When to sell my flat?

Landlord Discussion
1

I own a 2 bed flat outright but will need to sell it in 2 years 10 months time so that I can repay the mortgage on a house I own.

I need to clear the debt end of July 2027,

My dilemma is either to sell the flat now and put the sale proceeds in a high interest savings account (mortgage is 2.42% and pocket the difference. Then repay the mortgage in July 2027
Or
Put in another tenant in for another year or a bit more and then tell them in advance to leave so that I can be sure of a sale completing successfully.
Would 1 year be enough for a sale to go through? As I know anything can happen, sales fall through etc.

Any thoughts would be welcome.

2

Telling tenants in advance when they have to leave is of no legal or even practical effect. They will leave when theyre ready or when the courts evict them, which currently takes up to a year to achieve.

3

Personally, if you have vacant possession now, I’d sell. Putting a new tenant in is risky.

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4

I think you’ve answered your own question there and, TBH, as we know almost nothing about your property, its value or the local market, it’s unlikely anyone here will be able to answer that question for you. A local estate agent would be more helpful I think.

Personally, if I had a deadline for debt that I absolutely had to clear on the property I call home, I wouldn’t muck around. I’d sell it now and pay off the mortgage as soon as I could rather than wait until 2027.

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5

I take your point. Thanks

6

It’s a gamble if you find the good tenants or the bad ones. Thanks.

7

2 bed modern flat in semi rural area. Little rentable property currently in the area.
The ultimate deadline is 2022, but the 5 year fix ends in July 2027. Will call the building society to see what the default current variable rate is (obviously it will change between now and then). If rates come down all well and good but if they go the other way, ouch it would be painful.

I had wondered about selling, putting the money meantime in a higher interest rate account until the end of the 5 year fix.

8

If you sold, why not use the cash to pay off the mortgage now? The interest you pay on the mortgage will effectively wipe out any interest earned by putting the money in the bank anyway. Is there an early payoff fee that we don’t know about?

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9

Sell, de- risk your options, remember you will have to pay capital gains tax too

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10

Thanks for your reply.
Yes there is approx a £6000 early payment fee

11

Yes I had added that one into my calculations.

12

well only you can tell if that will be worth it because only you know the full financial situation. However, I’d always opt for having a bird in the hand rather than the two in the bush. Knowing when a sale will go through and/or when a tenant will move out are variables I wouldn’t want to factor in.

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