B
Meanwhile you waste 5 to 10 years of interest payments and the hassle of managing tenants. I also think that your timeframe is optimistic. If the OP wants to move then there is no point holding onto this contingent liability.It may take 5 or even 10 years for the value of the property to match the remaining mortgage. I would wait it out and you will probably be able to sell it in time.
Meanwhile you waste 5 to 10 years of interest payments and the hassle of managing tenants. I also think that your timeframe is optimistic. If the OP wants to move then there is no point holding onto this contingent liability.
The money is already lost, ignoring it and carrying on regardless does not diminish the loss and in many cases will exacerbate it. The rent will not likely cover the mortgage interest, if it would then the property would not be in negative equity. Even if it did, only 75% of the rent can be offset against interest for tax purposes. You also have the hassle of managing the cash flow. It's a very poor investment in the medium to long term.Well if you can rent it out and the rent covers the interest portion of the mortgage you can just view having to pay the capital part as an a investment. The house becomes part of a long term investment, it will eventually sell.
I think it is preferable to loosing such a chunk of money just to move to some other location. You can still move to some other location if you want by renting.
The money is already lost, ignoring it and carrying on regardless does not diminish the loss and in many cases will exacerbate it. The rent will not likely cover the mortgage interest, if it would then the property would not be in negative equity. Even if it did, only 75% of the rent can be offset against interest for tax purposes. You also have the hassle of managing the cash flow. It's a very poor investment in the medium to long term.
If rental yields were better than standard variable rates then you would expect that the property would be attractive for an investor and the property would break even at least (i.e. cover the mortgage in a sale). Given that the OP is on a half tracker it's possible that the rent would cover the interest payment, but tax would be due on any rent above 75% of the interest payment. You also have the hassle of managing cash flow and tenants for potentially a decade or more with little or no return. It's a load of hassle for nothing.When you say "The rent will not likely cover the mortgage interest, if it would then the property would not be in negative equity" - what do you mean? What is the relationship between negative equity and mortgage interest? The market price is independent of the mortgage or mortgage interest.
15 years is a long time to be waiting around for breakeven, especially if they already want to move now. It seems to be a similar strategy to buying a car and pretending it's never lost it's value by waiting until it's a classic to sell, meanwhile storing and maintaining it at considerable cost.But you seem to miss the fact that after 5-10-15 years of doing so you still have an asset that hopefully will be valued at more than the outstanding mortgage.
It's up to the OP do decide what route to go down.
15 years is a long time to be waiting around for breakeven, especially if they already want to move now. It seems to be a similar strategy to buying a car and pretending it's never lost it's value by waiting until it's a classic to sell, meanwhile storing and maintaining it at considerable cost.
Renting will be the only alternative option in the medium term as the OP won't get any more credit.
Goal= Location wise I would like to move to a nicer area. [FONT="]thks[/FONT]
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