sold Uuuggghhhh... what to do.... update- mid sale.

[mac11irl]

So, some may remember, last summer swmbo and i bought a new house, and after much debate opted to hold onto our old house and rent it out.

At the time the plan was rent it for a year, and re-evaluate. Well the year rental lease is up in sept, and the tenant is happy to stay.

But....

I was up there recently and met one of our old neighbours who told me theres a couple of dodgy families moved in down the back end of the estate, into houses the council took over. He told me some horror stories..

Today, swmbo met another of old neighbours who told her the same horror stories, and that she and her husband have sold their house just to get out even though they have nowhere new sorted yet... as have the people who lived 2 doors up from us, after 21yrs living there 😞

 

So now... i dont know what to do. We own the house outright, having managed to clear the outstanding mortgage last Feb. We have a tenant who is really nice, and currently happy to stay, but..  for how long if the place is going downhill.. and the value is probably only just back up to what we bought for in 2010.

Ive done a lot of maths, and worked out that if we sell, all other debts getting chopped etc, we could be 200quid per month better off than currently (after tax rental income vs what the mortgage reduction from sale would be)

Seems like a no brainer, but...its still hard to know what to do.

We lived there for 8yrs, and the property is waaaay better condition than when we bought it as an ex rental.

The tenant is really nice and has only been in contact when theres a problem (things break, it happens... ) and has always had the rent paid on the 1st of the month and happy to stay... for now... and i dont want her deciding in 3months time the place has gone deeper down and wants out, but i kinda dont want to have to tell her she's out if we decide to sell...

 

Its going to be a very in depth discussion here over the next couple of days 😞

 

 

Edited 23 November, 2019 by mac11irl
Update title

[moley]

Not sure what the situation is in Ireland compared the UK regarding tenants who cause problems for the rest of those living in the area. Gut feel says sell up and move your cash to somewhere more desirable.

[shyVRS245]

We bought a new build 4 bed home back in Jan 2012 and took the plunge and rented to a young couple with a baby. The rent I charged them was very reasonable and they appreciated that I was very honest with them, didn't ask for a deposit but insisted they pay me on time on the 1st of the month. Like you the odd thing has been replaced (biggest expenses being new patio doors £1,070 and 5 new windows £369) however they have improved the property so that it is nicer now (hard to admit) than when we lived there. I have put the rent up twice in this period however they know from talking to some neighbours they are still getting a good deal. My advice would be as a Landlord for 7.5 years is that while your tenant is happy renew the deal, don't put the price up for at least another 2 years and then only by about £25 per month. When I increased the rent to it's current level I put it in writing that this would for fixed for 5 years which means if they remain there for another 2.5 years the rent has only gone up by 10% in 10 years (very reasonable I think).

[mac11irl]

Its what my logical brain says too.. 

We could easily cash buy an apartment in town and rent that out if we wanted.. i spose it was the sentimental value last year, and its still feels strangely like being home on the occessions ive gone up there since... swmbo was really home sick for about 4 months after we moved out..

[mac11irl]

Note... i had that written and posted before i saw Shy's post - i was more responding to Moley.... instinct is telling me cut the strings now and evaluate a new investment proposition...

 

As a slightly sideways topic follow up, im not entirely sure the exact situation regarding "troublesome neighbours" legally speaking, but i do know that trying to get non-paying tenants out mostly now involves court cases and a whole ****-tonne of stress for landlords, who get little support and always made out as the villain, and ultimately get handed back a property thats been wrecked out of spite..... pretty sure theres regs about council tenants too, but, im also told the new neighbours are of the travelling ethnicity which means they will just argue any complaints as "racism" and the complainants will be tormented.

 

 

 

 

[shyVRS245]

Yeah thought you were responding to Moley but good to remember to treat your tenant like SWMBO and a happy tenant is one most likely to look after your property and pay on time, both very important for low stress levels.

[Ryeman]

Is it possible that an organised mob is driving out others and depressing prices as a scam?.

