My house in the UK has now had tenants in it for a week, and so far I've had no hassle at all!
This is as expected, because I opted for a fully managed service with a reputable local lettings agency, and my main point of contact wears clothes that fit, rather than the usual unfortunate one-size-too-small suit that so many (male) estate agents seem to opt for.
It cost me around £3000 to get the house in a rentable condition, and that sum includes a few 'upgrades' I needed to get done (carpets and shower for example) and the first month's fees, which is pretty much the first month's rent, to the letting agent.
My house.
The house has rented for £650 a month, which is more than I thought I'd get as the people I'm renting too offered to pay extra as they've got a dog, and I'd specified no pets, so there's a tip if you're renting an unfurnished place and fancy getting a 5-10% premium on your asking price!
After agency fees and tax, the former is I think is around 12% and the later 20% of what's left after I've taken that 12% off, I should be getting around £480 a month coming in.
Although once I've taken off around another £50 for the insurance, that's down to £420.
TBH it's not a great income on a house that's worth £170 000.
Especially when my mortgage is £610 a month, I'm ending up having to 'sub' the rental to the tune of £200 month.
But that's only because I'm paying off the mortgage on a fairly rapid term, only 8 years left. I originally took out a 15 year mortgage, I had the option to double the repayment period, but I want to be mortgage free by 55, and I'm roughly on track, except that it'll now be early 56 because I took a Covid repayment holiday for 3 months.
So, is it worth renting the house?
According to the above calculations I'm making a loss, but that's only because of my choice to repay the mortgage more rapidly than I need to.
In terms of yield it's not too great - £420 (net rental income after costs) over a year is £5000 a year, and that's about a 3% return on the value of the house. Hmmm... not great!
However, property is about a secure investment as you can get in the UK, and thanks to Boris Johnson's recent policy announcement to make 95% mortgages available to practically everyone, but with no provision to increase the housing supply, that means the value of my house is very likely to go up.
Especially since I bought my house in a nice area with cheap houses, the kind of place that's going to be appealing to anyone who works online, and it seems a good bet that more people are going to be working online in the future, and it's a damn nice house with no need of major repair work in the immediate or medium term.
Two minutes walk away from my house. The British love this trees and water stuff!
So I think it's a good bet that the value of my house at least won't go down, so as long as I can keep earning enough money to 'sub' that £200, which isn't a great deal of money every month, I can keep up those higher mortgage repayments.
There's also the option to extend the term, of course, but I'd rather not be paying a mortgage into my 60s.
Having the house also keeps my options open
I'm aware I could sell the house, pay off the mortgage, net around £110K and invest that elsewhere, trust me the thought is tempting.
However, I've already got substantial other investments which makes that thought less appealing.
And I like the feeling of having a foothold in the UK still, even though I probably won't be going back!
I might still sell it....
But only to fund a property purchase here in Portugal. I really like it here so far, and if, when I start my land search, I start to see properties I like around the £40-£70K mark, which my savings won't stretch to (I'm not cashing in my crypto to buy land!) I might just sell it to buy something more substantial here and put a few tens of £K in the bank, then I could probably quit working online all together, now trust me THAT IS TEMPTING!
The problem is I REALLY LIKE THAT HOUSE IN THE UK, It's so damn CUTE, and it's in such a NICE area!
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