Due to the high demand for rental properties, a cultural shift has occurred over the past few years and many people are now consider letting out their property as a profitable alternative to selling it. Indeed, letting out your property has a number of advantages.
Firstly, the value of a property is, in practical terms, irrelevant, unless you are actually selling it. So renting it out instead means that you simply don’t have to worry about property prices. It wouldn’t matter if prices were to rise or fall in the short term.
Secondly, by letting out your property, you get to keep the investment in which you have no doubt expended time and money, and you don’t have to spend money on the various costs of selling, and especially re-buying. There is also something pretty cool about being a landlord!
Of course, your rental income should at least cover your mortgage payments. Whilst monthly mortgage costs should remain virtually static throughout the term of a typical loan (subject to interest rate fluctuations), and then disappear at the end of it, rents are more likely to rise over the long term, providing you with an escalating annual profit, which many people regard as their pension.
Renting is also quicker than selling, so you can immediately realise your short-term plans, and unlike selling, renting is highly reversible should your plans change in the future.
Finally, tightening mortgage lending criteria under the Mortgage Market Review regulations suggests that it might just be worth keeping the mortgage you have, as a new one might be harder to secure, should you wish to buy again in the future.
So before you put your property on the market, why not ask us to provide you with some expert confidential advice on the options available to you. You might be in for a pleasant surprise!
© Copyright 2017 Richard Rawlings except as excluded under licence.