selling up and renting? anyone done it?

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NooNoo59

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Just thinking, bored on a saturday and messing about on the internet.
If we sold our house and rented somewhere with land would we be better off?
 
I would imagine it would depend what you were selling up. Generally if you were to rent a house the rent you would be paying would be more than if you were paying the mortgage on it. So in that case not necessarily. However if you were selling and downsizing then yes you'd free up the equity and could pay a smaller amount of rent than your mortgage but then you might as well just sell the big house and downsize and buy a smaller one.

I was watching generation rent the other night, there was a couple on there who were paying £900pcm in rent for a house worth under£400,000, now if they were to pay the asme every month off a mortgage they could maintain a property worth £600,000, with that in mind I'd say your better off staying on the property ladder
 
Not a good idea IMO. You need to take a really long-term view about this. Not only would you probably have been able to buy the property twice over but you would still have to pay rent long after any mortgage would have been paid off.
 
LeannePip said:
I would imagine it would depend what you were selling up. Generally if you were to rent a house the rent you would be paying would be more than if you were paying the mortgage on it. So in that case not necessarily. However if you were selling and downsizing then yes you'd free up the equity and could pay a smaller amount of rent than your mortgage but then you might as well just sell the big house and downsize and buy a smaller one.

I was watching generation rent the other night, there was a couple on there who were paying £900pcm in rent for a house worth under£400,000, now if they were to pay the asme every month off a mortgage they could maintain a property worth £600,000, with that in mind I'd say your better off staying on the property ladder
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I have to disagree with this.
It depends in what area of the country you are in. Rents in London and the South east are lower than what you would pay if you got a mortgage for the same property.
We own a house in London and rent a house in the SE. Both houses are appreciating in value down to their location. The one in the SE we have a very very good rent. If we were to buy this property we would be paying double on the mortgage than what we pay for rent... even with the appreciation of the property we are still better off renting it.

So it really does depend and it is something you would need to do research into.
 
I've been sorely tempted. I could rent a better place with land for less than I pay for my two bed terrace and rented land

But it's hard to get on the housing ladder and even harder to get back on if you step off it

One option may be that if your house is in a desirable area and you could rent it out and easily cover the mortgage would to do that then rent your next place But it would need the pro and con points closely considered as you'd need to alter your mortgage and insurance
 
long term no renting is dead money. You also lose a great deal of security and that is worth its weight in gold. Alternative options are selling on and buying something else.
 
Star_Chaser said:
long term no renting is dead money. You also lose a great deal of security and that is worth its weight in gold. Alternative options are selling on and buying something else.
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Only in an area where house prices are going up and it depends on the size of your mortgage and it depends on what stamp duty bracket you fall into.

Generally I agree owning a house is better security IF it makes financial sense.
 
Firewell said:
Only in an area where house prices are going up and it depends on the size of your mortgage and it depends on what stamp duty bracket you fall into.

Generally I agree owning a house is better security IF it makes financial sense.
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I agree which is why I gave the alternative which may be a better solution ;)
 
LeannePip said:
Who were paying £900pcm in rent for a house worth under£400,000, now if they were to pay the asme every month off a mortgage they could maintain a property worth £600,000, with that in mind I'd say your better off staying on the property ladder
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Not got time to check those figures but I've had a £1000 mortgage, with decent equity and the house was worth nowhere near that amount.

I would leave your equity in a house, either the one you have, or a buy to let that will give better yields, if you're going to rent. I rent and I worry about what happens when I retire. Otherwise it's cheaper, it really is. When something goes wrong, we phone the landlady. We have a LOT more house for our money renting, compared to a 100% mortgage (comparing it to, say, a 50% mortgage is silly, because you've lost the income you'd have on the 50% if it was invested elsewhere) for the same monthly amount.
 
Rather than sell up I have rented out my city house and rent a country pad with land and stables, the rent I get helps pay for the rent I'm paying and I still have equity and horse ownership. It may depend on your current house and cost if mortgage as to whether it is worth it that way and u will need to pay tax on the part of the rent that is profit, worth a look (not read all posts so apologies if this has already been discussed!)
 
LeannePip said:
I would imagine it would depend what you were selling up. Generally if you were to rent a house the rent you would be paying would be more than if you were paying the mortgage on it. So in that case not necessarily. However if you were selling and downsizing then yes you'd free up the equity and could pay a smaller amount of rent than your mortgage but then you might as well just sell the big house and downsize and buy a smaller one.

I was watching generation rent the other night, there was a couple on there who were paying £900pcm in rent for a house worth under£400,000, now if they were to pay the asme every month off a mortgage they could maintain a property worth £600,000, with that in mind I'd say your better off staying on the property ladder
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Sorry but I disagree with you.

