Q We own our home in Plymouth outright, so have no mortgage on it.
Next March we have to move to Manchester for work. We have only just bought our Plymouth home (in May 2022). Our plan is to rent in Manchester for at least two years. At the moment we have no plans to return to, or settle in, Plymouth in the future. We bought the house because, at the time of buying, we thought we would be here for at least five years, but then our work circumstances changed.
Do you think it would be wise to just rent out our home in Plymouth or take out a mortgage on it to fund our costs in Manchester and at the same time let it out?
Our concern is that if we purely rent it out without taking out a mortgage, the monthly income after tax is not enough to cover the costs in Manchester fully. We would have to cover it out of our monthly income. I wonder what would be the best cost-saving way to approach this.
AN
A I am struggling to understand why – if you have no future plans to return to Plymouth – you don’t just keep things simple and sell up before your move to Manchester.
This would give you a cash lump sum to stash somewhere – and possibly help to pay your rent – and the flexibility of being able to put down a deposit should you change your minds about renting rather than buying.
It would also avoid the costs – initial and monthly – associated with taking out a mortgage on your Plymouth home. You worry that the rent you could get on your Plymouth home wouldn’t be enough to cover your new costs without taking out a mortgage. But if you did, you would not only have to find sufficient cash to pay your rent but you would also have to find the monthly wherewithal to pay the monthly mortgage repayments, which could easily swallow up your rental income.
I’m also not sure how practical a proposition it is to manage a Plymouth rental property from Manchester.
It might work if you got an agent to manage the letting for you, but this would reduce what you got in terms of rental income because of having to pay the agent’s commission.
Then there are the costs of meeting the various safety requirements to make your home legally rentable.
