I had a plan....but!?

[gra001]

The plan?........I'm retired and at the beginning of 2012 decided to sell up, bank the proceeds and use the interest to fund the rental of an apartment here in the UK for part of the year and another in Australia for the rest. My daughter lives out there, I love it and I've had enough of this country, however, although the property is too nice not to sell it hasn't happened yet so the plan is on hold. I ruled out letting, I view it as hassle with many implications......(eg. bad tenant, income/capital gains taxes) and see no benefit in owning a property in the current financial climate, at least with the capital, circa 3.5% return is possible (2 year bonds) where property (unless central London) is standing still/going backwards. The income from letting will, I think, give me similar funds to the interest on the sale and enable my escape to Oz, the sun and the Pacific!! So, I can sit it out or seriously consider the letting option. Pros and cons welcome.....Thanks.

Edited by gra001 on Tuesday 25th September 16:23

[Burrow01]

Let it out, the lack of a sale is blocking you from doing what you want to do

All very well getting emotionally attached to a property, but if you would rather be in Australia whats the point - also you are going to sell it anyway and so cannot be that attached to the actual property

Generally people place too high a value on things they already have vs things they might get, i.e you might get a bad tennant, and there are some around certainly, but the majority of tennants are OK, otherwise nobody would let a place out

We left the UK for Holland in the late '90s and rented out a house in London. over six years we did have some hassle, but we had an income from it over the period and in the end the property was worth more.

If you spend more than 6 months out of the UK the rental income could also potentially be tax free (although not if you are a LibDem obviously)

[gra001]

Burrow01 said:

Let it out, the lack of a sale is blocking you from doing what you want to do

All very well getting emotionally attached to a property, but if you would rather be in Australia whats the point - also you are going to sell it anyway and so cannot be that attached to the actual property

Generally people place too high a value on things they already have vs things they might get, i.e you might get a bad tennant, and there are some around certainly, but the majority of tennants are OK, otherwise nobody would let a place out

We left the UK for Holland in the late '90s and rented out a house in London. over six years we did have some hassle, but we had an income from it over the period and in the end the property was worth more.

If you spend more than 6 months out of the UK the rental income could also potentially be tax free (although not if you are a LibDem obviously)

Been here 27 years, not really attached but figured my best opportunity to sell would be whilst it is in A1 shape and letting might jeopardise that. Have to say, when I put it on the market I never considered I would still have it 7 months later, agents have described the market as "diabolical" and "challenging"!!

[2 5HAN]

Do you have enough savings to live your dream without selling? Or do you need some of the sale proceeds to help with bits and pieces I.e luxuries, flights, etc etc

If your not reliant on selling then why not search for local letting agents who offer guaranteed rental, this would then be paid direct to your bank each month and you can live your dream.

The agents who offer a guaranteed rent are more likely to look for a good paying / reliable tenant as they don't want to end up paying you for rent when they haven't recieved it themselves.

Also if as you say your property is in good order then you shouldnt have any unexpected bills coming your way.

When you come back in 6 months you can see what changes if any there have been in the housing market and if you want you can then put it back on the market?

[ringram]

Spend a few weeks elsewhere as well and be a tax exile from both locations

[gra001]

2 5HAN said:

Do you have enough savings to live your dream without selling? Or do you need some of the sale proceeds to help with bits and pieces I.e luxuries, flights, etc etc

If your not reliant on selling then why not search for local letting agents who offer guaranteed rental, this would then be paid direct to your bank each month and you can live your dream.

The agents who offer a guaranteed rent are more likely to look for a good paying / reliable tenant as they don't want to end up paying you for rent when they haven't recieved it themselves.

Also if as you say your property is in good order then you shouldnt have any unexpected bills coming your way.

When you come back in 6 months you can see what changes if any there have been in the housing market and if you want you can then put it back on the market?

Don't have to sell but did decide to have a clean break from property ownership and just bank the proceeds. I can't see an ownership benefit in the current economic climate and things don't look like changing for many years.

[AndySpecD]

Drop the price - 7 months is plenty of time to test the market, also look at whether you are being marketed in the right way - decent agent, presentation, knowledgeable staff etc

Good luck

[Burrow01]

gra001 said:

on't have to sell but did decide to have a clean break from property ownership and just bank the proceeds. I can't see an ownership benefit in the current economic climate and things don't look like changing for many years.

Personally I don't like to change assets if there is no obvious benefit - what is the difference between the interest you would get on the capital if you sold it and what you would get if you let it out?

[Stevemr]

Bear in mind, that over a period of time, say 10 years, the value of the property should have gone up, but also the amount of rent will have gone up.

So property that I rented out at £350 a month 10 years ago is now fetching £450 a month.

Cash everything up and live on the interest and inflation will errode the value of the capitol and the interest payuments

[fid]

Stevemr said:

Bear in mind, that over a period of time, say 10 years, the value of the property should have gone up, but also the amount of rent will have gone up.

So property that I rented out at £350 a month 10 years ago is now fetching £450 a month...

Not in a stagnant market, and with no increase in earnings.

[gra001]

Thanks guys, the property is on at the right price, similar stuff is not shifting either. Two agents are marketing, both very active in the area and it's now up at £845K as I dropped it by £50K when I returned from Oz earlier this year. I'm estimating the income from rental (circa £2500pcm) to be similar to interest earned on circa £800K at 3.5%gross (2 year fixed bond) when tax, fees stripped out....let's say circa £22K per annum. The freedom and hassle free lifestyle of not owning/letting just appeals, however, if I realised that it was a big mistake I would certainly reconsider.

[RJD223]

I think I'd be concerned with having £800k + just sat in a bank in today's economy. Isn't there a maximum of £80k guaranteed in th event of a collapse?

Nice problem to have I guess but I'd be going down the rental route and living off the rental income. At least you can sell later on if you need the money desperately.

[porridge]

gra001 said:

Thanks guys, the property is on at the right price, similar stuff is not shifting either. Two agents are marketing, both very active in the area and it's now up at £845K as I dropped it by £50K when I returned from Oz earlier this year. I'm estimating the income from rental (circa £2500pcm) to be similar to interest earned on circa £800K at 3.5%gross (2 year fixed bond) when tax, fees stripped out....let's say circa £22K per annum. The freedom and hassle free lifestyle of not owning/letting just appeals, however, if I realised that it was a big mistake I would certainly reconsider.

Confused about the bit in bold.

How can it be the right price if no buyer agree with you.

[gra001]

I'd spread the funds to ensure the FSA guarantee. As for the price??......both agents agree price is fine and similar properties are in the same ballpark. However, I take your point that they are not selling and, of course, if I continue to drop (already down by £50K from that first advertised) someone will buy when it becomes too good to refuse but I'm not desperate. I'm running with the price being correct and the economy (lack of confidence etc) being the reason, hopefully a degree of confidence will return soon.

Edited by gra001 on Sunday 30th September 17:10