Sell up and rent?
30 June 2004, 10:17 PM
#1
Scooby Regular
Thread Starter
Join Date: Oct 2002
Location: Mostly at Castle Combe;)
Posts: 1,661
Likes: 0
Received 0 Likes
on
0 Posts
Sell up and rent?
What do any of you suggest?
I would proberly get three times the amount I owe
So it has been suggested to me that I do this
what are the implications?
ie:- will I have to pay tax on what I gain?
I would proberly get three times the amount I owe
So it has been suggested to me that I do this
what are the implications?
ie:- will I have to pay tax on what I gain?
30 June 2004, 10:19 PM
#2
Scooby Regular
Join Date: Nov 2001
Posts: 2,043
Likes: 0
Received 0 Likes
on
0 Posts
ive just done it and am glad (so far!)
on completion of sale, i will have a nice wad of cash to squander.
no cgt if its your main residence you're selling (it sounds like you are).
imho a good time to get out. but people have been saying that for years...
on completion of sale, i will have a nice wad of cash to squander.
no cgt if its your main residence you're selling (it sounds like you are).
imho a good time to get out. but people have been saying that for years...
30 June 2004, 10:22 PM
#3
Scooby Regular
Join Date: Dec 2002
Location: Logged Out
Posts: 10,221
Likes: 0
Received 0 Likes
on
0 Posts
If you've been living there as your primary residence then no CGT is due, the profit is all yours.
Clearing the mortgage totally might not be a good thing though as you effectively close your credit line on that property.
Clearing the mortgage totally might not be a good thing though as you effectively close your credit line on that property.
30 June 2004, 10:26 PM
#4
Scooby Regular
Thread Starter
Join Date: Oct 2002
Location: Mostly at Castle Combe;)
Posts: 1,661
Likes: 0
Received 0 Likes
on
0 Posts
I don't want to squander but would like to have a few nice things
but at the end of the day would/is it worth getting out for a while? and maybe hope that I could rejoin later?
but at the end of the day would/is it worth getting out for a while? and maybe hope that I could rejoin later?
30 June 2004, 10:27 PM
#5
Scooby Regular
Thread Starter
Join Date: Oct 2002
Location: Mostly at Castle Combe;)
Posts: 1,661
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Spoon
If you've been living there as your primary residence then no CGT is due, the profit is all yours.
Clearing the mortgage totally might not be a good thing though as you effectively close your credit line on that property.
Clearing the mortgage totally might not be a good thing though as you effectively close your credit line on that property.
30 June 2004, 10:28 PM
#6
Scooby Regular
Join Date: Nov 2001
Posts: 2,043
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by beamer
but at the end of the day would/is it worth getting out for a while? and maybe hope that I could rejoin later?
but if i really knew all the answers to that question.. i wouldnt be posting here.. id be on a beach somewhere spending my millions. same with anyone who answers this question... it's only their opinion.
i plan to rejoin later... and hopefully i'll be lucky and prices could fall. on the other hand, they could rise and i could be priced out totally. its a gamble.
more people than ever are saying now is a good time to get out. but people have been saying it for a LONG time now.
Trending Topics
30 June 2004, 10:31 PM
#9
Scooby Senior
Join Date: Feb 2000
Posts: 8,204
Likes: 0
Received 0 Likes
on
0 Posts
There's no guarantee that house prices will drop enough for you to be able to buy another place like you've just sold. House prices will go down, and then because everyone has waited for it, they'll shoot back up again due to the demand.
The long and short of it is, is that we've not enough houses to meet the demand. Until that's resolved we'll always gets dips followed by upward surges. The thing is, the dips are still higher than the previous ones so the long term trend is upwards.
The long and short of it is, is that we've not enough houses to meet the demand. Until that's resolved we'll always gets dips followed by upward surges. The thing is, the dips are still higher than the previous ones so the long term trend is upwards.
30 June 2004, 10:38 PM
#10
Scooby Regular
Join Date: Dec 2002
Location: Logged Out
Posts: 10,221
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by beamer
so keep a bit of the mortgage ongoing?
I was on another line of thought then.
30 June 2004, 10:41 PM
#11
Scooby Regular
Thread Starter
Join Date: Oct 2002
Location: Mostly at Castle Combe;)
Posts: 1,661
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Spoon
Sorry, ignore that, if you are selling then you are selling which means the end of that property anyway.
