Change is living circumstances -to Sell or not

Hi All,
I was jsut looking for some advise on my situation.

Myself and my husband bought an apartment 8 years ago for 210K Mortgage left on it is about 150K interest rate is 2.75% month payments circa 950 per month. There are 17 years left on this Mortgage.

We are in the process of buying a house for 230k over 25 years variable rate of 4.5 monthly repayment of circa 1200.00.

We had said that we would always hold onto the apartment as I am self employed and we always looked at the apartment as my pension as I will have nothing else. The more I look into renting out and declaring the rental Income I am not so sure if it is infact in out best intererst to keep it and we will have to pay tax on the income. The Rent received will just cover the Mortgage mgt fees LPT etc but as you are only aloud to ofset 75% on the interest we would end up paying 2/3 in tax on it.

As the apartment is in Dublin if we where to sell the apartment I think we would get near enough the 210k we paid for if not this year maybe in a couple of year.

Anyone got any advise or experience of this situation. Do you think we would be better of selling and cutting out losses?

Thanks so much for your time.

When you say the interest rate is 2.75% , is that a tracker e.g. ECB + 2.7% . It seems too high for a tracker and too low for SVR.

If it's a tracker, who is the lender? They may allow you to sell the apartment and move the tracker rate (+1%) to your new home. This would seem the best solution.

Brendan

What about getting a couple of auctioneers in to give you an idea o why you might get. If your happy with what they say market the property. Have a figure you will not sell below (I'd be thinking what you paid for it based on if auctioneers gives that general ball park figure). Use the profit to reduce new mortgage and as Brendan suggested can you move your tracker if indeed it is a tracker. Takes pressure of being a landlord, paying more taxes and you could save the €300 approx plus in difference in getting lower mortgage. That would give min €90k pension fund at end of mortgage period.

Thanks so much for the replys.

For the apartment its actually an affordable house purchased from the City council hence the variable rate of 2.75.
The value now is circa 170k so I feel if we left it another couple of years we might get back what we put into it, but also like the idea of holding onto it for the reminder of the term as this will be an income for my husband when he retires. But on the other hand the tax each year is going to increase as the interest portion reduces so therefore it could end up costing us alot but what I am wondering is this a good way to hold onto the investment and have something in 17 years time rather then selling now and putting circa 20/30k off our mortgage as this wont make a huge difference to the monthly payments but if we take the long term pain in 17 years it would be a good little income earner and could assist in funding kids through college...

Make up the maths on the apartment on it's own. Take rent minus two months as a starting figure, deduct all payments like management fees, insurance etc. Then deduct the tax payable. When you have this figure it's easier to join the dots. So say at the moment, it costs 2k per annum to hold on to it and you are paying 5k off the principle then the gain is 3k. Given these rough figures work off that and see whether it's worth hanging on to. My bet is that it is worth the punt.