Income | |
Rent Received | €19,023 |
Expenses | |
Mortgage Interest | €224 |
Repairs & Maintenance | €1,255 |
Agent Fees | €1,872 |
Management Fees | €1,450 |
Insurance | €105 |
Mortgage Protection | €75 |
PRTB | €90 |
Other | €295 |
Accounting | €250 |
Total Expenses | €5,616 |
Net Rental | €13,407 |
Capital Allowances | €0 |
Rental Profit | €13,407 |
Surely you’re going to fix again or switch provider rather than accept a ridiculous rate of 4.3%?
Is it a decent property (the rental)? Did you live there, so is there some sort of CGT shelter from the PPR Relief? What did you pay for the place?
All the more reason to sell now - you will pay CGT on any capital gains from here on (although PPR relief will help a bit).I paid 300,000 for it in 2007 and yes lived there for about 3 years.
Thank you. I really appreciate the advice.
Some reasons I am hesitant to sell...
(1) As the tracker rate is so low and we only have 2.5 years left on the mortgage, the money borrowed is very "cheap".
(2) It will be a source of income in 2.5 years - even though I have to pay approx 50% tax every year - I'll still clear about 11,000 after tax every year.
(3) Suppose we never sell it and see it as a pension source when we retire, we won't be liable for CGT.
In summary, it seems like we only have to invest 2.5 years of borrowing cheap money to have an asset that will generate 11,000 every year.
After tax, you are currently netting around €6k on the rental. That won't change materially after you pay off the small remaining balance on the rental mortgage. Again, it's important not to confuse profit and cash flow.In summary, it seems like we only have to invest 2.5 years of borrowing cheap money to have an asset that will generate 11,000 every year.
It's specific to the OPs circumstances: "yes lived there for about 3 years.""Having said that, 11 years from now, 1/6 of any gain will be tax-free so it’s not to be sneezed at"
Hi gordon, can you explain this statement please as I dont understand it?
thanks.
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