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Advice please: To rent, sell or lease a property
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Prof Eman
Posted: 07 December 2012 12:12:34(UTC)
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I have a property in the Midlands, a one bedroom ground floor flat, with a two bedroom maisonette above. It is some distance away from where I live, and as I am retired it is getting more and more difficult to service.
I could rent it out, as two units together (house or maisonette with granny flat under) or two separate units. But this would require servicing the property which I am not keen on. The alternative of having them managed does not appeal to me either, because of the cost implications.
I could lease the property, but am not sure what advantage that gives?
The other alternative is to sell. This could be on a private mortgage basis, effectively exchanging my rental income stream with its pitfalls for a regular mortgage income stream.
Any advice anyone can give, particularly if you have handled such a situation recently, or any other alternatives available?
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Harry Smith on 02/05/2013(UTC)
shaon mukherjee
Posted: 07 December 2012 16:30:46(UTC)
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Its a case of exchanging a lump sum of cash (if you sell) or rental income.

If your looking for an income that beats the rate of inflation then rent it out.

If you do rent it out you will need to declare this to HMRC and pay any tax after expenses have been deducted from rental income.

If you really want to have your cake and eat it and reduce your IHT liability, remortgage the property on a BTL mortgage and release the equity tax free (lump sum). You will also be making an income after paying the mortgage. Your tax bill with HMRC will be lower as you will be deducting mortgage interest and fees.

The easy thing to to do is sell and get your cash. But what are you going to do with the cash as inflation will be eroding its buying power if you leave in your account.

Good Luck

Shaon

feelingoodhomes@gmail.com
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Prof Eman on 07/12/2012(UTC), Guest on 09/12/2012(UTC)
Dennis .
Posted: 07 December 2012 19:11:09(UTC)
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The house next door to me is a 3 bed detached in a nice area owned by a retired guy who lives in the far east. He rents it out to provide his pension through an agency. The last lot of tenants trashed the place and left it in an awful state and despite comments from the neighbours to the agents nothing was done. He now has new tenants in but has spent a few £K sorting it out plus a couple of months period of unoccupancy. Not a situation I would like in my retirment.
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colin wilson on 09/12/2012(UTC)
Prof Eman
Posted: 09 December 2012 14:56:48(UTC)
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Any more views/ideas?
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Caz
Posted: 10 December 2012 10:39:33(UTC)
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I had a similar problem and put the house on the market for 6 months. It didn't sell as the people interested in buying it could not sell their house.

I decided that it needed to be taken off the market and either rented out for 6 months or a year or rented out as a holiday cottage and then put back on the market. I took the hoilday cottage option on the basis that it is easy to keep it well maintained and looking good. This puts me in a good position when I decide to put it back on the market. This has been really successful and in fact it may well stay as a holiday cottage for some time as it is providing a good income.

Good luck

Caz
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Prof Eman on 10/12/2012(UTC)
Prof Eman
Posted: 10 December 2012 18:07:10(UTC)
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Caz and others
http://www.guardian.co.u...me-ownership?CMP=twt_gu
The latest is that sellers and buyers are not happy, buyers cannot sell and sellers cannot buy, a complete lock out. More regulation is suggested as the way forward with building more affordable housing in the future, if ever. Whilst currently both landlords are not happy with the costs and time it takes to get rid of bad tenants and on the tenant side some worry about the duration of tenure.
Caz, helps give some of the reasons why you could not sell, and what the future holds.
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A relatively new landlord
Posted: 11 December 2012 08:15:15(UTC)
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Renting a property out may seem like an easy option for a steady income stream - the reality is that it will involve regular visits and work to maintain the property and keep it rented out.

As you are getting older and the property is a reasonable distance away then ultimately you will have to sell so it is a question of do you rent it first and sell later, or sell now.

I'm not aware of any compelling argument as to why property should outstrip other asset classes in the foreseeable future and hence the logical conclusion must to be tidy up the property and get the best price possible in the current market.

