Wish to build and hold onto existing property

D

DoylerOz

Registered User
Messages
2
Hi there
We have a four bdr detached probably valued about 300k with a tracker mortgage and only 68k owing on it. We want to build locally and would like to do so and hold onto this house as an investment. The mortgage is only €400 per month. Rental income on it could be €1600 per month. Do you think there would be anyway around this and what would we need to do? Would we need a sizeable deposit?

Any advice would be much appreciated and on particular banks to deal with. We currently bank with Ulster Bank.

Thank you
 
What exactly do you want to know and, are you married, working, have children, spouse working, salaries, etc?
 
Hi Doyler,

You rent out your house and say income is 1600pm.
After tax expenses etc you might clear 800euro per month.
Lets say as a rule of thumb your property is rented for 11 months of the year you may pocket 8800 per year. Hopefully no dodgy tenants damage to house etc.Hopefully.
Depending on earnings deposit etc it is hard but not impossible to secure funding. The very best scenario would involve a much higher interest rate.
Less than 8.8k per year on 300k investment what do you think?
Plus paying an extra 1-2% on a new loan. You borrow 200k. Extra 4k per year in interest. Take that off the 8.8k you make on rent?
If you decide to build and you have 300k in the bank cash is king and your new build be cheaper to build and more easily managed ie. not waiting on staged payments from the bank etc.
Just me but go build your dream home and hopefully end up with nothing owing. When you have this done then decide/ consider to invest in property/pension/ balanced portfolio or whatever floats your boat.
Hope all goes well. Hope that is some help/food for thought. Best of luck.
 
Agree fully with DCD.

Don't be blinded by the tracker. A balance of €68k at 1% instead of 3% is saving you only €1,360 a year. And the savings fall every year as you reduce the balance outstanding.

So sell your property and build your home.

In practice, you may prefer to build your home first and then sell your former home.

Ask UB to remortgage your existing home. They might or might not. If they don't, Pepper will probably do so, but of course, you would lose your tracker.

Brendan
 
Thanks a million! I did wonder about what you would realistically clear in profit from rental. Good to hear from people that know what they are talking about. Now to figure out the potential logistics of making it happen! Have a site in mind. But don't want to be homeless in between! Other problem is we don't have any deposit at the moment! Cheers
 
You must log in or register to reply here.
Back
Top