The Viking
Registered User
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Should I sell the investment property below (and use surplus cash to invest in a pension) ... or hold on to it to try and recover my losses?
I bought a UK investment property 6 1/2 years ago. After 5 years of interest only payments, the loan went to full capital/interest repayments and I immediately fell into arrears. I managed to generate an extra €1,000 a month by getting a second job 18 months ago and I have now made enough payments to get it out of negative equity; so if I sell now, i will owe the bank nothing.
My reasons for selling is that I am under pressure every month to make the repayment. If I sold, I will still have the extra €1,000 cash every month coming in to put towards a pension - of which I have only a tiny one. The property was supposed to be my pension. I'm 45. I feel that by selling, it will reduce my exposure to risk ... and If I can't make a full pension payment every month, at least I'm not damaging my credit rating / falling into arrears / suffering the anxiety that it brings.
However, on the other side, I am going to lose ALL of the money I invested in the property over the last 6 years. Although it rents well, I have still made losses north of €50K over the years due to high service charges, lower rental returns and the fact I borrowed over 90% of the purchase cost. It is a fine property, in a very good rental location, with good potential for capital appreciation over the next 10 years ... but can I expect to reasonably continue making those payments for the next 10 years through a second job etc?
I bought a UK investment property 6 1/2 years ago. After 5 years of interest only payments, the loan went to full capital/interest repayments and I immediately fell into arrears. I managed to generate an extra €1,000 a month by getting a second job 18 months ago and I have now made enough payments to get it out of negative equity; so if I sell now, i will owe the bank nothing.
My reasons for selling is that I am under pressure every month to make the repayment. If I sold, I will still have the extra €1,000 cash every month coming in to put towards a pension - of which I have only a tiny one. The property was supposed to be my pension. I'm 45. I feel that by selling, it will reduce my exposure to risk ... and If I can't make a full pension payment every month, at least I'm not damaging my credit rating / falling into arrears / suffering the anxiety that it brings.
However, on the other side, I am going to lose ALL of the money I invested in the property over the last 6 years. Although it rents well, I have still made losses north of €50K over the years due to high service charges, lower rental returns and the fact I borrowed over 90% of the purchase cost. It is a fine property, in a very good rental location, with good potential for capital appreciation over the next 10 years ... but can I expect to reasonably continue making those payments for the next 10 years through a second job etc?