UK Landlord Forum / Life

Ive got 5 rentals properties all paid off, my question is..
which way is best

I want to clear off my home mortgage (94k) so we can relax and
maybe go part time work wise.

One of the properties will be vacant in two months
so had it valued at with figures around 105/110k
Purchased at 63k

Mortgage is only 2% fixed for 3 yrs then 5 yrs left after the fixed has ended. Paying £1050pm.

There's CGT I know and rental loss (£450) V interest on my home mortgage

Sell and pay off home mortgage or keep renting?

Keep the let property and use the rent to boost your mortgage payments even further if that's possible, reducing the term significantly. You don't say if the £1,050 is your minimum payment or whether you are overpaying already (many mortgages these days only allow an overpayment of 10% of the balance per year).

With 8 years remaining it looks like your mortgage debt might be around £93,000? 10% of that is, say, £9,000. If you changed your monthly payment to, say, £1,800 (£9,000 evenly split across the year's payments) then your mortgage term would tumble from 8 years to around 4 years and 6 months.

Of course, the 10% would change each year... so it'd be somewhat worse than this, but it's a good illustration.

If you changed your monthly payment to £1,500 (£450 rent) the term would drop to 5 years 6 months.

And in 5 years it would probably (E&OE) be worth more.

Thanks for the speedy reply,

I See what your saying 're putting the £450 rent towards the mortgage which makes good sense  but that means still working another 5/6 yrs full time which is what im trying to avoid lol

Just trying to cut down my working time for home life family time thoughts being clearing off the mortgage and living off some part time work and the four other rental incomes

Financially your way looks the best way to be fair ,,,,, I need to have a think

When I started in this gig I figured that 5 unencumbered properties would suffice to provide for me, for the rest of my life. In terms of looking at voids and maintenance etc. and areas and ups-and-downs and different Governments etc.. I never thought 4 was the number that I would aim for. It was 5.

Now my target is 10. But not necessarily because that is the number to keep me in the manner I've become accustomed to (I can live frugally)... but because 10 is the number that is probably going to keep me busy when I cut down my employed hours, likely to 0.

I think consciously reducing 5 to 4, for you, is unwise... but there's so many variables it has to just be my own personal heuristic and gut feel.

Someone talked to me about selling a property to buy a dream car... it was a Ranger Rove... I told them they were an idiot to substitute an asset that increases in value for an asset that decreases in value... one might call it a liability even... this property that brings in £450 per month today could bring in £500 per month in 2020, and £600 per month in 2025... and it could be worth £110,000 now, but maybe £140,000 in 2025. Yes, CGT is a killer, but it's still only ever gonna be a %age of the amount...