Would you sell or would you rent out?

paddyland

A very simple question, please, which may also be relevant to other hard pressed home owners struggling with mortgage repayments.

Given a property with mortgage repayments which are difficult to keep up, and given an opportunity of moving to somewhere much cheaper, would you recommend selling or renting?

To sell the property involves taking quite a hit now, as property prices fall dramatically. Allowing that a buyer could be found at all. In my case, ten years into the mortgage, it means that all the hard work of the past ten years struggling with a mortgage I couldn't afford, was for nothing. I may not get an opportunity to buy again. And in twenty years time, I might kick myself for not sticking it out. However, I would be free of the underlying stress I have faced ever since the day I bought it.

To rent the property means I retain the asset for the future, and get someone else to pay most of the mortgage. However, I make myself liable for maintenance and repairs, things like the washing machine, the management fee, painting, etc. I may have to deal with awkward tenants, and cover the cost when I cannot get a tenant. I also leave myself wide open to pending interest rate rises, property taxes, and God knows what might come down the line from a desperate government.

I have added a poll, if I may, as I would be interested to get an idea what the split is in favour or against. Has anyone else found themselves in this position? Given what little we can foresee of the market, would you recommend selling now and bailing out, or holding on and renting out? Many thanks...

baaaa

I reckon that if you're 10 years into the mortgage already that it's not as crippling as those who may have bought more recently-ie.the rent you may get may always cover the repayments?In which case I'd hang onto it.
If you're a smart landlord who does his work you may not be exposed to as many tenancy problems as you think but who knows what sort of pressures are in the future.
Depends,how much are your repayments and how much is the current potential rent?

Treehouse72

I can't recommend either course, but a couple of thoughts:

Every single amateur landlord you talk to says they seriously underestimated the cost, stress and hassle of it. As a rule of thumb, landlords often take 2 months off the annual rent to allow for void periods and maintenance. I'd say that in the current climate, you might be wise to take 3 months off given void periods can be long. Would 9 months of rental cover the mortgage?

Also, if you are on a variable mortgage your rates are rising already, which might change the maths. Even on a tracker the ECB is bound to raise at some point in the next few years.

BTW, you cannot sell if you are in negative equity. Not sure if that applies to your situation.

ricman

WEll you saved on paying rent the last ten years,its unlikely to be in negative equity if you bought in 2000.You can rent out 1 room, rent a room scheme,no tax on it upto ten k.
if you are in a posh area you can still get a high rent and then rent an apartment for yourself.

iguana

paddyland wrote: »

However, I would be free of the underlying stress I have faced ever since the day I bought it.

There is you answer right there. Why would you want to hang on to something that is stressing you out? I also believe selling would be the sensible option financially too but release from stress is priceless.

Victor

paddyland wrote: »

I have added a poll, if I may, as I would be interested to get an idea what the split is in favour or against.

I wouldn't rely on a poll for something like this. Especially one on the internet.

am i bovvered

impossible to answer without more info...

How much do you think the house would sell for ?
How much is owed ?
What type of property is it, how suitable will it be for your needs into the future ?
How long is left on the mortgage ?
What rent would you expect ?
Do you fully understand all the tax and other costs associated with renting ?