Doesn’t help you though.

[mac11irl]

No. 

[shyVRS245]

10 hours ago, Ryeman said:

Is it possible that an organised mob is driving out others and depressing prices as a scam?.

Doesn’t help you though.

Is this what happens when the ex-convicts get together down under?

[mac11irl]

Well we ate getting the property valued this week. Tenants been told theres nothing decided, we genuinely have no idea what we are doing. It had always been the plan to re-evaluate after 12months so we are doing that. They  also knows we are obligated to give a minimum 90days notice of any intention to sell, and that we have problem extending that if needs be.

Wait now until its been valued and then make a serious decision...

Edited 4 August, 2019 by mac11irl

[J.R.]

Sell to an investor with a good tenant who has always paid the rent on time and is happy to remain in the property.

[Aspman]

If the there is good demand for rental in the area then it might not matter the condition of the neighborhood.

 

TBH I'd be keen to cash in and run. Maybe the tenants might want to to buy if you can offer first refusal. But then they might be renting because they can't gather a mortgage deposit.

 

JR's suggestion might be a good one if that can work out.

[Tilt]

Just keep on renting it out until your tenant is getting ready to leave and then put it up for sale.......

 

Tell them that this is your plan and ask them to give you as much notice as possible as soon as they decide they may be moving on............and hopefully happy days........Think that's what I would do if in your position.

[mac11irl]

We, we got it valued... list price would be a little over what we paid, with the intention of generating interest and reckons we could make a 15k profit.

So i crunched alot of numbers over the weekend, and i have worked out that over the next 5yrs, selling the property would have us

19k better off in additional savings,

would only have the new mortgage as debt,

would have the 3 major jobs we want to do to new house done,

swmbo would be in a new car. 

 

 

It really seems like a no brainer...

 

 

[mac11irl]

Jaysus.. been a while since i cast my thinking cap into brisky land..

 

Still waiting for the tenant to vacate.. my error really. 

Under the tenancys act, they are entitled to 90 days written termination notice to vacate if less than 12months in the property. 120days if 12months and a day. I verbally informed them, and was told "no need of the formalities blah blah blah.. well be out by end of november, sept if we can." Well... they then got pretty ****ty when we checked in at end of sept as to if they were sorted... end result, 120days notice issued start of Oct which officially gives until 3 feb to vacate... but they are aiming to be out start of november... we wait... and we wait.. and we see what happens in a fortnight..

 

Note to self - dont do landlording again

Note to anyone else thinking of dabbling - do it by the book, it'll bite you in the ass otherwise.

Edited 26 October, 2019 by mac11irl

[shyVRS245]

11 hours ago, mac11irl said:

Jaysus.. been a while since i cast my thinking cap into brisky land..

 

Still waiting for the tenant to vacate.. my error really. 

Under the tenancys act, they are entitled to 90 days written termination notice to vacate if less than 12months in the property. 120days if 12months and a day. I verbally informed them, and was told "no need of the formalities blah blah blah.. well be out by end of november, sept if we can." Well... they then got pretty ****ty when we checked in at end of sept as to if they were sorted... end result, 120days notice issued start of Oct which officially gives until 3 feb to vacate... but they are aiming to be out start of november... we wait... and we wait.. and we see what happens in a fortnight..

 

Note to self - dont do landlording again

Note to anyone else thinking of dabbling - do it by the book, it'll bite you in the ass otherwise.

Should have PM'd me been a Landlord since Feb 2012 and everything needs to be done in writing and dated and signed to cover both sides.

[mac11irl]

Well, swmbo met the agents at the start of the week about the house sale. I popped in after work to make a to do list for dressing up for viewings, little minor repairs etc. I left at about 445pm

Got a text from a neighbour half n hr ago... for sale sign is up!

Its not feckin ready!

[Chris]

10 hours ago, mac11irl said:

Well, swmbo met the agents at the start of the week about the house sale. I popped in after work to make a to do list for dressing up for viewings, little minor repairs etc. I left at about 445pm

Got a text from a neighbour half n hr ago... for sale sign is up!

