Can't sell old house, rent it instead?

[NSS]

Sounds like a nightmare Dave but is £800/mth really all you could get? We get that for a two bed flat in Portsmouth (and I know someone who pays that for a parking space in London!).

[DeeJunFan]

Here's me thinking 800 a month was good. I'm paying 650 a month for a detached 4 bed 3 bath in Newry.

[Ferdinand]

6 hours ago, NSS said:

Sounds like a nightmare Dave but is £800/mth really all you could get? We get that for a two bed flat in Portsmouth (and I know someone who pays that for a parking space in London!).

Depends on the very local market.

Locally here (North Notts ex-mining) the ceiling for a 4 bed modern detached rental is about £800-£900 a month - some exceptions obviously. Such a house will cost approx £220k at is cheapest if work is not required, so the standing advice from Estate Agents to landlords is not to buy anything to rent over £100k unless you are in the Shared House market (not many are). One of the related points is that it is difficult make much of a turn on eg adding a 2nd floor to a bungalow; or in some areas doing newbuild. If you go to Nottingham it is livelier but the City Council are landlord-spankers..

One of our local councils is currently trying to sell housing land with PP next to one of the best areas for about £180k per acre (= 15k per plot), and no one is interested.

I own a number of houses locally, and I have pretty much zero CGT liability because prices are stuck in cash terms at what they were 10-12 years ago for most houses. But OTOH yields of 6-8% or more are normal on small rentals. For London they will be getting BOHIC-ed for CGT because values are (sorry - were !) going up, but the yields are 2-4% much of the time.

Locally our market for £250-350k properties is dead and very conservative, unless pricing is competitive, or a silly southerner / person with money to indulge falls  in love with it.

Ferdinand

[Triassic]

We've have the same problem, from the outset I knew it was going to be challenging to sell a six bed house, in not the best of areas, I can see the new power from waste power station from the front garden! However after 18 months we accepted an offer at £15k below the price we wanted. 

So what did we do to get a sale?

I selected the estate agent carefully, I went with a new agency opening up in town, the manager was keen to get the business up and running and worked hard to market the property, we changed the photos three times and relisted it on Rightmove twice, so that it would get posted to those buyers who'd set up "new to the market" alerts.

I negotiated hard for a fixed fee, which equates to 0.75%.

we continued to paint and decorate rooms and the exterior, not everyone is looking for a project, people want to be able to walk into a place and get on with life.

we preened the gardens, there is nothing worse than a weedy overgrown garden.

finally, I'm getting out of 'buy to let' it's just a pita. If you need to rent, look at your likely yield and consider how you would deal with maintenance and breakdowns. Then there's void periods, dealing with tenants that cause problems (I've had weed being grown in the back bedroom, a cat lady, when the t&cs says no animals, non-payers, moonlight flitters and someone who set fire to the house during an argument with his partner).

[Jeremy Harris]

We've only once let a house, and both tenants were a total nightmare.  I really don't know how people put up with the hassle of letting houses out, given the increased responsibilities on landlords and the risk that the tenants will trash the place, not pay their rent, etc etc.  Our final tenant not only failed to pay the rent, but when we finally had him evicted he went around and smashed both toilets and the washbasins, and left the place with all the taps running.

We had a local estate agent around when we were about to start the new build, as one option was to let our current house, rather than sell, mainly because houses weren't selling at all at the time.  She seemed very optimistic that we'd get good tenants for around £600 to £700 a month, but frankly I just couldn't face going through the hassles we had years ago when we let a place.

[Ferdinand]

@JSHarris

These days the middle is being pithed out of the market, and accidental landlords will be finding the amounts of paperwork and potential criminal offences threatening, and Mr Osborne is trying to force professionalisation (and take loadsamoney from the system :-).

Renting to very good friends can work imo (=both sides value the friendship above all the money they might lose) - if there is trust and both sides work hard, but to rent to acquantances or not very good friends is cruising for a bruising as they may be willing to do you over and lose the friendship.

You now have to check their right to rent here, too - and will suffer like airlines or lorry drivers if you give a service to the wrong people.

Ferdinand

[Roger440]

Dave, if i read it right, you have no mortgage, which means you own both outright. Correct?

I know you are both self employed, but to keep the ball rolling, surely taking out a mortgage on your existing house has to release some cash has to be an option at this stage? Theres a few wiling to do 4 x salary now. Then either keep trying to sell, or rent it out. Renting would cover some/all? of the mortgage in the meantime. Or have you been just a little too efficient at managing down your income?

