Relocating Dublin to Galway - Sell or Rent our home

E

EddieB

Registered User
Messages
10
Personal details
Age: 40
Spouse’s/Partner's age: 38
Number and age of children: 1 (3.5)


Income and expenditure
Annual gross income from employment or profession:
€75,000 + 10% bonus
Annual gross income of spouse:
€36,500

Monthly take-home pay
Approx 7k

Type of employment: e.g. Civil Servant, self-employed
Private sector

In general are you:
(a) spending more than you earn, or
(b) saving? - approx 1.5-2k monthly (we've tried our best this year to maximise this to be in a decent position to relocate west)

Costs:
Creche - after ECCE approx €650 now

Summary of Assets and Liabilities
Family home worth €400k with a €245k mortgage
Cash/savings of €50k (split at present between Trade Replublic (15k - 4% interest) and PTSB (35k - 2.5% interest)

Family home mortgage information
Lender: BOI
Interest rate: 4.15% fixed (11months remaining)

Remaining term: (Original term is not relevant) Just under 30years
Monthly repayment: €1,190

Other borrowings – car loans/personal loans etc
Do you pay off your full credit card balance each month? Yes

Other savings and investments:
Do you have a pension scheme?
Not joined just yet, just through probation hence enquiries now issued to join (5% employer/employee) Im late to the party here so will do what i can to maximise.

Do you own any investment or other property? No

What specific question do you have or what issues are of concern to you?
We are about to move from Dublin to Galway, we want to be close to family and support with the little lad and wanted to get there before he starts school. Well my wife has managed to secure a new job starting in December. I work from home most of the time and will continue to come to Dublin about 1 day a week, 2 max. We have been working with a broker and have secured a further 3.5times combined salary to try buy in Galway. Hence we are wondering if it is best that we either sell our Dublin home or rent it out (neighbour just sold for just over 400k in the last few weeks). Other option is my brother is interested in taking a room but we'd be short about €250-300monthly on the mortgage but it would allow me to have somewhere to stay if im doing a stay over for work. Its beside DCU so will never have much issue renting if i needed to and it would allow for a possible future place for our lad if he ever decides to go to college in Dublin.

To help with another house i do have option of a 30k gift from my folks to help with deposit bringing deposit to about 80k.

Wondering what people think regarding sell or keep!?
 
Personally, I would sell. I am a landlord. The only reasons it makes some sense are that I have no mortgage on the rental property and, as it is close to us, it's easy to manage. I would not take the risk otherwise in the current environment. Property prices are high and there is a lot of uncertainty about future regulations. I think you would be better off selling, reducing your mortgage on your personal home and maximizing your pension. But it also depends if you really need it for your personal use and work. I am currently keeping mine because my children are nearly adults and will probably need it in the next 5 years. We also have no mortgage, savings that allow us to weather some storms, and maximized pensions. Despite this, we were extremely close to selling.
 
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Do you want to be a landlord at the other end of the country? What are you going to do if the tennants ring looking for something to be fixed in an emergency? FInancials are only part of the issue here. Personnally, I'd sell now
 
A couple of thoughts:

Are you 100% sure this is a permanent move? Are you both fully 100% committed and is the support going to be there for you ie have you discussed it with family as to what you would like it to be like? Or are you thinking of a safety net of being able to return if things don't work out as planned, both family wise and also work wise for your wife as her work will change?

If you got offered a promotion or a new job that required more in office time (and I think the higher up you go the more that expectation is) would you accept it and expect to spend more time in Dublin, therefore needing a place to stay? Or would these opportunities be available to you in the west or somewhere eg Citywest that might be manageable for commuting?

Do you anticipate unpaid maternity leave in the next couple of years if you grow your family or could you ever become a one income family if your family grows, even if you have support for childcare? Have you considered the resulting cash flow issues this might have if you had non paying tenants at the same time?

How commutable to eg Limerick or Galway colleges will your new home be for student years down the line? Very few courses are only available in Dublin and I would say none only in DCU (but open to correction) and even those currently eg Vet are being expanded. So if thinking 15 years plus I would be thinking suitability of your new home more so than your current Dublin one for college.
 
Thanks for responses

@thedaddyman my folks are in Meath and I know my father would assist wirh any real emergencies, he has a few properities himself so would be used to such scenarios (that said he hasnt had too many issues through the 25-30 years he has rented out places, one of the lucky ones it seems). We get on well with the current neighbours some of which are in trades so worse case i could set something up with them, that said ill be in Dublin every week anyway. If i had to come as an emergency id move work things around to suit that day anyway.

@Premos, i understand we'd be roughly breakeven after tax on the rental income (rents around for similar are about 2200-2500pm) and hence take on risk of things breaking and requring works alright. We seemd to have bought at an ok time in that the sale price around is about 80k over what we paid hence i am aware we'd have to pay Capital Gains if we sell down the line rather than in the forseable future.
 
EddieB said:
hence take on risk of things breaking and requring works alright.
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It's not a risk, it's a fact. you will have general maintenance and you will need to replace things. So far this year, we changed a washer dryer, 2 ventilation systems, curtains and blinds, had 2 plumber visits, changed a seat, and 3 mattresses. We changed renters so that explained some change of furniture. But the plumber, the ventilations, and the washing machine were unexpected.
If you just break even, I do feel that you would put your family under cashflow pressure.
The capital gain tax is also a big issue. Prices are currently high and might plateau. It means that you are going to pay additional capital gain tax each additional year you rent for perhaps a limited increase in the value of your property. We have the same issue.
 
