Property, how can I be rid of it?

[Velvetee]

I purchased a new build property 4 years ago in Leicester and since I've had it, it's been a millstone around my neck.

Not only do I make a loss with the rental income, but the property is in negative equity.

I don't want it anymore, how do I get rid of it and where do I stand with the lender? If I hand back the keys, I will still owe them money, the outstanding mortgage is �149K, but I think it's only worth around �120K.

What options do I have?

Thanks

[buildersmate]

Very few, V.
Yes you will still owe the money if you merely hand back the keys. If you do so you will end up with more debt than if you sell it yourself as the lender will add on all the fees it has in disposing of the property onto your debt, which they will then pursue you for.
Difficult though it is to sell property right now, there is a market.

[Velvetee]

Thanks Buildersmate.

Well looking on property websites, there are hundreds of newbuild properties in the Leicester area for sale. There are two in the developmnent where mine is and they are on the market for �114K.

Unfortunately, the tenant vacated in September and I've yet to find a new one. The other worrying thing is, I have another in Leicester, that will also be vacant at the end of the month. I guess I'll just have to hold on.

[dot.hawkes]

Offer it as a renal property to the council, they are always looking for somewhere to accomodate homeless people, it might not be too big a risk and you may get some decent people movong in, i would contact them and see what they say, you might be able to get a decent rent paid and a reliable income then.

[Velvetee]

Unfortunately Dot, my lender prohibits letting the property to DSS tenants. I know not all council tenants are DSS, but there is a liklihood that they would be.

[dot.hawkes]

But you can stipulate that you don't want referrals from people in reciept of benefit or job seekers. I am sure the council have emergency housing applications from people who work and are not on benefits, it would be worth looking into.

[Velvetee]

Thanks Dot. Do you know, if the property is damaged in anyway, will the council rectify this when the tenant leaves?

[sqad617]

Velvetee�.what a terrible story. When the house market was booming, did you take out 2 mortgages on two properties to rent? Presumably you have a house of your own in which you live. If I remember correctly on previous threads, you intend to get married to your partner in the New Year (forgive me if I have got it wrong), so could not you discuss a �deal � with your partner in a financial effort to �tough it out� for the foreseeable future. Not ideal, but best I can come up with.

[madmaggot]

I'm afraid you took the gamble and for the time being lost out. Hang on in there and it WILL improve.
We invested our life savings in bonds when we retired; need I say more?

[sqad617]

Doc.....you are all heart.

[Velvetee]

I have two other properties in London too, which are easy to let and the rental income both covers the mortgages and make a small profit.

Buying the ones in Leicester was a big mistake. I listened to advice which has since been found to be incorrect.

Squad, yes I live with my partner in his house, but I don't really think there is much I can do about the two white Elephants in Leicester, except sit on them and see if the council will take them. I suspect they will not though, as there are possibly thousands of other people in my situation, who fell for the lies of investment clubs.

Oh well, you live and learn.

[sqad617]

In my case.........I live and am slow to learn.

[Velvetee]

Have you been stung too Squad?

[Velvetee]

Well Doc, you have a Government that claims to be socialist, but is not. I believe in working hard for a better life. Each to their own.

[tonyav]

hi velvetee, builders mate is dead right with what he is saying, there is still a market out there but to sell it has got to be priced accordingly and in line with the prices of surrounding propertys. we have just sold our house after first putting it up for sale at easter but we have had to accept an offer �50,000 less than when it first went up for sale but it is swings and roundabouts as the house that we are moving to has also fell by about the same amount.
or of course you can try and ride out the property slump and wait for property prices to rise again ( if they ever do ) good luck to you with what ever you decide to do.

[Velvetee]

As I said, you are entitled to your opinion and I'm sure if you were a lottery player Doc and won several million tomorrow, you would give every penny away to the poor and needy and not use a penny for yourself or family.

It's called investment for the future. When I retire, there will be no pensions and I don't really want to live in poverty, on the breadline. We all have a responsibility to help ourselves and not expect the Government to give us handouts.

I wasn't looking for sympathy, but constructive advice, not judgement. This is why I come to this site and I'm sick of people who just post "answers" just so they can read their own words. a bit like liking the sound of one's own voice.

[Velvetee]

Thanks Tony.