Quote:
Originally Posted by rogerxp
I really wanted to rent out my old house when we moved but needed all the equity to jump into our bigger property. Plus, didn't want to see the house I'd built-up (not literally) gradually getting trashed by occupants who didn't care like I did (gross stereotype there; they're not all like that). The mortgage on one property is big enough thank you very much  .
You've just got to be very careful when the interest rates rise and so will your mortgage payments. Most people are enjoying great profit at present (low mortgage, usual rental) but when interest rates start climbing it won't be the same so the figures need to be carefully monitored to make sure it's still profitable (obviously the property price should always increase over time).
I was chatting to my mortgage chap yesterday and interest rate rises are coming, just not 100% sure when, or by what amount (probably 0.25% or 0.5% in 6/12months), but certainly coming. Most people have defaulted to SVR by now which is great but of course will increase unless you switch to a fixed rate (and pay a little extra initially until the interest rates exceed your fixed rate). I'll be timing my switch to perfection (hopefully  ). A lot of people are going to be very caught out as they've enjoyed the low payments, spent the different (and got used to it), so when the payments go up it'll be a big shock. Me included to a degree might I add.
Just be careful of the figures. Otherwise a good investment (like them all there are pros & cons). |
Wise words re interest rates Roger. If we can get the rental advertised (or near to it) then it would be 35% above the mortgage, so we would have a bit to play with. Sounds strange but I don't want to make any money from the rental (personal tax reasons etc) and don't even mind having to chip in a small amount extra on top of the rental to cover the mortgage (if it ever came down to it).
More making sure of the right tenant that is worrying. Even though the agent won't allow people to view if their annual income isn't three times the annual rent still doesn't mean that it won't get trashed. Obviously there is wear and tear and tenants rights etc.....I don't know maybe I am best shot of it and hang out for a sale
