Selling investment property in D6

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elainem

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I got offered 400k for a 2 bed house in Ranelagh - it's an investment property that was rented. I refused the offer - am I mad? I didn't have the house for sale, I was approached by the underbidder in the house three doors up from me - the other house had 3 bedrooms.

I never even thought of selling the house, and had planned to put an attic conversion in to make a third bedroom for rental purposes.

Any comments welcome.
 
Well you have put the entire in writing and you don't want to sell ?? You're going to have to make up your own mind on this one. If you want more tell the intended buyer, Otherwise do the renovations and get on with it.

As soon as the Banks realise that they are going to have to deal with the mortgage issues, the market has the possibility of going into another tail spin.
 
This is a question only you can answer - the answer depends on loads of factors:
- how much is 400k worth to you? If I got 400k it would allow me to pay off my mortgages and have enough money to start my own business, which is something I'd love to do.
- how much is the outstanding mortgage.
- how much extra would the house be worth if you added a 3rd bedroom.
- whats your current rental yield
- are your current tenants good - how long are they likely to stay

All these factors will determine how strong that offer is.
Good luck with it - it's a nice problem to have.
 
Selling an investment property in D6

Mercman - what do you mean re mortgage issues and property going into a tailspin again? Are the banks not increasing their mortgage lending again, and isn't property in Dublin going up - though slightly - at the moment?

Macstuff - there is no mortgage on the property - I have owned it since 1984. It would cost e19,000 to put extra room in the attic - and I would get about e200 per month more in rental income.

I'm just a bit flummoxed that someone in this climate has approached me directly to sell my property!
 
elainem said:
Are the banks not increasing their mortgage lending again, and isn't property in Dublin going up - though slightly - at the moment?
Click to expand...

If you read certain newspapers you'd think property was continually on the up. On a serious note, the only property holding it's own seems to be family homes (I don't think a two bed would count), particularly in parts of Dublin.

If you've no mortgage on the property you are no doubt paying full tax. The question you should be asking yourself is would the 400K, plus the 20K renovations going to give you more of a return on taxed rent than elsewhere, (that's without talking about capital appreciation or depreciation which as you know we cannot discuss on here)
 
I think Brontes point is most relevant and it's one of the points I was trying to make. What is the rental yield?
Would you be better off taking the offer, paying any taxes owed and then investing the balance?
Would you get the same or better yield?

If it does, then do it! You'd be free of any hassles associated with being a landlord!
 
Selling investment property in Dublin 6?

Tlanks Macduff and Bronte. I appreciate the advice. As it stands the rent is e1400 per month. If I had a third bedroom - I would probably get 1600/1650 per month - there would still only be one bathroom and one open planning living area.

If I take the offer and invest, I would be looking at government savings bonds. I'm still undecided. The third attic bedroom woiuld cost e19,500k. I need a new boiler and some other bits and pieces which would be around 5k.

The property tax would be about 700 per year. I also pay a letting agent - I don't want to be called up late at night when I have youngish children. So there is about 200 knoked off the rental income, and another 1500 put aside for maintenance per year, plus 550 in insurance, then USC and PRSI at 7%. I have S.23 relief so no income tax at present on rental income.

I intended the propertyy to be my pension, as I won't really have one due to all the time I took out of work for children, but I also never expected to be hit with property taxes, USC's and PRSI on rental income.

Thanks again for advice.
 
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