I was on another line of thought then.
I was on another line of thought then.
I'm not self employed if that makes a difference?
30 June 2004, 10:51 PM
#12
Scooby Regular
Join Date: Dec 2002
Location: Logged Out
Posts: 10,221
Likes: 0
Received 0 Likes
on
0 Posts
No, nothing like that.
I had been talking to a lady today who had the money to clear her mortgage some months ago but I'd told her not to wipe it completely so she could borrow money at a later date if needed.
Ironically she has now to fund another property.
For some strange reason I had you still living there but with wads of cash (similar to the story above).
Instead for you to be cash rich you have to sell the property so please forgive my mistake otherwise I'll set Tel onto you because he's lurking about somewhere in his rubber wear.
I had been talking to a lady today who had the money to clear her mortgage some months ago but I'd told her not to wipe it completely so she could borrow money at a later date if needed.
Ironically she has now to fund another property.
For some strange reason I had you still living there but with wads of cash (similar to the story above).
Instead for you to be cash rich you have to sell the property so please forgive my mistake otherwise I'll set Tel onto you because he's lurking about somewhere in his rubber wear.
30 June 2004, 11:35 PM
#14
Scooby Regular
Join Date: Jan 1999
Posts: 5,786
Likes: 0
Received 0 Likes
on
0 Posts
I don't think selling & renting is a great idea.
You have costs involved in the sale - legal costs, and estate agent/solicitors fees.
If renting, you're probably going to be spending, say, £500/month on rent. Difficult to know what type of property you'd want to rent, but that's £6k/year on rent, maybe less, maybe more.
Plus, when you come to purchase again, you'll need to splash out on legal fees, estate agent/solicitor fees again. Oh, and pay stamp duty on the place you buy.
So, if you were looking to buy again in 2 years, even if prices fell, they'd need to fall by > ( (rent * 24) + fees) or £15k in my example for you to be coming into profit....
Depends on what your property is worth. If £300k+, and you are happy living in a small flat for £500/month, then fine. Values would need to come down by >5% for you to be in profit. Oh, and that's before also thinking that with rental, you're pi$hing your £500/month down the drain, wheras another 2 years of mortgage payments would reduce your current borrowings...
As it is, given interest rates are comparitively low, and there is a shortage of housing, we may just see a flattening out of values, rather than a decline.
Also, are you in a hotspot or not? If so, decline may come....if not, flattening out of values is more likely.....
To me, it's a big gamble to sell & then rent. You're climbing off the ladder, and if values do stagnate, or even increase further, it'll be even harder to get back on.
You have costs involved in the sale - legal costs, and estate agent/solicitors fees.
If renting, you're probably going to be spending, say, £500/month on rent. Difficult to know what type of property you'd want to rent, but that's £6k/year on rent, maybe less, maybe more.
Plus, when you come to purchase again, you'll need to splash out on legal fees, estate agent/solicitor fees again. Oh, and pay stamp duty on the place you buy.
So, if you were looking to buy again in 2 years, even if prices fell, they'd need to fall by > ( (rent * 24) + fees) or £15k in my example for you to be coming into profit....
Depends on what your property is worth. If £300k+, and you are happy living in a small flat for £500/month, then fine. Values would need to come down by >5% for you to be in profit. Oh, and that's before also thinking that with rental, you're pi$hing your £500/month down the drain, wheras another 2 years of mortgage payments would reduce your current borrowings...
As it is, given interest rates are comparitively low, and there is a shortage of housing, we may just see a flattening out of values, rather than a decline.
Also, are you in a hotspot or not? If so, decline may come....if not, flattening out of values is more likely.....
To me, it's a big gamble to sell & then rent. You're climbing off the ladder, and if values do stagnate, or even increase further, it'll be even harder to get back on.
30 June 2004, 11:45 PM
#17
Scooby Regular
Join Date: Jan 1999
Posts: 5,786
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by fast bloke
imlach - sound advice, but what estate agent charges you for a purchase 
In Scotland, don't generally use an estate agent, solicitor does it all, and so have solicitor fees when buying....wasn't sure if there was a estate agent charge using the English system of buying...
