rises, or whether having the money safely in a bank, will take away from the hassle of renting (it is a relatively large 4 bedroom family house, so possibly not as easy to let out as a 2 bed flat?).

Another complication, is that we've realised we have early repayment charges on our mortgage, which although not huge, need to be taken into consideration!

Aargh - so hard - come on you psychics - tell me what to do?!!

Bump just in case anyone has some other thoughts/views.

I would sell now there aren't going to be rises!I think post election because the so called recovery is built on debt and ridiculous unsustainable interest rates we will see the real recession kick in and biggish falls.Sell now or stay put seems to be the advice of agents here in teh south east.

Thanks noddy. Think I'm veering that way.

Try and get your redemption fees covered by an increased offer.We have just sold and have bought somewhere else and the agent said it has been mad for a few months but is slowing down

what about making the agent work for the fee you may well be paying him and get him to show your house to disappointed buyer number 2!

How far off are you from getting out of your early redemption charge? It could be part of the sale to exchange but not complete before X date.

I have just sold my house, and it is stressful so to have a buyer put in an offer without your house even being on the market is amazing. I would bite their hand off, as long as they offered the right price.

We took a slight hit on our house as we had cash buyers, no chain. Mainly because we wanted out. We wanted out so badly that I am MNetting from a hotel room as we couldn't match our completion dates so I am living in a hotel for a few weeks with my lovely DH and 2 children. But then we get an amazing house at the end of it.

The housing market isn't as great as it has been, renting your house may not happen, there are several empty ones near me. I'm a take your cash and run type

Agree with fizzy RUN!!!!!!!!!!!!!!!

Thanks both of you - I'm going to go and see the agent tomorrow and work it all out with them (including what fees they are going to charge!)

Our issue is we won't be in a position to buy immediately again, as we are only moving for 14 months, before we move on again to only God knows currently!! But it does seem silly to turn down a very easy sell, when one practically fell on our lap, but DH isn't so sure, but he's working away from home at the moment and isn't really in the right place/frame of mind for making any life-changing decisions. Due to the nature of his job, we really don't know when/where/how we are going to finally put down our roots (if ever).

So hard, with too many "what ifs?"!

Thanks again!

What sort of property have you got?

That would probably swing it for me. I'd be more inclined to keep a trouble-free 2BR flat in a popular area than some sort of eccentric listed Jacobean cottage that could throw up all sorts of ruinously expensive maintenance problems. Fixing a leaky tap I could deal with as a landlady, replacing a thatched roof or underpinning a subsiding house I could not.