Sell or keep Rental Property?

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Always_Broke

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Hi, any help or advice appreciated..

I own a house in Wexford that I rent out. As it is in Rent Pressure Zone the rent is lower than the norm.

The question is.. do I keep the house as a pension backup or do I sell now and use the money somewhere else to invest?

House - bought in 2006 for €210k / worth about €210k now (after coming back up from neg equity)
Current Mortgage : €890 per month
Rental Income: €900 per month
Mortgage Interest Rate: 4.3% with 20 years left on the mortgage

Thanks!
 
Assuming your mortgage is interest only and a full write off against tax - even then you have virtually no profit so I'd sell to avoid the hassle and inherent risks of being a landlord.
 
It’s hard to see how you are making any meaningful rental profit based on those figures and any future capital gains will be liable to CGT.

On the face of it, looks like a pretty clear sell.

What’s the outstanding balance on the mortgage on the rental?

Also, do you have a mortgage on your home and, if so, what’s that mortgage rate?
 
In your shoes I'd sell it in a flash.
Yield & headmelt & risk of being a landlord in Ireland is simply not worth it.
 
Thanks everyone. I do separately own my own house that I live in - mortgage rate of 3%. 17 years left on mortgage.
 
Hi All,

Apologies for hijacking this thread, but I would be very interested in the learned thoughts of the members here.

Basically, my wife owns a small one bed apartment in Dublin 6, great location with parking. Value 330k, mortgage 120k, 1.1% tracker, about 12 years remaining. Happy with rental amount, probably at most 5% below market rates and good tenants.

The tenants are consider moving out to a bigger place but no definite plans. This brings into play the option of selling a vacant apartment without having to give notice/do all the RTB stuff. We had intended that it could be used as a starter home for one of the kids in about 10 years time but with the impending changes to the RTB laws and this right of residency of 6 years, we are extremely nervous about continuing to rent it after these tenants move out. We all know it just takes one bad tenant who decides to stop paying rent, and it is basically impossible to get rid of them. If you do get a determination from the RTB, you then have to go to the high court to get it enforced and you are then down serious money. If you get an order for your costs and unpaid rent, you will never see it. Likely the reason they are not paying rent is that they have no money. We are unwilling to take this risk going forward.

I think we have 2 main options.
1. Sell it. Invest the equity for the next 10 years and if we did need to buy a place, there may be enough to facilitate this.
2. Thinking a bit outside the box, we were thinking we could use it for Airbnb. Am I correct in thinking you can rent it for 90 days per year without needing planning permission? If we were to do this, we would probably get 18k/year, which is slightly less than we get currently, but only by 3k. We would be happy to swallow that as the mortgage would continue to be paid down, a small income and increase in asset value (hopefully).

It is mad to think we could get nearly as much putting it on Airbnb for 90 days as renting it for a year but this seems to be the case.

I am really just asking for a sense check. Am I missing something here in terms of being allowed to do this or is this a completely mad idea?

Appreciate the feedback and thoughts
 
Is there anything in your apartment rules that prevents you from using it as an Airbnb, outside of council planning permission rules? Have you estimated the expenses associated with Airbnb (either you pay someone to manage/clean it or you do it yourself so pay with your time)
 
Great suggestion Danny Boy.
No, there are no apartment rules around this. We live close by so could easily manage this ourselves or pay someone to do it if did not suit us to do it.
 
Top tips if you go the AirBnB route.

Scrub every surface within an inch of its life.

Ditch the old curtains, cushions, pillows, duvets, towels.

Clear out the clutter in the kitchen; there's almost always too much stuff.

Take the time to get really good photos.
 
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