Advice on selling or keeping the house in london?
I have purchased a house in london in January 2007 in dagenham, for some reasons i can’t shift into it, i have 2 options
1. to sell it at small profit(as currently it is well nice and tidy to look at)
2. to rent it out
if i rent it out , i will be getting some700 net rent and my mortage repayment will be 800. rent is less here as it is a minority area with more of dss tenants
moreover i am not sure whether i will stay in UK for long term may be i will stay for another 2 years and go back to my country permanently
is it worth that i rent out the property and suppose i have to sell it after 2 years there can be some appreciation and that will be my profit
or should i dispose it now thinking the house prices can go down or if I keep the tenants ,they may trash the house and I will have to spend money on maintenance.
Even if I ask the agent to manage the letting , I will get less money from rent. I have to pay some 21 pounds for insurance then general maintenance as house is quite old a
It’s your choice, i wouldnt keep the house any longer than the end of 2007 though, as many professionals are predicting a house fall by the end of the year and a decrease in house price between 20-30% in the next 4 to 5 years bringing the average cost of a house to about £100,000 in the UK.
if your house is not in a prime area, it is difficult to see that it will appreciate by much.
Also, if you rent it out, you run the risk of the tenants trashing it, causing you more loss. Additionally, you have negative cash flow so you aren’t even compensated for the risk you are taking
Up to you what you decide.
I have a similar situation except my rent will cover the mortgage, and I’m renting to hopefully good quality corporate tenants so the credit risk is lower.
If my cashflow was negative like your situation, I wouldn’t even consider it.
Who knows where the housing market will be in the future. I’ve been waiting for a crash for ages so I can buy something cheap, but it’s not happened!!
Living in the London area, you have the advantage of your house increasing in value more than the rest of us. On this basis alone, I would keep hold of the house.
You said that the rent you would get will not cover the mortgage payments. Simply convert your mortgage to an interest only option – this will significantly reduce your monthly mortgage payments, therefore making the rental of it profitable.