i have a property in leicester.. what would you do with this situation.?

Question

it's a studio flat in a refurbed loft style building. the problem is the rent is only £375 a month and since the interest increases the mortgage is now about £420. The interest rate i am payingis about 6.5% but i couldn't get a better rate cos of the 130% rent to mortgage payments criteria. It hasn't been that easy to let and the area isn't going up in value like predicted when i first purchased. WHAT WOULD YOU DO?

yes it's a buy to let

and it's interest only

Answer 1

How much of the £420 goes toward paying down the mortgage? If it is £45 you are break even and ANY appreciation increases your net worth (maybe). If it is more you have a gain each month from the rent plus any appreciation (maybe).

This ignores maintenance costs, etc. Are there any tax advantages to owning real estate there (tax deductions like depreciation). After your figure your other costs (property taxes, maintenance, etc) add that to the £420. Then subtract the mortgage pay down and any tax savings. Are you making or losing? How much? Will appreciation offset that and give you a gain. Is the gain more than a risk free govt note? If it is you keep it. If it is less than a risk free govt note sell the place and buy govt notes.

Answer 2

Do you mean you own the property but you rent it out to someone else.? If so, then 45 pounds is not alot of money to pay each month when at the end of the mortgage you will have a property thats fully paid off by someone else, except 45 per month. You will then have that income but nothing to pay, nice equivalent to a pension. If you can afford it, keep it.

Answer 3

keep it its always gonna be an investment top the mortgage up with other money you may earn and think of the future when the mortgage is paid

Answer 4

sell it spring time is always a good time to sell

Answer 5

sell

Answer 6

sell it

Answer 7

sell it.