Re: Flat, sell or convert to buy to let?

In message <HP6dnWlxGJapzv_enZ2dnUVZ8qednZ2d@xxxxxxxxxxxxxxxx>, Doug Ramage <ramage@xxxxxxxxxxxxxxxxxx> writes 

"Richard Faulkner" <richard@xxxxxxxxxxxxxxxxxx> wrote in message
news:WduOvBGzXjYDFwkj@xxxxxxxxxxxxxxxxxxxxxxx

In message <-8KdnRPa_u9Es__enZ2dnUVZ8qCdnZ2d@xxxxxxxxxxxxxxxx>, Doug
Ramage <ramage@xxxxxxxxxxxxxxxxxx> writes


"Richard Faulkner" <richard@xxxxxxxxxxxxxxxxxx> wrote in message
news:7d3F$7BXEiYDFwR4@xxxxxxxxxxxxxxxxxxxxxxx

In message <1130499098.753347.96850@xxxxxxxxxxxxxxxxxxxxxxxxxxxx>,
wonderlander@xxxxxxxxx writes

Does anyone have any suggestions on what I should do, sell, convert to
buy
to let, rent it for 6 months whilst still trying to sell it, sell to the
cash buyer people?


If you want to sell, it seems that it is worth more than £130K, and less
than £162K, so why not try £150K or so. You probably wont have it
completed for Xmas, but it could be on its way.

If you want to rent it - dont try and sell it at the same time. The
tenants wont like it, and would probably hinder it, and buyers wanting
to
live there will be wary of buying a tenanted house.

My advice - dont be without an interest in the property market. Rent it
out, perhaps at a bit less than market rent, (keeps the tenants happy
and
wanting to look after it and stay there). It probably doesnt matter
whether you convert the loan to a buy to let, but you may wish to.

Dont sell to the cash buyer people - all they will do is put it back on
the market at a higher price, which could have been yours.


--
Richard Faulkner


I would not rent it out, as you may have problems covering your expenses
if
interest rates increase or tenants are scarce.

IMHO, UK property values are likely to decrease than increase, especially
in
the short term.

Have you looked at the House Price Crash website?

http://www.housepricecrash.co.uk/forum/index.php?showforum=22 

This bunch were spouting this logic when it was definitely a good time to
buy a house, so people who went along with them at the time have lost out.
There was bound to come a time when they were right, and now is that time.
But there will also come a time when they are wrong again, and then a time
when they are right again............

If I was of a mind, I could set up www.housepriceboom.co.uk and start
spouting that the boom is coming, and we should all be on the property
ladder...... and I would be wrong for a few years, then I would be
right....

I agree that my advice flys in the face of current perceived logic but:

In 1984, I bought a house for £21,000 and sold it in 1987 for £23,500,
using the money, (£2000), as my investment in our estate agency. In 1988,
the house I sold was worth £40,000+, and I had to pay that to get back on
the housing ladder. In 1990, I bought a house for £112,000, by 1994, I
couldnt afford to live in it and rented it out. I nearly sold it in 1996
for £105,000, to help open another office, but I didnt. In 1999, I sold it
for £170,000 and, with the money released, I have built a portfolio of 17
properties which have enabled me to retire at 45.

Somewhere around 1999, I promised myself that I would never be without a
property again, and that will continue to be my advice to anybody. It's
easy to sell and spend the money, but then you miss the opportunities
which are bound to come again.

The logic which drives people to get on the ladder when prices are rising,
and to get off it when they are falling, is short term boom and bust.

My logic is long term investment where the booms and busts smooth
themselves out.

--
Richard Faulkner

The BoE should have pricked the Housing Bubble a couple of years ago

I thought they had pricked it before the rate increase in August 2004, (?), and the extra .25% killed it dead. They have now removed that .25%. I firmly believe the market was slowing at the time.

 - it
is likely that the ensuing larger bubble will be even more painful when it
does deflate.


Probably.

Richard - as you say, you are in it for the longer term and should be better
placed to ride out the down-turns, unless you are over-geared.

Agreed. However, I wasnt talking about my current position, rather how I reached it.

A lot of
people who have re-mortgaged around the 80%+ level to invest further in
property might find they have a CGT bill greater than the equity in their
property(s).

Yes, but in the OP's case, the rent v mortgage seemed OK, and I still think it is better to suffer a little to retain an interest, rather than give it away in panic. In fact, the OP wouldnt be suffering unless rents fell but, if owning becomes unpopular, the rental market should hold up.

--
Richard Faulkner
.

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