Decisions to make.

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Decisions to make.

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gardening-girl

Joined: 25 Feb 2009
Posts: 6024
Location: Somerset.

Posted: Tue Jul 19, 11 12:17 pm Post subject: Decisions to make.
Bums,the tenants in our cottage have given two months notice.The extra dosh every month is very usefull. As we have a house with our job,we are in two minds to sell or not.We have no mortgage. BTL is worried that,if we keep the house and it needs any work,it will use up our savings. But,if we sell,where to put the money?nothing is good for interest at the mo.

Pel

Joined: 29 Mar 2008
Posts: 2366
Location: Sennybridge

Posted: Tue Jul 19, 11 12:26 pm Post subject:
Could you not do it as a holiday cottage? Or is it quite far from you?

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Jul 19, 11 12:30 pm Post subject:

Stocks and shares can go up and down.
Banks can fold and you could lose everything except 50k.
There's no interest on cash savings right now.
ISAs pay better, but only in relatively small amounts.
Property is priced low now, compared to a few years ago. It may fall in value, but we still have more demand than supply.
Property is functional. You cannot shelter from the rain in a stock, in a barrel of oil, or a crock of gold.

Anything you spend on the house can be offset against the tax you pay on any rent that comes in.

There are many other factors, but property is a good investment if you're happy not to make a screaming profit on it.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Jul 19, 11 12:33 pm Post subject:

Nick wrote:

Banks can fold and you could lose everything except 50k.
T.

It's �85k per account now* so it would be easy to protect it. I agree with the rest of your post though.

*Full details here: https://www.moneysavingexpert.com/savings/safe-savings

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Tue Jul 19, 11 12:39 pm Post subject:
Luckily, I'm still quite a long way* under the �50k limit, so I hadn't had to double check. * Roundabout �48,500 below.

yummersetter

Joined: 26 Jan 2008
Posts: 3241
Location: Somerset

Posted: Tue Jul 19, 11 1:17 pm Post subject:

Would you ever want to live there if there was a change of circumstance?

If so, you could relet it, there's no shortage of tenants round here, and do a standing order that takes off a proportion of the rent into a repairs account. You wouldn't have the worry of where you'd live if your work was under threat, but keep the letting on a short term contract

If not, and if you think it would sell fairly quickly, and gambling on house prices not rising dramatically, you could sell it and if your work situation changes you would have the advantage of being a cash buyer on another place. The chance you're taking is of doing it up to sell out of your own pocket and it sitting unlet and unsold for *** months.

gardening-girl

Joined: 25 Feb 2009
Posts: 6024
Location: Somerset.

Posted: Tue Jul 19, 11 1:45 pm Post subject:
Not a house I would want to live in.Bought as an easy to let property.

yummersetter

Joined: 26 Jan 2008
Posts: 3241
Location: Somerset

Posted: Tue Jul 19, 11 3:40 pm Post subject:

Have you calculated how much you'd get monthly in interest as against the rent? I guess some money website will give you figures to work with, or there's NS&I for safety.
It's the limbo time when its not rented and not sold that really hurts, but you can change your mind and relet it if its not shifting. And in a slow market, it's a chore keeping the house and garden clean and fresh over months so that its always ready for viewing at a moments notice.

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