In message , Stephen
writes

I think this concept of beneficial ownership only has two uses: for
tax and in divorce, allowing someone who is not legal owner a share of
profits from a house solely in a partner's name.

Stephen.
"Beneficial Owner" is a concept to present blatant manipulation to avoid
tax and not something to worry about if you behave in a straightforward
way.
Which route to go down sales v rental depends on how quickly you want to
recoup any capital outlay including repaying any loans. Mortgages are
long term loans and it can be costly to repay quickly.

If you are renting then mortgage/loan repayments are a cost which can be
offset against rental income and so reduce your tax obligation.
So do you want quick return of your capital based on the increase in
value by upgrading or are you happy to take rental income and hope for
eventually a greater increase in capital value over a number of years.
With current low interest rates that may be a viable option but if rates
rise say after 2 years you may find it not worth the hassle.

Depends also what area you are in and what type of tenants you are
likely to attract for the type of property. One bad tenant trashing the
property can make a big difference.
--
bert