Relocating - sell home or keep as rental?

[tz1981]

I will to be relocating this year or early next and I'm trying to decide if I should keep my current house as a rental or sell.
I purchased my current house for 50k in 2014 and a renovation of 80k so total cost 130k - currently valued at 160k.
Mortgage outstanding is 72k.
Similar properties in the area are being rented for 850-950 a month.
I'm moving to an area where property is more expensive. My main issue is i won't have a 20% deposit and I'm wondering if banks/lenders
make any exceptions to this requirement. I will have 10%. I had been overpaying on my current mortgage - if i had saved instead I might
have the 20% but it was never my intention to buy a second house or become a landlord.
Current situation
Age 40 single no dependants
salary 69k - civil servant
no debt apart from mortgage
credit card cleared every month if used
pay 200 per month into AVC as i will be short 5 years service on retirement

I was of the understanding that the max i could borrow was 170k as that would bring both mortgages up to 3.5 times income, however i was
chatting briefly to a mortgage advisor and he was of the opinion i could borrow 3.5 times income ignoring the original mortgage as it was
a different lender.

I suppose i'm really looking for a bit of advice around whether I would be better off just selling my current home and using the equity
in that to buy my next house? Or would it be worth my while holding onto it as an investment property?

 

[Brendan Burgess]

Hi tz

You should sell the property. It will make it much easier for you to avail of the best mortgage rates on offer.

It will also allow you to buy a bigger or better located property.

Your priority is to buy a suitable home. Even if someone does calculations to show that you would be €x better off keeping your existing home, I would still sell it.

Letting and managing property can be troublesome especially if you don't live nearby.

The only reason not to sell it would be if there were some realist prospect of returning to live in it in the medium term.

Brendan

 

[tz1981]

Hi Brendan - appreciate the advice - makes perfect sense. I won't be returning in the medium term. I don't want to be a landlord and as you say it will give me more options when buying my next home. I think I just needed to see it in black and white.
Thank you.