lmarinos Posted October 31, 2011 Report Share Posted October 31, 2011 Hi All .... looking for some non-partial feedback / opinions. Myself and my husband own a property in Crewe that we rent out. In the last couple of years we have had a troublesome tenant which has meant that every month we are laying out for one thing or another. The long and short of it is, is that in the last 19 months we have made a small loss!! When we factor in the mortgage payments, the letting agent fee's and the continuous stream of contractor payments we are having to make.. the house is proving to be not a great investment! To me - it's a np brainer... we should sell. I would like to cut our losses and sell the house and save ourselves the hassle ... but my husband is adament that even if the house is making us a loss, that long term (20+ years) it will make us a tidy profit ! The mortgage is currently interest only - so with the current set up, we will not be paying off the mortgage and would need to sell it at the end of the mortgage term to pay it off and to reap any equity it may have gained. My fear is that Crewe is not particularly up and coming and that any equity we may get will be limited and in my mind it just doesn't stack up. What would you do ? Sell or stick it out? Thanks Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted October 31, 2011 Report Share Posted October 31, 2011 In the last couple of years we have had a troublesome tenant which has meant that every month we are laying out for one thing or another. The long and short of it is, is that in the last 19 months we have made a small loss!! When we factor in the mortgage payments, the letting agent fee's and the continuous stream of contractor payments we are having to make.. the house is proving to be not a great investment! To me - it's a np brainer... we should sell. ..is this because of the T ..or because the prop needs repair ? If all works now done then rtn should improve - if T is causing problems (costs) then get a new T !! Look at all finanicial aspects and see what can be improved - do you need a letting parasite ?, sorry - agent ! they are expensive and serve no useful purpose (in my mind !) ...unless you like giving money away !! Can prop be split/ developed/improved etc to raise more income ? you are the beginning of this question not the end ! Link to comment Share on other sites More sharing options...
Richlist Posted October 31, 2011 Report Share Posted October 31, 2011 There are a number of elements in achieving or maximising profit 1. Have you set the rent at the market level.....can it be raised. Is a rent increase now due? 2. Have you made every effort to minimise outgoings/ expenses......as suggested dispense with agent, remortgage at lower rate, reduce insurance premiums etc. 3. Stabilise your maintenance costs.....understand what & where the expense is going. Is it justified, are the costs reasonable, can you reduce them ? 4. Are you claiming all the taxable allowances available to you ?.....most people are not. Link to comment Share on other sites More sharing options...
lmarinos Posted October 31, 2011 Author Report Share Posted October 31, 2011 We need the letting agent .... we live in London and the property is 170 miles away... so it's not easy for us to manage maintenance etc without a local agent. The T made a complaint to the council that we were not responsive ( a lie) and the council came in and made a long list of things that needed repair... some just cosmetic which posed no risk to health, but also whole ream of other stuff .... so we have been addressing all these things slowly... but one of the complaints is that she wants us to change all the windows to UPV to improve draft issues etc. The house is period property with the original stain glass windows which adds to the character of the house and would devalue it in our eyes - also, replacing all the windows would cost ££££ and based on our current loss making situation, we would never see a return on this investment. Splitting the house might be an option... What to do !!??? Link to comment Share on other sites More sharing options...
Melboy Posted November 1, 2011 Report Share Posted November 1, 2011 Get rid of the tenant would be a good start imo. No tenant should be able to dictate what windows they want especially in a period property. You have allowed the Tenant to dictate to you and the LA what they should have in your property having taken the property on as their rented home. Other than that a complete re-appraisal of your financial outgoings and tax relief is a must to see where costs can be trimmed or improved. Mel. Link to comment Share on other sites More sharing options...
Chestnut Posted November 1, 2011 Report Share Posted November 1, 2011 I agree with above - first you need to part with the difficult tenant. As it's a period house, would it be worth investing in improvements to make it more saleable? This in itself could be a good return. Or conversely don't spend if proposed improvements take it beyond what the market can stand for the area or street? Does the property have an Energy Performance Certificate? You would need one to sell the house - the EPC should recommend what upgrades might be suggested to improve the grade. e.g. double glazing. To avoid scrapping the stained glass windows could you fit secondary glazing? You should check the market value of similar houses in the neighbourhood and if possible how their specifications compare with yours. You can find what houses have recently sold for on-line with post code through Land Registry for small fee. I'd go and look around for the day, and do some local research. Crewe is only about 3 hours drive from London. Link to comment Share on other sites More sharing options...
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