Its not feckin ready!

So I take it the tenants left without much issue and didn't cause untold destruction before leaving. 

 

The agents want your money, sooner they can get it sold quicker they get their £££. 

[mac11irl]

Thankfully the tenants left with just some rent arrears they decided was us keeping the deposit....

Nothing serious damage wise, couple of door hooks and one room where the door handle has hopped off the wall a few times..

most of post notice of termination was verbal abuse.

 

[Chris]

23 minutes ago, mac11irl said:

Thankfully the tenants left with just some rent arrears they decided was us keeping the deposit....

Nothing serious damage wise, couple of door hooks and one room where the door handle has hopped off the wall a few times..

most of post notice of termination was verbal abuse.

 

Sounds like you got lucky. I've had no experience but seen the stuff on TV where landlords walk into houses with all the copper wire missing, power supplies tampered with etc. Just don't know why people are like this, your living in someone else's home and it's not like you are some corporate entity..you are a human being just trying to make an income. 

 

Best off out of it by all accounts! 

[mac11irl]

The entire private landlord rental "industry" is a crock to be honest.

For it to be worth while for us to have kept it on longer - allowing for tax and costs etc - would have meant charging at least 50% more in rent.

Unlike what some people think.... the income tax on a property is full income tax after your deductions. So repairs/insurance etc come off the rental income and then tax on the rest. We have a rent a room scheme too - it very much applies ONLY to a room in your primary residence (ie the spare room in your home) and claiming that once revenue find out means a massive tax bill, plus interest and penalties..

We were lucky enough to able to clear the mortgage balance on that place in feb of this year... only part of interest on mortgage is a deductable expense, not the actual mortgage payment.

 

Its really really not worth it..

[VRS_White_Hatch]

I look at it from this perspective. If I had 75k in the bank I'd be doing well to get £1500 a year - about £120 per month. A terraced house purchased (50k) and renovated (9k)  for less than that paid £450 per month for the first 5 years, now pays £475. 

 

Up until last tenant it cost next to nothing in repairs, its going to cost me about £1000 getting it really nice again this time. Tenants fitted 2 new carpets and 2 sets of new curtains, but damaged doors and kitchen flooring and marked every wall. Deposit £950 fully retained. Rent owed £475, so unless I recover money I'm short by about £525, but the property will be better than it was.

 

I completely agree with advice re doing everything in writing, the only time I've been caught out was accepting notice from 1 tenant when they were behind on the rent so I just let it run, then 2nd tenant said they weren't leaving and I had to serve notice and let the clock start running again -  2 months notice in England. 

 

Purchase was redundancy money well spent IMO, what else would I do with it?

 

Like George best said, "I spent a lot of money on booze, birds and fast cars. The rest I just squandered."

 

[mac11irl]

See its a number game to suit. 

By selling the old place now, we can afford to -

Reduce our new mortgage by an amount greater than the post tax rent income

Renovate the main bathroom

Repair the undermined boundary wall along with our neighbour.

Eliminate another outstanding debt

Replace swmbo' s car

Install a stove in sitting room

 

Increase monthly savings to then do solar PV/hot water in 12months time.

 

Increase monthly savings to have a nice holiday slush fund every year.

 

Non of the above are doable currently without increasing debt (ie loans) which increases outgoings and thus reduces saving capacity..

[mac11irl]

I think if i had 10k now and wanted to make it grow id look into a case or 2 of high end Beaujolais Nouveau and let it sit for a about 5 yrs then sell it for (apparently) a massive profit...

[shyVRS245]

18 minutes ago, mac11irl said:

I think if i had 10k now and wanted to make it grow id look into a case or 2 of high end Beaujolais Nouveau and let it sit for a about 5 yrs then sell it for (apparently) a massive profit...

At least you wouldn't be tempted to drink it as when it is fresh/new it is vile stuff.