Banks no longer lending for investment properties. Keep my infinite int-only tracker?

I

ipad

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Would be v grateful for opinions. Have an investment property that is currently valued at 300k, mortgage is 260k and is on an indefinite interest-only tracker rate of .85 above ECB. Current payments work out at approx 440 pm and rent received is 1200pm. Property is approx 30 years old and needs considerable updating.

Property is on the market and I've received an offer of 265k which would just about cover the borrowings (but not CGT/fees etc).

My dilemma is that the cost of borrowing will never again be so low, I'll never again get a tracker and the banks are only lending about 70% LTV on PPRs. I don't think they're lending at all for investment properties.

So given the above, and the fact that the property gives some yield versus the cost of borrowing, does it make financial sense for me to sell my investment property (at what may well be a knock-down price) or keep it as it was intended, as a long-term investment?

I know much depends on property/rental prices in the long-term etc, but trying to take that element out of it, what would you do?
 
Tricky one. But you are on interest only and how long will the bank allow that? If you have to repay capital plus interest then what do the numbers look like?

If it looks like you will need to put considerable money into the place to maintain it, and you hold the view that property prices are going further south, then I would bite the hand off that person who is offering 265.

Its true that the cost of borrowing will go up but you are only paying interest only and thats a concern I think. Would you have any CGT if you sell at 265?

Also, what age are you? If you are heading towards retirement I think it make the decision easier to sell now rather than having the hassle of being a landlord and also the potential of negatve equity and not being able to sell.
 
It's indefinite interest only for life of the mortgage according to my mortgage agreement with 20 years left on it. When I say it needs updating, I mean new kitchen, bathrooms etc but nothing major or structural. Don't mind being a landlord and am early thirties. No more than a couple of thousand in CGT at the mo I think. As the wife pointed out, the house currently costs less than the car and brings in money too!
 
So you only have to pay the capital when the mortgage ends in 20 years. You would safely guess that the price you get in 20 years time will be more than 260k given the time value of money and inflation.

Now I am swaying the other way and thinking its a no brainer to keep it as 440 a month isn't crazy. Can you afford to pay that for a few months if it cant be rented?
 
Absolutely. On very good salary and job very secure. Will be looking for investement opportunities in the future so trying to take a long-term view.
 
If you can take that long term view and are happy to be a landlord over that time then I think you have a good investment. You don't sound in any financial difficulty so it is indeed a no-brainer to me. Don't know if anyone has different views.
 
No brainer. I spent €440 on booze and fags every month.

€750 a month income (minus taxes etc)
or
sell it and keep nothing.
 
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