Sell or keep buy to let?

Ryan98

New Member
Messages
4
hi, I wonder if someone can point me in the right direction about what to do with a second property which I own. This is my current financial situation

1st property
Purchase price - 265000
Value approx today - 210000
Rate - tracker +1.15%
Term left - 23yrs
Mortgage - 188000 approx 750pm
Rent - 1000pm

Second property
Purchase price 420000
Value 420000
Rate - fixed 3%
Mortgage - 325000

My question is, is it time to sell my first property or continue to rent it? The tenants I have are dream tenants and had no issue renting it. I have yet to pay rental income tax as this is my second year of renting so I'm not 100% sure on my tax bill. I'm reluctant to sell solely because of my tracker rate but if it doesn't make financial sense to hold on to it I'll sell. Porting the tracker to my new house didn't benefit me at all as the bank were looking to add 2% on top of my current rate.

I don't mind the hassle of a being a landlord and the extra work. So do I hold on for a couple of more years because of my cheap tracker rate? Which I know won't last forever!

Hope that all makes sense.

Thanks
 

Sarenco

Frequent Poster
Messages
6,265
You only have around €22k equity in the rental. Cashing that in and applying it against the PPR mortgage would only save you €660 in interest (€55k@3%).

I would be very surprised if your rental doesn't produce a net, after-tax, profit well in excess of €660!

As a secondary issue, your rental could appreciate by around €55k before CGT becomes a consideration.

So, on the face of it, you should hang on to the rental.
 

cremeegg

Frequent Poster
Messages
3,316
I would agree with Sarenco above.

So do I hold on for a couple of more years because of my cheap tracker rate? Which I know won't last forever!
I don't follow this. The tracker rate lasts the life of the mortgage, no?
 

Ryan98

New Member
Messages
4
Well I'm assuming at some stage my ecb rate will go up thus increasing my tracker rate. Or am I assuming wrong?

If I was to pay the 22k off my ppr mortgage do I not save 27k on interest over the life time of the mortgage?
 

Ryan98

New Member
Messages
4
Presuming that the concern is that its relative cheapness doesn't last forever...
Yes. This is what I'd assume but I suppose its better to cross that bridge when I come to it.

Thank you everyone for your reply. So keeping the property is the best option at the moment or do anyone else have a different opinion?

Obviously with covid its hard to know what way the property/rental market will go.
 
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