Should we sell second property?

Some of the heavier hitters are on here giving financial advice. But, the subject is a no-brainer. Keep the house, rent it out, reek in the inbuilt profit. Simple !!!!! and keep it simple. As a Tipperary farmer informed me lately having got burnt in the investment game, he said he should have stuck with calves and cows, the business he knows about.

Casper knows about the property he rents out, so don't change a winning team.
 
We also lived in the house until 2004 so that will change the CGT calculation even further.
I also believe the last 12 months of ownership is also deemed to be PPR if you had lived in the house at some stage. I was advised this when I was calculating the capital loss on our one :)

Plus indexation up to 2003
Good point

the OP would be bonkers to sell the property
I guess some of this is a discussion for the OP on whether they wish to be a landlord or not. There are may people who are simply not cut out to be landlords, although if they have been one for 12 years it should be an easy enough decision to make for them. If they dont mind it, then its something they definitely need to consider

...AVCs are the sensible play thereafter.
If I was the OP, I would look at doing a cashflow projection over a number of years, reflecting the cost of education and other major expenses on the family. They are carrying a reasonable level of savings, so that should not be an issue. If they can make 5k after tax, and the mortgage repayments are 580/month, they will probably just about break even cash flow until 2031
*Maybe my figures are wrong here, so someone can correct me if I am wrong*
Rental Income €13,200
Interest expense €1,140
Other expenses estimate €1,500
Tax at 50% €5,422
Profit after tax €5,138

Mortgage Principal €5,820 (580*12 - 1140 (interest calculation above))
Cashflow Negative €682

However, in 2031 (14 years time) there will be a nice income return (~8k assuming lower tax rates) to supplement the available pensions (by around 20%) with minimal cost over the intervening time, as well as an asset for the kids in the future.

I think you are 16 years from retirement (from a comment above), so any income you make over the final 2 years can be placed into a pension so as to avoid the higher tax rates in that window.

But again, it is up to you but you do need to consider cashflow projections and what you would do with the funds if you sold and the return you would get on them.
 
I think GNF's summary is spot on.

The rental, on the face of it, looks like a reasonable long-term investment but it is modestly cash-flow negative as things stand. Given the prospect of having two kids at college in the near future, I would imagine that there will be significant demands on the OP's savings/cash-flow in the near future.
 
Saranco,
Yes immediate and near future cash flow has to be a concern. Also having lived quiet modestly for the past 8-9 years we can see this available lump sum and it can be tempting to cash in, take the holidays, change the car, home improvements etc.
The sensible part of me continues to plan for the future, education, unplanned events like illness or accident.
 
Also having lived quiet modestly for the past 8-9 years we can see this available lump sum and it can be tempting to cash in, take the holidays, change the car, home improvements etc.

That's perfectly understandable and I can certainly see why you are looking at this now given the impending departure of your long-term tenants and before the CGT "bite" becomes significant.

I don't think there is a "right" answer here - it's really a case of trying to strike the right balance between your short, medium and long-term financial needs.

Good luck with whatever you decide.
 
Yes immediate and near future cash flow has to be a concern. Also having lived quiet modestly for the past 8-9 years we can see this available lump sum and it can be tempting to cash in, take the holidays, change the car, home improvements etc.
The sensible part of me continues to plan for the future, education, unplanned events like illness or accident.
This summarises the issue up perfectly.

I have to admit, family experiences at the age your kids are will always be remembered. A road trip across the USA (or Canada) would be something extraordinary, and should not be discounted. Life cannot be all about work & being sensible and not living...

Do the cashflow projects and see if it helps you reach the right answer !
 
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