30 June 2004, 11:58 PM
#19
Scooby Regular
Join Date: Jun 2004
Posts: 2,862
Likes: 0
Received 0 Likes
on
0 Posts
Nope only for selling. Although you could have added surveyors fees along with stamp duty, 1% of the purchase price from £60000 to £250000. 3% from purchases £250000-£500000 and 4% for anything over. (on the whole amount)
Also searches, mortgage arangement fees, and a few other little bits and bobs.
If i were Beamer i wouldn't do it, can't see the prices dropping or if they do it will only be by a very small amount IMHO.
Also searches, mortgage arangement fees, and a few other little bits and bobs.
If i were Beamer i wouldn't do it, can't see the prices dropping or if they do it will only be by a very small amount IMHO.
01 July 2004, 12:00 AM
#20
Scooby Regular
Join Date: Jun 2004
Posts: 2,862
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by fast bloke
They generally don't, but I'm sure if they thought of it they would love to
01 July 2004, 12:05 AM
#21
Scooby Regular
Join Date: Mar 2001
Posts: 628
Likes: 0
Received 0 Likes
on
0 Posts
If you look into this further, it is extremely likely you will be able to afford a Lamborghini and still have a hundred grand or so left in the back pocket. Well worth it IMHO. I bought my house in the south east for £95,000 and it is now worth £240,000. Hoping to get a few years old Diablo and afford to run it with the left over dosh. Very nice it you don't have kids and **** to put through university etc. My monthly salary will easily cover renting a place - just need to find one in an OKish area with secure garage.
01 July 2004, 12:06 AM
#22
Scooby Regular
Join Date: Nov 2000
Posts: 26,619
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by chris's scooby
Nope only for selling. Although you could have added surveyors fees along with stamp duty, 1% of the purchase price from £60000 to £250000. 3% from purchases £250000-£500000 and 4% for anything over. (on the whole amount)
erm - that is stamp duty - not survey fees
01 July 2004, 12:08 AM
#23
Scooby Regular
Join Date: Jul 2002
Location: JFK/LHR
Posts: 3,571
Likes: 0
Received 0 Likes
on
0 Posts
For example say you owe 100k- and you can now sell for 300k.
thats a lot of profit for not much effort- you then take the 200 profit and put it in the bank.
Lets say a decent place costs 500 odd a month (can rent a decent house for that round this way).
Theoretically- you have enough in the bank to rent for 33 ish years- thats purely from cash in the bank, and using none of your income on rent/mortgage (which i presume you do currently).
Regardless of whether the market falls or rises, you have a large wad in the bank to play with- or as i would do just leave it leave there for security.
It would be far more appealing to me personally to have that lump in the bank and very few cash flow worries, than staying on the ladder and worrying about rising/falling prices and rates. If the time comes and prices fall, then buy somewhere cheaply and start again, still leaving a smaller lump in the bank.
That my personal perspective- flame me if you feel the need
thats a lot of profit for not much effort- you then take the 200 profit and put it in the bank.
Lets say a decent place costs 500 odd a month (can rent a decent house for that round this way).
Theoretically- you have enough in the bank to rent for 33 ish years- thats purely from cash in the bank, and using none of your income on rent/mortgage (which i presume you do currently).
Regardless of whether the market falls or rises, you have a large wad in the bank to play with- or as i would do just leave it leave there for security.
It would be far more appealing to me personally to have that lump in the bank and very few cash flow worries, than staying on the ladder and worrying about rising/falling prices and rates. If the time comes and prices fall, then buy somewhere cheaply and start again, still leaving a smaller lump in the bank.
That my personal perspective- flame me if you feel the need
01 July 2004, 12:15 AM
#24
Scooby Regular
Join Date: Jan 1999
Posts: 5,786
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Freak
For example say you owe 100k- and you can now sell for 300k.
thats a lot of profit for not much effort- you then take the 200 profit and put it in the bank.
Lets say a decent place costs 500 odd a month (can rent a decent house for that round this way).
Theoretically- you have enough in the bank to rent for 33 ish years- thats purely from cash in the bank, and using none of your income on rent/mortgage (which i presume you do currently).
Regardless of whether the market falls or rises, you have a large wad in the bank to play with- or as i would do just leave it leave there for security.
