Should I sell none / one / both Investment Properties

Jazzy

Registered User
Messages
14
Hi all,

Looking for some advice regarding my current financial situation.

Current situation:
Married with no kids. Living in a detached home in the country with a tracker mortgage of €200,000 (1.45%) and variable of €10,000 (4.58%). Tracker mortgage has 30 years remaining and variable has 4 years remaining. to Service these loans we currently pay approx €850 per month. I work in the public service earning approx €60,000 per year and wife works in private industry earning approx €18,000 per year. We have savings of approx €30,000.

Prior to meeting my wife, I owned a rental property (3 bed semi) in west Dublin which I had bought in June 2002 for €200,000. I paid something like €5,000 stamp duty and legal fees around that time. I had lived in this property for three years to approx 2005. Mortgage on this property is currently €135,000 with monthly repayments of €985. Property is rented to same tenants for last eight years and they pay €1,000 which i know is currently below the current market value. currently 18 years left on this mortgage

In September 2005 I bought another home in west Dublin,this time a four bed semi. I paid €345,000 and €23,000 stamp. I lived here until May 2011 and it has been rented since. Current mortgage stands at €279,000 and repayments are €1521 per month with a rental income of €1200 coming in per month. 26 years left on this mortgage. House rented to a family, again probably below market value. collecting rent here at times can be difficult.

Mortgage on both rental properties is variable at 4.58%.

I spoke with an auctioneer on Friday and he advised that he could
1: rent both houses for approx €2650 (€1400+€1250) per month and manage same for a 6% fee + vat or
2: believes he could sell both houses for €235,000 and €300,000 respectively.

So my question is do I sell one, maybe the three bed semi and use the near €100,000 equity towards paying off the big mortgage on the four bed or do I sell both. giving myself the same €100,000 but with no debt to service and headaches.

If so, what do you advise I do with the €100,000. I don't see the benefit of paying off the tracker early and yet I don't want to waste the money either by drip spending or investing where interest is very low.

I appreciate all this is hypothetical until i have the money in the bank, but I'm looking for guidance should I decide to sell / keep or whatever with the rental properties.

thanks for reading and any advice would be appreciated.

jazzy.
 
Have you worked out the CGT element?

Better a lower rent than the market rent. Better a reliable tenant long term than a new tenant.

I'd avoid agents.
 
Yes, from what I have studied on revenue.ie I believe I may have a bill of about €3,000 cgt. Nothing on 4 bed as technically I'm selling at a loss.
 
The loss can be offset against the gain so you'd have no CGT at all. What would you do with the 100K?

Is it the stress of being a landlord that is making you think of selling?
 
yes, a number of things. suppose one part is stress. every 7th day of each month i have an outgoing in excess of €3,300. collecting rent not always that easy. also putting money towards payment of mortgage on the rental properties is eating into cash that i believe could be best used elsewhere and can leave things stressful at home. payments to revenue at end of year, although making a loss on property with only 75% of interest relief been written off and other expenses i find that i still owe revenue about €2,000 each year.

This time last year i was in serious negative equity. property appears to have risen now putting me in this position and i think it may be the right time to get out.
 
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