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Yeah once we go we're gone, there are cousins, aunts, uncles etc and we spend about 2 weekends a month as it is there, the other 1/2 weekends we're generally gone to other family my wife's side in Leitrim. ie we spend ery little time as it is in Dublin. We both want to hae him grow up in the countryside, haing both had such upbringings.

Im quite lucky in my role in that I work wherever, those even beyond me are scattered all across Ireland. I also actually have a safety net in that im on a career break from Civil Serice (2 years remaining) that i would go back to 60k salary with safety net of it being possible to relocate it to Galway.

No plans to grow the family.

We are looking at buying within 15-20km of Galway so wont be far from NUIG etc anyway.
 
I'd definetly sell and take the CGT free sum and off to Galway without a tenant care inthe world.

The current laws are not favorable to landlords compounded by the RTB having anecdotal bias in Tenants favor.

We looked at rental market many times here and the juice just ain't worth the squeeze.
 
Some good advice being given regarding the move from Dublin to Galway and selling or renting your "old" home.

@misemoi posted:-"Are you 100% sure this is a permanent move? Are you both fully 100% committed and is the support going to be there for you ie have you discussed it with family as to what you would like it to be like? Or are you thinking of a safety net of being able to return if things don't work out as planned, both family wise and also work wise for your wife as her work will change?"

If you are in any doubt about the move I recommend renting a house in Galway for a few months (if you can find a rental).

But, to answer your main question:- If you've decided on Galway being your forever home I recommend you sell in Dublin.
 
I am in the "sell" camp as well.

But I would not let the potential CGT liability be a factor.

You have not given us the figures.
But if you bought the house 10 years ago for €300k and sell it at its current price of €400k in another ten years.
Your CGT will be €100k@ 33% x 10/20 = €16k

If you decide to keep the house for 2 years until you see how things pan out and then sell it for €400k
The CGT liability would be €100k @33% x 1/12 = €3k - so just not a factor.

Brendan
 
EddieB said:
I work from home most of the time and will continue to come to Dublin about 1 day a week, 2 max.
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EddieB said:
Other option is my brother is interested in taking a room but we'd be short about €250-300monthly on the mortgage but it would allow me to have somewhere to stay if im doing a stay over for work.
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This seems to me to be the main factor.

If you sell the house, where will you stay in Dublin? It is very expensive.

It would be nice to have your own home to stay. Especially if your brother is renting one of the rooms.

If it's a three bed house, you could rent out two rooms.

I don't think that the Rent a Room would apply as your main home will be in Galway.

So you need to crunch the numbers carefully.


Brendan
 
Thanks Brendan

Bought house in 2018 and have lived in it since for 325k. It is a 3 bed. Current sales around are 390-420k for very similar. We'd hope to get oer 400k as our garden and shed is quite a bit bigger than most.

Yeah i'm aware as its not PPR that i couldnt avail of the rent a room scheme. I have a few options regards places to stay so dont necessarily need my own room, my folks are within suitable distance to Dublin as well as options at friends.

Current thoughts are to sell as renting it would just about coer mortgage but with the additional costs of repairs etc wouldnt be covered. I dont see the value climbing too much for the forseeable future. 80'ish k increase in our 5 years here is considerable enough!
 
Leper said:
Some good advice being given regarding the move from Dublin to Galway and selling or renting your "old" home.

@misemoi posted:-"Are you 100% sure this is a permanent move? Are you both fully 100% committed and is the support going to be there for you ie have you discussed it with family as to what you would like it to be like? Or are you thinking of a safety net of being able to return if things don't work out as planned, both family wise and also work wise for your wife as her work will change?"

If you are in any doubt about the move I recommend renting a house in Galway for a few months (if you can find a rental).

But, to answer your main question:- If you've decided on Galway being your forever home I recommend you sell in Dublin.
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Thanks, yeah we wll make Galway work no matter what to be honest. We've wanted out of Dublin for a long time.

Finding it very difficult to fnd someone to rent at the moment alright! Not helped with having a dog who might have to go to family for now!
 
A contrarian view

Myself any wife moved to Galway in 2005, rented in Oranmore for 12 months until we found where we wanted to base ourselves. We owned a house in Dublin and still do. We held onto it with a view to possible kids college in the future, also an investment - it is in a nice location near the Dart, parks and the sea. My wife is from Dublin, we'd never move back - so go for it.

My experience of renting a number of properties over the years is that very little of the doomsday scenarios happen. You vet your tenants well, be fair and straight and fix any issues immediately. Generally it has worked well for us, hopefully that continues.

Yes, being a landlord can be a pain at times, yes the public narrative is negative, yes SF will probably get into power in 2025. Yes it is a risk, so is crossing the road or getting into your car.

However, you have an asset that usually will hold its value (barring the 2008 crisis) and usually appreciates over time. Not near enough properties are under construction, we need 60,000 per annum, they are building 30,000. The population is expected to grow by another 1,000,000 in the next 20 years. They will never catch up in my opinion.

Yes, there are many other places to spend/invest the money if you sell, or possible be generally mortgage free in Galway.

However, most people look to build their wealth in their working lives to give themselves financial security for the future. You could look at this property as one way of helping you on that road.

Just my opinion. Do what your gut tells you.
 
I agree with MG on this point of view. I live in Mayo. Bought a rental property in Dublin in 2010. Rented it to many different folks since with little difficulty. It is now worth 3X what I bought it at and still giving reasonable rent. I have tried to treat tenants fair and have had that returned in spades... so far!! (hope not tempting fate). I would look very seriously at retaining this property.
 
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