Save money and more by letting-to-rent
In my previous post, I looked at some of the financial benefits of why let-to-rent is better for relocating homeowners rather than selling your property and buying a new home. In the UK, you could save £12,000 or more by letting out your family home and then renting in your new location, but there are plenty of other reasons to let-to-rent – not all of them financial.
1. Relocating made easy
You could wait months to sell your home. If you’re relocating for work, this could mean spending weeks apart from family, long distance commuting, or even losing the job opportunity altogether. Let-to-rent means you can move immediately.
2. No expensive mortgage penalties
Depending on the type of mortgage you have, you might be subject to expensive repayment penalties on your existing property. If you need a new mortgage to finance the purchase of your new home, you may have to pay new arrangement fees. When you let-to-rent, no such issues need be considered.
3. Added security of keeping your bolt hole
What happens if your new lifestyle or new job simply don’t suit you? If you have kept your home, you’ll still have somewhere to move back to a readymade bolt hole. Let-to-rent is the ultimate tool that allows you to try your new location before making a longer-term choice.
4. Cash flow and tax benefits
It’s probable that you’ve paid a good chunk off your mortgage, and simultaneously seen the value of your home rise. If you’re moving to a new area with lower median rents, you’ll find that a let-to-rent strategy provides positive cash flow which could be substantial (I’ve known cases where the difference pays the entire rent on the new property and more besides).
There are also a range of expenses that can be deducted to reduce any tax liabilities: and if you’re ‘trading up’ in location, these could be a massive benefit.
5. Don’t miss out on rising property prices
If you sell your home to relocate, you could miss out on a rising market (as well as incur all those costs when doing so). Renting out your home allows you to collect rent to pay down your mortgage while the price of the property increases. It’s a perfect way to experience property investment: and if you don’t like it or your personal circumstances change, you still have the flexibility to sell your home and travel the more expansive traditional route to relocation.
These are the kind of benefits that make the let-to-rent strategy a sensible one for so many people (even those who aren’t relocating). In my next post, I’ll look at stress free let-to-rent if you’re thinking about renting your home.