Best time to sell

Snowdon

Registered User
Messages
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Hi,

I'm just looking for opinions on when it would be best to sell our second property. Here are the details:
- Three-bed terrace, built about 2000
- Paid €250,000 in 2006
- Mortgage outstanding: €177,000
- Rate: ECB + 1.15% (Ulster Bank tracker)
- Currently overpaying, so payments are €1,050 p/m and I'm making inroads into the capital sum
- Gross rental income: €6,500 approx
- Expected market price today: €105,000 approx

It was my home until 2010 when we married and I moved in with my spouse.

It lost us a ton of money on paper when the boom turned to bust (and got bustier). However it's profitable at present, because the value is increasing all the time (albeit slowly), it's providing a small income after tax, and besides, it will be a hell of a long time before it's liable for CGT.

What I'm wondering is what the best option is:
1. Sell as soon as it's no longer in negative equity - we forego future rental income and lose every penny that's gone into it, but we've a clean sheet and €1,050 extra each month from then on.
2. Sell once the mortgage is cleared - that's a long, long way off and we probably won't get back anything like what we paid into it. We also forego future rental income, but it would mean a tidy lump sum - which could go towards clearing the mortgage on the family home.
3. Hold onto it as a pension until well into retirement, maybe only selling once there's a need, e.g. for nursing home care. Depressing to think of this as we're only 40, but the future isn't going to just go away!
4. Somewhere in between the options above.

I'd be grateful for any comments or suggestions. Thanks!
 
I'm lost on your figures, is the total mortgae cost circa 1K per month. You won't 'gain' this back if you sell, as you've got rental income that is also contributing.

This mortgage is costing you little or nothing, how about stopping overpaying there is no benefit to you in doing this.

I would consider the property as a saving, it will give you rental income eventually or an asset to sell.
 
I'm lost on your figures, is the total mortgae cost circa 1K per month. You won't 'gain' this back if you sell, as you've got rental income that is also contributing.

Sorry, you're quite right about that. The figures I put in bullet points are correct, but the conclusion I drew in option 1 is not.


This mortgage is costing you little or nothing, how about stopping overpaying there is no benefit to you in doing this.

Surely there is benefit in steeply reducing the capital sum now while we have reasonable earnings and interest rates are low? I know it will take a while before they're back up to 4-5%, but it will happen eventually, and we'll owe a lot less by then than if we hadn't overpaid...
 
Surely there is benefit in steeply reducing the capital sum now while we have reasonable earnings and interest rates are low? I know it will take a while before they're back up to 4-5%, but it will happen eventually, and we'll owe a lot less by then than if we hadn't overpaid...

Yes but if you weren't overpaying the mortgage now you would be saving that money each month instead and then if interest rates rose later you'd have the same lump sum to pay of a portion of your mortgage.
In the meantime, you have the funds available to you in case an opportunity/emergency came up (and you'd be able to match your mortgage rate in interest earned anyway).
 
Stop over paying the mortgage. With interest rates so low there is no advantage in doing so. This is madness.
I made one mortgage overpayment lumpsum back in 2008. €12,000. Granted my monthly repayments were €1,400 back then whereas I'm paying €857 now, but I regret it to this day.
 
I appreciate the comments about overpaying. While I disagree, it's always healthy to hear opposing views.

My question really though was to do with what your opinions are on when we should eventually sell the property - be it when the negative equity is cleared, when the mortgage is cleared, or when we're headed for the nursing home!

What are your views on that question?
 
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