Potentially could be a waffle fest of a post, so will try to be brief.
Built our house, got £150k debt sunk into it. No real idea on value but it would be expected to sell for anywhere between £600-700k
Thinking of buying a cheaper house and investing
Everything will be a compromise against what we have
Have the potential to sell off a build plot for circa £200k and then do a house swap for a house valued at £475
Leaving us with zero mortgage and up to £50k
What would you do to potentially try and (a) make life easier in the future
(B) find a way so we can work less and hang out with the kids more
Current thinking is, do the house swap and buy another property (around£200k) with £50k cash and £150k buy to let mortgage and rent it out for about £1k per month
But... we are clueless, could we be cleverer and even better off (eventually)
Any advice welcome
You've got a house worth 600-700k that owes you 150k , I don't think your that clueless 😉
I would go for the one that leaves you with the house you want to live in most.
Why compromise on the house just to raise £50k when you already have such a good LTV in the house you live in now.
Got lucky, with a good design, good location and 18 months of backbreaking, brain breaking work 6 years ago!
I will build another house (house we really want to live in) in a few years, when both kids are fully ensconced in school and I can handle the stress of doing it again
In the meantime it seems crazy not to try and take advantage of our equity to improve our finances/freedom in the future.
Just not sure how best to go about this
BTL has horrible capital gains at the moment and consequences for stamp duty etc. Unless you are wealthy enough to have several houses then many of the negatives go away.
This is the stuff I need to know!
Now just seems a good time to sacrifice a few things to improve things for the future (we really don’t need to be living in s house worth nearly £700k at the moment)
There must be an option?
Another option is to look for a property with some outbuildings I could convert to holiday let’s but haven’t found anything in a year of looking
Sell it and down size.
That’s the plan but doesn’t give us anything other than being mortgage free. Got to be a way to earn from our spare equity.... or maybe not
Where do you live, is it nice? Round here I am seeing lots of small eco pods/glamping/wooden huts and beach type huts going up and being rented out. Seems to be a growing market for places to go away for weekend or so, sit by a fire pit and shoot the shit. They aren't travelling far, just getting away for a wee break. It seems to be connected to the Air BB thing. If I had a parcel of land and the skills to build something simple, cool and nice - cheaply - id be thinking about that.
Cornwall and where we live currently is perfect for that... just don’t want to get into more debt to do it... I costed out building a couple a year or so ago but we would need about £100k for huts and infrastructure..
It’s an option though
I'll say it before someone else does,
"Humble brag is humble" 🤣
winner!
Personally I would keep the debt in the house you own rather than BTL. The work of letting a property can be quite high unless you pay someone to do it and in that case you loose most of the profit.
Try some form of seasonal accomodation. You don't have to do multiple units at once. Start with one.
Funnily enough we were just chatting about that with a friend, who bought a mobile home on a big site as a holiday let. They seem to do ok as a little income booster off that... hmmm
I guess the main motivation to consider selling is, we fancy living in a different house, somewhere more sociable, for a bit
In your position I'd be looking at houses I wanted to live in places I wanted to live. If that leaves a bit of change in my pocket then BTL is still a decent investment. Holiday let is nice in that you make decent money for a season then have the option to mothball the place or use it yourself. A residential rental can be good to when it goes well (and despite the horror stories most do). You need to understand all the taxes and expenses but it should still work out.
If it's about a house for your family to live in, keep it simple. Find the street or village you want to live in. Look for for sale boards, buy one. Try not to worry about the rest, good friends and neighbours close around are priceless.
couldn't you sell the building plot, pay off the mortgage and stay where you are?