hello all,
hoping you could help us decide what's the best way to go with our situation, using your experience and wisdom
Entry data:
- we own a property that is valuated at around 430-450k now (no mortgage)
- we need a bigger space (+1 bedroom), which is why are looking to upgrade the house/apartment
- we got mortgage approval for 520k
- we are looking into 3 options:
- buying a second property and keeping the existing one. Getting the mortgage of 520k
- selling the existing property and buying a bigger property in the same area (+1 bedroom). Getting the mortgage of 30-40k
- selling the existing property and buying a bigger property in an area closer to work, school and creche (which are unlikely to change in the upcoming 15 years, read = quality of life, no commute) Getting the mortgage of 300-350k
Questions we need to answer (hopefully with your help!):
- If we keep the 1st property, we'd most likely rent it out. While the income would be about 2200-2500 per month, after tax it would be just 1100 - 1200 (would not cover the full cost of mortgage repayments for the second property). Renting a property is a hassle (what if someone does not pay, equipment breaks, additional tax adviser fees etc). Is this income worth the hassle?
- If we sell the 1st property, then, obviously, when we pay out the mortgage on the second property, we'd have less overall assets, than what we'd have with 2 mortgage-free properties. Is the assumption correct, or we are missing something?
- quality of life vs. the cost: is it totally insane to be "paying" for the quality of life (like less commute, bigger garden, more space)?
thanks in advance for all your insights.