please help!

P

pleasehelpme

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last year i released the equity that was tied up in my home to give me money to help invest on a new development. we bought two beautiful houses off plans witch we were going to rent out. the houses are finished and were trying to rent them but the leting agent says well only get 1000 a month witch will come no where our mortage payment. were trying to sell and the idiot ea wants to sell the house for less than we paid. im thinking maybe we should sell it ourselfs to get the real value of it? is this easy?

im sick with worry and just want to get out of this and make my money back. please help me. if you want to buy the lovelyest new house in cork im selling it!
 
The real value is only what a willing buyer will pay for the propery-no matter how beautiful they are, or what you paid for them.

Plase also note that this is not MyHome or Daft-if you want to sell your property online please do it elsewhere.
 
You remortgaged your PPR to speculatively buy two rental properties that are now not viable and you are calling the EA an idiot? :confused:
 
i jsut want some help to get me out of this situation, anything, please.
 
pleasehelpme said:
i jsut want some help to get me out of this situation, anything, please.
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Check what rent the market will actually pay - maybe it's more or less than what the EA has estimated. Consider what sort of capital appreciation you might stand to gain in fugure years (difficult to predict I would imagine). If necessary cut some or all of your losses by selling one or other of the properties. Get independent, professional advice on the tax and investment aspects of your situation. The EA is not the person to be asking for advice on what is the most appropriate course of action for your specific circumstances.

What was your "business plan" and motivation for getting into this venture? It sounds like you never really thought it through to assess the viability and risks.
 
MrKeane said:
Its called negative equity, deal with it.
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You'll hardly win the prize for Mr. Compassionate there !!

ANyway - to the Original poster - when you say he rent won't pay the mortgage.
Is this an interest-only mortgage you are referring to?
Or is it capital repayments as well ?

If it's capital repaymenst then you may think about going for interest only to relieve pressure for a while.
 
Good point.

Interest only mortgage

Are you (the original poster) aware of the tax and other issues relating to being a landlord?

Property Investment FAQ

Remember that you cannot claim owner occupier mortgage interest relief on the mortgage topup secured on your home to buy the investment properties but you can set interest on this against rental income.
 
our mortage only had €60k left on our €800k valued house so using this to invest was a no brainer.

the developer is selling the same houses for €345k, thats the price the price we want but the ea said to sell for €330k. we cant afford to sell for this as we have already lost €40k on the stamp duty.

we need to get out now because we cannot afford the mortage because of rising rates
 
pleasehelpme said:
using this to invest was a no brainer.
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we need to get out now because we cannot afford the mortage because of rising rates
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Not a no brainer after all so? :confused:
the developer is selling the same houses for €345k, thats the price the price we want but the ea said to sell for €330k. we cant afford to sell for this as we have already lost €40k on the stamp duty.
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Your house will be less attractive to non FTBs since they can buy from the developer with no SD but will have to pay it in yours since it is no longer new. FTBs are unaffected but may be happier to buy brand new since they can then get the developer to deal with snags etc. Either way this potential reduction in the pool of demand for your property may negatively impact the potential resale value.
 
Surely not since you bought from the developer already and it already "pre-owned"?

Post crossed with qwertyuiop's.
 
While this is a difficult situation you have no one to blame but yourself. You speculated without doing your homework and used your home as collateral. That wasn’t very clever.

No one here can tell you what to do and in order to know yourself you need to be clear about the situation you are in. Talk to an accountant or even your bank but remember that you cannot control the market. If you do choose to sell then take the first reasonable offer, don't faff about looking for another 5k, it's bugger all in the scheme of things.

The whole thing will cost you about 80-100K to walk away from. That's about €500 per month on a long-term mortgage. Will the shortfall in rent be more or less? Factor in another 1% interest rate rise and do the maths again on the last question. Then factor in another 1% and repeat.
 
pleasehelpme said:
last year i released the equity that was tied up in my home to give me money to help invest on a new development. we bought two beautiful houses off plans witch we were going to rent out. the houses are finished and were trying to rent them but the leting agent says well only get 1000 a month witch will come no where our mortage payment. were trying to sell and the idiot ea wants to sell the house for less than we paid. im thinking maybe we should sell it ourselfs to get the real value of it? is this easy?

im sick with worry and just want to get out of this and make my money back. please help me. if you want to buy the lovelyest new house in cork im selling it!
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Basically you made a bad investment decision.

The EA is not an idiot. So many posters say this when the EA doesn't agree with them or can't find a buyer at what they think there place is worth. He has given you what he believes to be the open market price that your house will get. It's unfortunate that this is below what you paid but that's the way it is. Investments carry a risk. He/She is better placed to know what price the house will get than you.

Going by what you said in a later post, if you sell both houses at a loss then you will have a mortgage of about (60k + 40k + (15k X 2)) €130k. This is a pretty small mortgage which you should be able to cover so it's not the end of the world.

Investments mistakes cost money. I don't see how you can make your money back in the short term. I also don't see why you should make your money back. Unfortunately, you have to pay for this mistake yourself.

New developments attact a developers premium so they can generally attact more than a second hand house. As house prices have stagnated over the last year what you have lost is that premium. Also as already mentioned there's the stamp duty consideration for a non FTB.

Your choice is rent the places and cover the difference between the rent and the mortgages or sell the places and pay the extra mortgage to cover your capital losses. You have to run the figures (with an independent financial advisor) and work out which works best for you. By the sounds of the situation you got yourself into you really really should get independent financial advice.
 
unfortunately, you will have lots of other investors joining you in the same situation in ireland.
obviously you did no homework at all before you bought these properties but again you wont be on your own.
maybe sell your home place and move into one of the investment properties and take whatever rent you can get for the other one.
 
Hi

From the details i have assumed that you have debts of 790k (345 x2 + 40 stamp + 60 original mortage)

Interest only on 790k is 3.5K per month.
Rental income is 2k per month (assuming the 1000 is per house)
Short fall 1.5k (Not taking into account the operational cost of letting 2 houses)

Can you manage this . A loss is only a loss when you dispose of the asset. If you dispose of the assets now you will lose at least 70k.

If i was in your position i would try to hold out for a year or two.
 
Very little you can do now to help the situation...as they say no point in shutting the gate when the horse has bolted. But if i was in your situation i would sell one (whichever you can get more for for) then rent the other to as good a tenant as possible(this is where you need to be very careful and do some legwork unlike day one when you bought!) Hold onto the second property for 10-15 years and manage it as closely as possible. This way goes some way to solving the short term cashflow issues and still allows you a chance to make your money back.....dont worry it seems the only safe place for your money in ireland is a high interest deposit account at the moment after i lost a chunk of an investment today ..apparently due to the rain!!! im sure you can guess what share it was!!...But if you are in for the long haul you will be ok....Inflation is running at almost 5% so even suggesting to people to put money in the bank seems crazy these days!!!! looks like were in for that bumpy ride they are all talking about...
 
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