Should I sell my apartment

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Learner2015

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Hi all,

I have been a longtime reader but this is my first post. I have done a good bit of looking around at other threads and can see a lot of people in the past have asked the question I am going to. Unfortunately at lot of the answers are quite technical and I find it difficult to make sense of some of them - my issue not the people trying to help!

I have owned one bed apartment for 9 years. 21 one years of tracker mortgage left which is 0.95% above ECB. Outstanding balance is €153k (bought for around €385k)and on a good day I believe I could sell my apartment for €210k (One sold in last month for this amount). I have it rented out for the last 3 years and currently get €1100 per month. I pay all my taxes, reg with the PRTB etc. Mortgage with AIB, I never informed them but my mortgage contract does not state anywhere it has to be my PPR in so far as I can tell, only my letter of offer did.

My wife and I are renting a property with our son but now want to buy a house. The equity I would get from selling the apartment would mean we could buy this house now instead of having to save for another year or more to get our 20% deposit.

FYI we have a second investment property on a tracker as well but it is negative equity and we are happy to sit in this for another 10 or 15 years.

I have asked a lot of people and everyone has said you should keep the one bed apt cause of my tracker but to me it seems like a very simplistic view, surely there is more to consider and what is the best for my family i.e the stress of having 3 mortgages!

I would appreciate everyone's thoughts on what they think I should do but please bear in mind when it comes to detailed yield calculations etc I am at a loss and don't really know what that really means!

My heart says sell the apt, get family home and be done with it but my head is confused because of all the conflicting opinions out there.

Sorry to be so long winded but want to give everyone a clear a picture as possible of my situation.
 
You probably need to provide some additional information.
What mortgage rate is the second investment property at - how much do you owe and how much is it worth?
How much do you and your wife earn? What is your monthly outgoing?
How much will you be borrowing to buy the new house and how much rent are you paying at the moment?
How much do you pay per month for the 1 bed apartment, how much are management fees?

It will come down to affordability.
 
Hi Dereko,

2nd invest prop is at 1,15% above ECB, €280k owing and worth €180k.

Combined earnings 140k - both secure long term jobs. Outgoings are just the usual, clothes and other items for the child, petrol, food, socialising etc, we have no other loans or credit card debts. Rent we pay at the moment is €1200 and we save €1000 per month and have about 60k in savings.

Would be borrowing 320k (house of 400k) if we keep both properties and probably 360k (house of 450k) if we sell the apt not in negative equity.

Mortgage on the one bed is a bit under €700 and mgt fees of €1600 per annum.

Thanks for taking the time to come back to me. I am hoping someone will put forward a really good reason to sell the one bed, use the equity to buy a house now but need to not let my heart rule the head if you know what I mean!
 
Only you can make this decision.

You need to sit down & draw up a spreadsheet with all outgoings for the three potential properties.
Build in interest rate rises of at least 2% and run your calculations again.
How comfortable are you that you can maintain three mortgages without difficulty? In good times & bad?

Do you want to wait to save a deposit?

Do you want the hassle of being a landlord with two properties?

I've said this before on AAM - I looked at doing something similar last year & it was do-able. We had a lender willing to let us do it. We would have ended up with three rental properties, all in positive equity with rent covering the mortgages. But when I really dug down into the numbers I realised that we'd have a large 90% mortgage on our own new house at an SVR, more outgoings & a higher tax bill. We decided that living a life with a comfortable amount of spending power was more important to us than having another investment property. Less hassle & more disposable income.
Plus while interest rates are low what looks fine may not be fine in the future & we decided to be sensible. We won't be property moguls but we'll live an easier, less worried life.
 
Butter thanks for your post. Tbh I really am more on your train of thought.

I will crunch the numbers again and am sure the result will be financially it is doable and makes more sense on paper. A lender has already indicated they would be happy to provide a mortgage for a new house with us keeping either one or two investment properties.

Being a landlord is not my profession, in fact I get no enjoyment from it and once I pay tax, mgt fees and other bits and pieces the income it provides is negligible.

Everytime I think god I have two mortgages I panic so I can only imagine what I'd be like with three!

Hopefully someone will post here with some amazing formula, the result of which clearly states I should sell the apt!!!
 
I have one more question for everyone.

If I do decide to sell the apt and present myself to AIB saying I want to avail of the tracker retention rate for the balance of my mortgage will they turn around and say you never told us you were renting it and try and get me to pay back the difference between my rate and the investment rate?

My contract has nothing about PPR in it although my letter of offer does. However it does not say anywhere that if I rent it they can change my interest rate just that I need permission in writing if I am leasing it?
 
Learner2015 said:
Being a landlord is not my profession, in fact I get no enjoyment from it and once I pay tax, mgt fees and other bits and pieces the income it provides is negligible.

Everytime I think god I have two mortgages I panic so I can only imagine what I'd be like with three!

Hopefully someone will post here with some amazing formula, the result of which clearly states I should sell the apt!!!
Click to expand...

A formula doesn't have to be numerical!
 
Mrs Vimes very true and thank you. Now to figure out best approach to get AIB to let me transfer my tracker even though I have been renting it for the last few years.

Any advice her would be greatly appreciate too!
 
Why would you even need to tell them you've been renting it if you are going to sell?
 
Hi Butter. My tracker is with AIB and I would need to get my new mortgage from them in order to port it over.

I assume when assessing my wife and I for the new mortgage (we both bank with AIB too) they will ask her what is the €1200 that comes out of her account each month (the rent we pay) and what is the €1100 that comes into mine (rent we receive).
 
Yes, sorry, I wasn't thinking of the paper trail.
You really need someone who has been in this situation before to comment on what happened when they approached AIB.
One possibility may be to move back to the apartment for six months. Not ideal maybe but it would wipe out that paper trail in your bank accounts.
 
Butter yes moving back in might help but just wouldn't work with my family situation which is the reason we rented it out in the first place.

Hopefully as you suggested someone with a similar experience might post what they did / happened to them to give me a better insight.
 
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