Hi folks,

I respect the opinions of people on hear so would welcome yoru comments on this situation.

We have been on the property ladder for nearly 3 years, we bought a house in a rough area of liverpool, and turned it into a pretty smart modern house. We got broken into and all my motorbikes nicked at which point I wanted to move, but we hadnlt finished the work and wanted to make the most of the property before selling.

In the mean time we added about £30k of unsecured loan to the house (dumb I know, buts its done now)

Now we have finished and estimate the house to be worth approx £130k.

Problem is the house market has just gone a bit loopy, admittedly not down our way too much as house prices have never been too daft round our area.


We want to get sold up, and rent a property near to my wifes family, who live in a nice area (we cant aford to buy there)

SO:

We have two options, 1) sell the house the normal way, which will involve being bent over and hammered on the price by opportunistic buyers, paying solicitors, estate agent a few grand and possibley being stuck with a house not selling in a declining market.

2) we sell our house to one of these "guarentee to buy your house" places, sell it cheap but with none of the expence and be sure we are gone before prices drop anymore.

This will leave us with a sizeable loan to carry on paying off, but rent is cheap and we can afford it.

We just want to get out the area before my first reaches school age and comes home wearing a hoody and carrying a molotov cocktail.

I'd welcome your thoughts gents/ladies.

Would renting your house out cover the mortgage and loan nicely?

Brother is moving away abroad soon and has decided to rent his house out. The rent will cover the mortgage comfortably and also leave a bit extra in his pocket too.

I don't think wise to sell at the moment but that's my opinion!

Surely with option 2 you really get hammered on the price. Quick sale but well below market value

have a look at renting it out
much better option if its possible
colin

I would thinkk the way these businesses work is to buy at well below the market value (how else could they make money, as they certainly won't be able to sell above the market value)

The question is, how far below the value?

There isn't a definite answer here as it all depends on the difference in the prices achievable by the different means, and the value you put on the quick sale.

John

dont do option 2 mate of mine only got 60% of market value, id keep it and rent out, you still have your property and when the market starts to rise again in few years maybe look at selling.

chris

I was caught out last time the prices took a tumble. I had a trendy flat in Manchester I'd paid top dollar for and needed to move. I chose to rent it out and ride out the storm.

It worked for me but you have to consider things like insurance, voids, agents fees and all the hidden costs like cleaning after every tenant, redecorating, repairs etc.

So, do your sums is my advice. But if you do decide to sell, don't sell to one of those "we buy your house now" merchants. They want a 20-30% discount. Instead, why not shop around local estate agents. I bet they are clamouring for business right now and will offer fixed price deals. The other costs are minimal (conveyancing etc). You can always advertise the house yourself if you don't want to use an agent.

You are in a bit of a corner. If you bought 3 years ago and have taken an extra £30k loan what equity do you have? In a falling market you may be better waiting a while as differentials due to price drops are bigger on more expensive properies, ie, it's cheaper to upsize/uparea when prices are depressed. Renting out your property(if possible) may allow you to buy/rent elsewhere, do you have enough for another deposit though? The 'guarantee' brigade will probably skin you - beware. You could sell cheap, rent and buy later at the bottom of the market, but could you guarantee getting a loan then?? it's really time to hunker down , none of us really know what will happen next to house prices.

If the area is that rough I would not rent it out.

You could end up with a trashed house with tennants that wont pay and that you cant easily get rid of.

You could end up much worse of than just taking a hit on selling it.

How bad do you want rid of ?

I'd also consider the renting it out option at the moment. Put the mortgage on an interest only basis and personally i'd look to use a reputable letting agency to try and get decent tenants with references if thats a concern. Well worth speaking to a couple of estate agents though with a view to either selling or letting out

I agree with big-wasa be very careful about renting it out. I had a house that was trashed and a flat that I had to evict tthe tenants. Both a costly exercise. I also run a property maintenace company and I am constantly repairing rental houses, and this is a supposedly "nice " seaside town. Also to consider if you sell and don't live there you will get clobbered by capital gains tax. I sold a house privately once by placing an add in the newspaper, and I suppose there must be websites too. Good luck, I feel for you.
Barry

So, there are lots of perfectly valid thoughts on this matter - a subject where there are no rights or wrongs, just consequences. You never truely find out what a tenant is like till they move in....mine have ranged fron fantastic to monstrous. As mentioned above, it costs nothing to advertise your property on some sites (houseladder, homesonsale, etc) so give it a go.

Cheers for all the comments blokes.

We can;t rent it out - the locals in the road are nice, but it really is in scum ville and we'd get all sorts trying to rent it for free once they get the keys!!

TBH a 20% hit probably wouldnt be a problem - yes we will loose out, and no the equity will not cover the loan, but as it aint secured I can carry on paying it off after no longer being a home owner.

We really want out.

Decided to get it on the market for a few weeks at a pretty good price, maybe 10% 15% under what estate agent values it at. See what happens, whilst also getting one of these "we buy your house" companies in to give us a value and then we can make an informed decision.

Riding out the storm aint an option, but I do know people are still looking to move, our house is only about 130k at full market price and has three bedrooms and a garage on a "nice" road, so people who have just had there 2nd or 3rd kid might need to move to a bigger house. Plus with us not being in a chain etc. it makes it an easier option for a buyer.

FINGERS CROSSED!

Thanks for all the comments - its been a great sounding board to see all the options.