It would be far more appealing to me personally to have that lump in the bank and very few cash flow worries, than staying on the ladder and worrying about rising/falling prices and rates. If the time comes and prices fall, then buy somewhere cheaply and start again, still leaving a smaller lump in the bank.
That my personal perspective- flame me if you feel the need
thats a lot of profit for not much effort- you then take the 200 profit and put it in the bank.
Lets say a decent place costs 500 odd a month (can rent a decent house for that round this way).
Theoretically- you have enough in the bank to rent for 33 ish years- thats purely from cash in the bank, and using none of your income on rent/mortgage (which i presume you do currently).
Regardless of whether the market falls or rises, you have a large wad in the bank to play with- or as i would do just leave it leave there for security.
It would be far more appealing to me personally to have that lump in the bank and very few cash flow worries, than staying on the ladder and worrying about rising/falling prices and rates. If the time comes and prices fall, then buy somewhere cheaply and start again, still leaving a smaller lump in the bank.
That my personal perspective- flame me if you feel the need
1) If you are selling a £300k house, you're not going to be able to live in a similarly nice gaff for £500/month rental in the same area. It is more likely to be costing you £1000+/month for a nice house to rent, and of course, there are far fewer houses for rent than flats.
2) All very well to have rental income in the bank for 33 years, but in 33 years time, you've not got a house to live in that is costing you NOTHING (as would a house you'd paid off the mortgage on by that time)
3) Staying on the ladder doesn't necessarily involve worrying about falling/rising prices. If you have a fixed rate mortgage (or low payments, or low LTV), it's probably costing you LESS overall than renting in terms of monthly outgoings.
4) It's all relative anyway. If you're not planning to move house, the value is relative. If it goes down, and you then want to move, you'll be able to move to a similar property for the same relative amount.....and vice versa if prices rise (simplistic generalisation!).
5) You **** £200k on 33 years of renting, and what do you have to show for it at the end? Nothing. Keep paying off the £100k mortgage, and in 10-15 years, the house will be yours to keep
01 July 2004, 12:18 AM
#25
Scooby Regular
Join Date: Jun 2004
Posts: 2,862
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by fast bloke
erm - that is stamp duty - not survey fees
Surveyors fees vary from place to place although normally not over a grand for a standard report on an average house.
01 July 2004, 12:19 AM
#26
Scooby Regular
Join Date: Nov 2000
Posts: 26,619
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Freak
For example say you owe 100k- and you can now sell for 300k.
thats a lot of profit for not much effort- you then take the 200 profit and put it in the bank.
Lets say a decent place costs 500 odd a month (can rent a decent house for that round this way).
Theoretically- you have enough in the bank to rent for 33 ish years- thats purely from cash in the bank, and using none of your income on rent/mortgage (which i presume you do currently).
Regardless of whether the market falls or rises, you have a large wad in the bank to play with- or as i would do just leave it leave there for security.
It would be far more appealing to me personally to have that lump in the bank and very few cash flow worries, than staying on the ladder and worrying about rising/falling prices and rates. If the time comes and prices fall, then buy somewhere cheaply and start again, still leaving a smaller lump in the bank.
That my personal perspective- flame me if you feel the need
thats a lot of profit for not much effort- you then take the 200 profit and put it in the bank.
Lets say a decent place costs 500 odd a month (can rent a decent house for that round this way).
Theoretically- you have enough in the bank to rent for 33 ish years- thats purely from cash in the bank, and using none of your income on rent/mortgage (which i presume you do currently).
Regardless of whether the market falls or rises, you have a large wad in the bank to play with- or as i would do just leave it leave there for security.
It would be far more appealing to me personally to have that lump in the bank and very few cash flow worries, than staying on the ladder and worrying about rising/falling prices and rates. If the time comes and prices fall, then buy somewhere cheaply and start again, still leaving a smaller lump in the bank.
That my personal perspective- flame me if you feel the need
Do you have a part time job as a Euro 2004 referee? That has to be the most short sighted view I have ever read
01 July 2004, 12:28 AM
#28
Scooby Regular
Join Date: Nov 2000
Posts: 26,619
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Freak
Im not disagreeing with anyones perspectives- just offering a different one.
All depends on your outlook on life in general and the future.
All depends on your outlook on life in general and the future.
A different and poorly planned perspective.
OK - your scenario would be passable if you thought you would live for 33 years and have no kids or family - other than that it sucks