Im inclined to agree, that if its not selling, you are going to have to take some pain on it. Probably auction?

I know you said you wont sell below £250, but unless you rent, looking from the outside, im not sure you have many options as long as the crazy people are running things north of the border! 

 

[Ferdinand]

Hmmm.

One market for such a house with lots of bedrooms at a not very expensive price would be professional foster parents .. have you tried a personal ad in adoption magazines etc?

Ferdinand

[Temp]

We are on a 20 week sole agency deal with the present agent that expires in August, so we can't do anything until then

Usually you can appoint another agent but will either pay a higher fee or more than one fee.

Have you tried advertising it yourself?

 

 

[ProDave]

Yes you can appoint 2 agents, but it's unlikely they would work together and in the event of a sale they would both claim their full commission. The original agent we were with offered to do dual agency and accept half of the commision in the event of a sale but I couldn't find anybody else to take up that offer.

I have been advertising it myself on gumtree, but the only enquiries from that have been other agents wanting to market it for me, so a bit of a waste of time, but it's very cheap.

[Onoff]

I'm an accidental landlord for about 20 years. A long story but I rent two, 2 bed terraces about 15 miles from where we live. As for tenants: Had close family who were a bit of a nightmare when a marriage broke down and they left owing money which we wrote off. Not a lot but when someone runs up a cable porn bill in your name etc! 

Had one house we suspect used as a brothel - that tenant had excellent references. Had a foreign tenant found and credit checked etc by an agent who was the worst ever. The house was getting post for about 15 different names all of the same nationality. Ended up evicting etc. Whatever you do get rent protection. 

Best tenant ever was a good friend of a good friend. On paper would never have entertained them as the guy had CCJs, couldn't get a bank account etc. Genuinely down on his luck due to a failed marriage. I initially said no but the guy offered 6 months rent, cash up front. Was in there for I think 6 years. Paid early every month and did all the repairs as he was a self employed builder. Said he owed me for giving him a chance. Sorry to see them go when it got too small for their expanding family.

You never can tell. It's really not the money spinner people think it is. I've got the top British Gas landlords package on both and I pay 40% tax on my earnings from them.

Saying that I wish I'd invested my money in a few places back when I could have done.

[ProDave]

I thought I would just drag up this old thread.

 

It has been let now for 1 year. The tenants are generally looking after the house (but not so much the garden) The rental figure we got was more than my previous estimate.

 

The tenants are running it as a B&B still and by advertising a lot more than we did and using a number of booking websites getting good occupancy.  They stated at the start they want to buy the house in a couple of years. I yet remain to be convinced that will actually happen.

 

It proved challenging sorting out a rental agreement.  I spoke to our solicitor about doing it as a commercial let, but he said no, that's far too complicated and comes with a whole host of other issues. So it is let on a short assured tenancy, with a standard contract except the no business and no sub letting clauses removed.  From an insurance point of view it was already insured on a guest house policy and checking with the insurer, as far as they are concerned we have just put a manager in to run the place so no changes to the insurance needed.

 

 

Anyway what prompted me to drag up this old thread is there is a house at the top of our road that is very similar sized. Ours is a little larger, 5 bedrooms and 4 bathrooms and double garage, theirs is 4 bedrooms 3 bathrooms and no garage.  This was in fact the house our surveyor used as a comparison to arrive at a valuation for ours as it was the most recent sale in the street. On the basis of the differences he valued ours £15K more than this house.

 

Well today, a for sale board appeared at that house. On looking it up, the asking price is just slightly higher than it's last sale price, and only £10K less than our valuation. Indeed our asking price at the end was less than they are asking.

 

I will be watching what happens, and will be mighty peeved if someone comes and buys the damned thing. 

[Thedreamer]

I had a colleague who sold his house on Skye last year, it was a B&B with around 4-5 bedrooms, but it was on the market for years. 

 

Are you marketing it as a B&B/commercial business as well as a potential family residential property?

 

 

[ProDave]

It's just been marketed as a house with "B&B potential"  something you see quite a lot.  If it were to be sold as a business, the value would be a percentage of turnover so would value the business a lot less than the house.  In effect you buy the house and get the business for free.

 

The other trouble with marketing it as commercial, is possible tax implications, and the fact the only commercial agent we have had a conversation with wanted a huge up front fee to market it, unlike a conventional estate agent that only charges a fee upon completion of a sale.