Our £200,000 mortgage on our old house cost us £1,100 per month and it was only worth £250,000
The house we rent is worth £330,000 and costs us £1,000 per month in rent.
The house we previously rented was worth £650,000 and we paid £1,450 per month. A mortgage would cost us 3 x our monthly rental.
A mortgage of £400,000 depending on deposit etc (at the moment) would cost around £2,600 per month.
I would love to know how you think £900 a month could pay a mortage on a house worth £600,000
 
Always Henesy said:
Sorry but I disagree with you.

Our £200,000 mortgage on our old house cost us £1,100 per month and it was only worth £250,000
The house we rent is worth £330,000 and costs us £1,000 per month in rent.
The house we previously rented was worth £650,000 and we paid £1,450 per month. A mortgage would cost us 3 x our monthly rental.
A mortgage of £400,000 depending on deposit etc (at the moment) would cost around £2,600 per month.
I would love to know how you think £900 a month could pay a mortage on a house worth £600,000
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Exactly. You have to take any equity out of it to make the sums equal, I suspect the calculation you quoted obviously includes a large % of equity.
 
No. Will never ever rent again. Only ever on my own land after two bad experiences with landlords.one of which we are currently still going through courts for a substantial amount of money owed.

However that was land and property.

Now owning both (not together) I'd never rent house again as just throwing money and not seeing anything long term. I'd rent land but never without a back up plan.
 
sbloom said:
Exactly. You have to take any equity out of it to make the sums equal, I suspect the calculation you quoted obviously includes a large % of equity.
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Not necessarily - it depends on how you think about the mortgage repayments, I think about mine as two halves the first part is the interest only which is what I would compare to rent, the second part is the capital element - which I think is like savings as it's paying down the loan so I have a house to sell for my retirement at the end of it.

Rent is just 'interest' I have nothing to show for it after the end of the month. If I was renting I'd still like to be saving something for when I'm older.

Interest on a £400/600k mortgage could easily be close to the figures quoted.
 
Always henesy. I know it's not quite the same and not going to give exact amounts but my mortgage for a 3 bed house is less than half what I would be paying in renting a studio flat for in the same area. The studio flats are a 3rd of price of my house (looked at this first before deciding to spend a bit more).
I couldn't afford to have rented a decent 2 bed flat but can afford my own house which is ideal for me.
 
Could you be flexible in the area you live in? We swapped £ for £ a 2 1/2 bed ugly 1970's semi on an estate in Berkshire for a detached 3 double bed with 12 acres in Lincolnshire. It was a gamble as we have no family (and at the time no friends either) here but luckily both OH and I had jobs we could move location for.

We are definitely better off - although I did go from 1 horse to 5 (at one point!), I could keep 5 at home for the full livery cost of 1 in Berks!
 
PandorasJar said:
Always henesy. I know it's not quite the same and not going to give exact amounts but my mortgage for a 3 bed house is less than half what I would be paying in renting a studio flat for in the same area. The studio flats are a 3rd of price of my house (looked at this first before deciding to spend a bit more).
I couldn't afford to have rented a decent 2 bed flat but can afford my own house which is ideal for me.
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That's fab! :D In your case it has worked out really well.
There are so many factors to be taken into account such as area of the country, income, availability, equity, savings etc etc that this is not clear cut at all.
In my case (East Sussex) - I can get a lot more house if I rent than if we buy.
We have an income of over £100K a year - but we can't afford to buy the house of our dreams just yet...as we need to save around £200K for a deposit if the mortgage figures are to add up.
We want to buy our home for life as our next purchase as I am approaching 40 and my husband is 42. At the rate we are saving - our 2 youngest children will probably have left home before we can afford it :D
 
Absolutely agree there are lots of factors. I was very lucky that I got a good deal too on house and mortgage.
I also don't intend to spend my life there so can afford to buy something that isn't perfect (i am used to middle of no where... not town!) but will be very easy to resell due to location and size and easy to value add. I'm not great at saving so it's the ideal solution for me to use the house effectively as a savings account (also do the same with utilities and cash out when needed!) And OH will probably build on it for value towards our future house. If I wanted my dream house now then what you're doing would make sense if I could rent for less than buying. Rental around here is extortionate due to being a good place to be to commute into London but be in the countryside towns though so I'd probably have to move slightly further away from work and then I'd have to toss up petrol daily and savings on rent... Its never straight forward and mostly I just decide what I'm prepared to pay... more in long run less in short as less in long run would involve being restrained with not spending money elsewhere :D
 
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