Hello every one,
Receiving only about 15% of the monthly rent, the rest in the mortgage lender’s pocket and being charged income tax on the full rent, could more experienced landlords tell me why should I keep my buy to let property with about £100,000 equity?
I’m asking myself this question on a daily basis.
With the Renters Reform Bill looming, possible various changes brought in by a new government, after the general election (could rent control be introduced in England?) and a general war on the PRS and Landlords by organizations like Shelter , Generation rent and the mainstream media , I’m seriously thinking of getting out.
What’s your 20-year financial plan? If renting property will help to achieve that plan, keep it. If not, sell up.
Also, you need to have an exit plan. You’ll be left with 100K, if I read you right (although you’ll need to factor in any CGT and fees). What are your plans for using that to generate the same or better ROI?
How does the rent you are receiving compare to the local market rate? Are you able to increase it if you are under rate?
Good question. There are many factors to consider. What is the ROI compared to other forms of investment (anything below 5% is underperforming IMO). How much time and effort this involves and your own value of that. What needs you have now vs future needs. Tax implications for selling now (CGT) as well as tax and legal/regulatory (Renters Reform etc) implications in the future.
I am currently selling one of my rental properties after years of owning it, as that one isn’t economically viable anymore, especially given mortgage rates, high cost of maintenance, tax etc.
In your case, I would probably sell. It’s not an easy decision, but it’s also not surprising that more and more landlords are considering selling up.