Having sold the property reinvest the proceeds in a balanced portfolio of other assets which can be managed from an armchair rather than by travelling long distances.
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Prof Eman
Posted: 11 December 2012 19:16:38(UTC)
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Dear landlords
Some more info on what is going on in the Private Rented Sector.
There is an inquiry underway by the Communities and local Government committee into the private rented housing sector. Responses to this are required no later than 17 January 2013.
There seems to be a developing conversation concerning the possible introduction of Rent Controls in both of these examinations into the Private Rental Sector (PRS). We in landlord associations must resist any attempt to introduce this type of policy as it would lead to a massive exodus of landlords from the PRS at a time of continued and growing demand for private rented accommodation.

To find out more visit: http://www.parliament.uk...-private-rented-sector/
I share with you some of the latest news I have come across.
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Prof Eman
Posted: 12 December 2012 00:10:01(UTC)
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A relatively new landlord
I have considered what you suggest, armchair investing, but feel it would tie me down to an armchair, not very healthy, and to be effective say in shares, does require a lot of time input. Ideally, I would like to have a reasonable income, but not have to spend too much time or effort on it. Anyone with ideas on those lines?
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Ricky Campbell
Posted: 27 December 2012 06:24:31(UTC)
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Below are the top ten tips only for rent property:

1. Do your research
2. Use the whole rental market
3. Take your time viewing properties
4. Ask the agent about their fees
5. Choose flatmates carefully
6. Haggle over price
7. Make sure you set up direct debits or payments properly
8. Do a full inventory
9. Tell your agent or landlord if there are problems
10. Don't let your deposit go easily.
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Steve123
Posted: 27 December 2012 15:48:57(UTC)
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If I was retired, I would definitely sell the property as I would not want the hassle of finding good tenants and the up-keep of the property - and would not want to pay an agent to do this for me. Equally, I would not want to spend my time monitoring share prices. So I would buy low-cost tracker funds such as those from Vanguard and HSBC. I would buy a diversified range of these funds, concentrating on those with income. For example, the HSBC FTSE All Share Index Inc currently yields 3.84% with a TER fee of only 0.27% pa, and the Vanguard Pacific Ex-Japan Stock Index Inc currently yields 3.74% with TER of 0.3% - both these are on a high at the moment, so I would average into these and other HSBC and Vanguard income funds over a period of time. I would be buying the funds with the intention of holding for the income - and not to chop and change as markets fluctuate. I would also put a percentage into physical gold and silver, such as through Goldmoney.com or the Central Fund of Canada. Hope this helps.
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Guest on 28/12/2012(UTC), Guest on 01/05/2013(UTC)
Deaglan Furey
Posted: 29 January 2013 17:16:43(UTC)
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Joined: 29/01/2013(UTC)
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Hello

Firstly I'm an Estate and Letting agent I co-own HomeXperts London Southbank.

I would suggest looking for a reputable agent in your area - the midlands is a big place so I cannot tell you if there is another HomeXperts near to you, as I would they would discuss how much money would need to be paid, how they could manage it, the upkeep and keeping Tenants in order.

with property for relative ease its a choice between selling the property or having an Agent mange it - http://www.allagents.co.uk/ is a fairly simple way to find good agents in the area however even then you still have individual employees who may or may not do as good a job as described.

once sold cash doesn't gain a lot of interest in banks, and as you have pointed out direct investing or day trading shares takes a lot of input.

I'd only offer that whichever route you take will not be perfect, if you let the property and have an agent manage it they will expect to be paid
if you sell you need to find a suitable bank account to keep the money in to live off the interest or a pension fund to invest in. but they will be more tiresome in dealing with them.

gold has continuously risen in value since 2008, however just like shares they can grow and shrink and keeping on top of that will take dedication, not to the same level as shares but still a lot.

some other ideas could be to invest in a hedge fund, sell and invest where the market is much more buoyant for lettings, find a pension scheme, sell and put money into a high interest saver account, talk to Platinum Property Partners - a franchise but the cost is somewhere around £400K - they have in depth knowledge of rental HMO's to produce high cashflow. very sucessful in HMO investments.

so it comes down to - do you have the time and knowledge to take the cash from the property to invest elsewhere or do you have the patience for letting through an agency?

