Advice - Sell second house or not?

S

suzyann

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Hi

My partner and I are buying a house together - the cost of the house is 535K + stamp duty- We are selling my house , which provides a profit of 180K and with savings will leave us with an anticipated mortgage of 360K
He also own a house in the country which is very rentable - there is 200K left on the mortgage for this house and the house itself is worth 320K. We are considering selling this too and having a lower mortgage of 240K which we could pay back in 15 years as opposed to 25 years- This means that we will be paying less interest back to the bank - Is this a wise financial move to sell the second house?
 
I think it's really a matter of how much you are prepared for renting it out. I was in a similar situation as you and decided to rent out my house.

There can be quite a lot of work involved getting tenants, doing up a lease, worrying about how they are treating the house, cleaning up the house in between tenants, having to call out to fix things, registering with prtb etc.
Plus from a financial point of view you become liable for capital gains tax when you sell, plus tax on rental income has to be declared etc and possibly stamp duty clawback as well.

So i'd say only rent it out if you are prepared for all the above hassle. Personally I think the extra flexibility that you will have from the smaller mortgage would be better. (from a lifestyle point of view, not neccessarily a financial one!)
 
Hi Suzy

As per Baloney last comments...

If you dont want the hassle of owning the property and renting it out sell it.

On the other hand if you are looking at it in relation to a long term investment i.e. financial view point... you should keep the property.

Always seek advice from an financial advisor & accountant before making a decision in this respect.
 
Always seek advice from an financial advisor & accountant before making a decision in this respect.
Click to expand...

You do not need the advice of a Financial Advisor & Accountant. Why are people advocating that you pay out fees for the most basic advice?

One item to note is that if your partner has the other house as a PPR, and then rents it, they may be liable for capital gains on the increase in value for any future sale, unless it becomes a ppr for 5 years.

My own personal view; sell now, reap benefits, keep your present mortgage payemnt and term low and ...........enjoy your salaries!
 
Hi
Thanks for the comments - We were always swaying towards selling both and I think this has just fully confirmed it for us - I think the second house we would need to think of as a long term investment and given the fact that our own mortgage would be 360K which is high enough - I think we will prefer the benefits of reducing that and having it paid a lot quicker
 
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