What to do with rental property.

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scati

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Hi all, please have patience with me re figures. I have two properties. Classic accidental landlord. Brought second property in 2006 at 315,000. Intention was for retirement.

I am 50, single and public servant.
Rental brings in an annual 15000 rent annually. Hap tenant.
Mortgage is tracker and is 960 a month and i have 20 years left to go. House currently worth around 260000. Have 200000 mortgage left.
My home house is worth 400,000 and also tracker and with 130000 left to pay off in 10 years.

I was intending to retire at 60 but currently have become ill and am about to be retired off. Wondering should sell rental or not. Current take home pay after all taxes in a little over 2000 a month. Thanking all replies in advance.
 
The rental property generates a gross yield of 5.8%. Is that okay? That is a debatable question.

As the interest is so low, the rental profits are large.
 
scati said:
Rental brings in an annual 15000 rent annually. Hap tenant.
Mortgage is tracker and is 960 a month and i have 20 years left to go. House currently worth around 260000. Have 200000 mortgage left.
Click to expand...

Yes, you should keep it.

Rental income: €15,000
Estimated interest €2,000 ( €200k@1%)
Estimated other costs: €3,000
Profit before tax: €10,000
Profit after tax@: €5,000 (Probably higher if your top tax rate is no longer 50% after you retire.)

This is a very profitable investment.

If you sell it, you will have €60,000 cash. If you use this to pay off the mortgage on your home, you will save about €600 a year in interest.

The €960 a month you are paying is nearly all capital. So you are paying down your mortgage quickly.

Brendan
 
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