Kind Regards

Deaglan

deaglan.furey@homexpertsuk.com
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Astino Martin
Posted: 12 February 2013 08:41:56(UTC)
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Joined: 12/02/2013(UTC)
Posts: 1
I have also been in such situation where I was confused that what to do about my property which is quite far from my residence and I cannot visit there regularly. Then someone suggested me to get help of professional and experienced real estate agent and I did so. You just try to handover your problems to your nearest real estate agent who have much experience of selling or renting the properties. They will charge lesser fees in exchange of their services and help you in finding best solution for regarding your properties.
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Prof Eman
Posted: 02 March 2013 16:29:48(UTC)
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Hi all
Having considered all your replies, I did the following.
The property became empty on 6th December, so I decided I would sell.
I decided to move swiftly, and appointed on line estate agents, to advertise the property nationally on the net i.e. MyHouseAdvert.co.uk, on an advertise only basis, cost £69/month.
They have an option of, they take all the calls, and just contact you to arrange a viewing, via sms and email. Perfect arrangement for me, no lengthy phone calls. Adam at MyHouseAdvert was 1st class, and I had several viewings from interested parties.
Also, almost immediately I decided to put the property on auction, local auctioneers held auctions locally and in London. Agreed their fee, reduced it by 1/4% by negotiation.
Searched for and selected a solicitor. A local one turned out to be best value, and preferable because local.
Reason was if it did not go one way it hopefully would go the other, and I did not want an empty property on my hands, with no insurance risks, with costs and no income generation.
Before auction someone made me an offer at the bottom of the guide price, but subsequently did not follow it up, so it went to auction.
At auction it sold above the lower guide price, so I did not lose out.
Before the end of February the sale was complete, purchased by some-one from London.
Moral of the story, it is possible to sell and to sell quickly in the current climate providing you approach things sensibly, and do you homework.
I trust the above is useful to any-one considering a sale.
The only drawback is my CGT, because it was not planned. If you are considering a sale, planning can greatly reduce you CGT liability.
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Prof Eman
Posted: 03 March 2013 22:16:33(UTC)
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Hi again
Just to let you know that one reason for selling was an article I came across on January 4th 2013, not certain which paper it was in, titled-
8m BRITS CAN'T PAY THEIR RENT - Many use overdraft or payday loans.
"HARD-UP Brits are turning to expensive payday loans as they struggle to keep a roof over their heads.
Nearly a million have been forced to take payday loans with sky high interest rates to keep the bailiffs at bay."
Since my property was not in an area likely to attract the best quality of tenants, I decided to let it go.
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Kobe McKlain
Posted: 01 May 2013 11:22:15(UTC)
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Joined: 01/02/2013(UTC)
Posts: 3
If you owe a property and want it to lead you an income the best possibilities is to rent it out. The problem is certainly there for you but you itself have to take out some good way so that at least there’s some income through that. On secondary part you might sell it out and get a lump sum amount for the property and rather invest somewhere else. There are two ways that can be taking but the decision would all be yours and if you are having problem with its renovation then you can surely take the assistance of quick cash loans, as it would be a vital decision.
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Alan Anderson
Posted: 01 May 2013 17:34:13(UTC)
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Here we go again. Scammer/loan shark self-advertising with a link. Where do they invent these names from? Kobe McKlain! You gotta larf.
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steven woodford
Posted: 02 May 2013 07:54:36(UTC)
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Such a cynic Alan! This is great advice - why would someone who has just sold a property not want to take out a 3000% APR loan to rennovate it for the new owners? :)
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Alan Anderson on 02/05/2013(UTC), Guest on 02/05/2013(UTC)
a moss
Posted: 02 May 2013 10:05:42(UTC)
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Prof Eman,

"The only drawback is my CGT, because it was not planned. If you are considering a sale, planning can greatly reduce you CGT liability."

Could you elaborate, please? Thanks.
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Prof Eman
Posted: 02 May 2013 11:25:30(UTC)
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At the simple level
According to my information obtained, CGT on sale is paid on the difference between the sell price and purchase price of the property less any capital expenditure.
One can utilise one's Capital Gain allowance against any gain to offset it further.
One way to reduce the CGT is to have the property in joint names, yours and spouse. Doubles the capital gain offset.
There are other things you can consider, but I suggest you read up about it. For example, Carl Bayes "How to Avoid Property Tax." or similar.
Please let me know how you get on.
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a moss on 12/05/2013(UTC)
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