# sell high value Galway property or not?



## ninak (10 Jan 2007)

We bought a private detatched property in a top class address in Galway, Taylors Hill. It was the family home so we did a deal and got it at a very good price.We are in the uk and the plan was to move home in 5 years to live in this house and raise our family. We love the area but the most it can yield in rent is €1300 a month and the mortgage repayments are €2700 a month. Its current value would be about 900,000, more if we get planning permission granted on it before we sell. We own no other property so if we sold we should not be liable for CGT as its not ben rented out. It is increasing in value at a very fast rate, about €100,00 in the last year and a half.
Would we be better off to sell, bearing in mind that our mortgage of 475,000 would just about buy us a detatched house in an estate out the road if we were to try and buy in a few years when we come back.
Would it be better to realise the cash now and invest it other properties. As it stands we are also paying rent in the uk of about €1400 monthly.

There seems to be alot of talk of the top end of the property market slowing down in Galway. Have I missed the boat already? Any advice welcome.


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## pernickety (10 Jan 2007)

who can say? maybe they'll continue to go up but you'll still be losing money month on month. I would sell, but that's a personal choice.


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## pinkyBear (10 Jan 2007)

My advise it is hold on to the place in Galway, If it is where you would see yourself living in a few years time.

I know you are subing the mortgage - but the increase in the value of the house is more than you are subsidising it. It is expected that at a minimum the value of property should increase by %5 this year.

My reluctance to sell would also be based on the likely hood of you getting another property of the same standard again. Esp taking into account you love the area and would live there.


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## phoenix_n (10 Jan 2007)

ninak said:


> We own no other property so if we sold we should not be liable for CGT as its not ben rented out.


 
Is that right? Was wondering if whether the fact that it is not your PPR would you not be liable for CGT.


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## ClubMan (10 Jan 2007)

Total _CGT _exemption only applies where the property was always one's _PPR _and never rented out. If this is not the case then some portion of the resale gain will most likely be assessable for _CGT_. Since you don't live in _Ireland _any longer it cannot be your _PPR_ (other than in certain limited circumstances - e.g. a [dependent?] family member living there on your behalf rent free). You should get independent, professional advice on this before making costly mistaken assumptions.


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## spinal_tap (10 Jan 2007)

If you are looking to sell, DEFINITELY seek planning for apartments on the site. Over the past four years, there have been several other apartment developments approved by An Bord Pleanala, so there is a precedent set. The most recent is currently under construction (Seapark House) by Sawgrass Properties.


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## Remix (10 Jan 2007)

A house in Galway worth €900,000 can only achieve €1300 in rent ?

(Had to read that several times  )

Other factors aside and looking at it purely in investment terms, that inconsistency would incline me towards selling soon.


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## niceoneted (10 Jan 2007)

Are you paying interest only on the mortgage or would you consider this. Maybe try and stretch the mortgage over a longer period of time, until you move back. I would be reluctant to sell if you plan on coming back and using the house and if you like the area. That would be personal choice. ​


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## beattie (10 Jan 2007)

Remix said:


> A house in Galway worth €900,000 can only achieve €1300 in rent ?
> 
> (Had to read that several times  )
> 
> Other factors aside and looking at it purely in investment terms, that inconsistency would incline me towards selling soon.


 
It is a pityful yield but if you really like the area maybe you should hang on to it. Have you checked if houses in the locality are actually selling and if so are they going for as much as you would think. Alot of people make emotional attachments to what their house is worth.


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## gearoidmm (10 Jan 2007)

pinkyBear said:


> I know you are subing the mortgage - but the increase in the value of the house is more than you are subsidising it. It is expected that at a minimum the value of property should increase by %5 this year.



It may increase by more or it may increase by less, or even fall.  Bald statements like that are unhelpful.  Given the rise in interest rates and falling affordability, it is by no means guaranteed that house prices are going to continue to rise.  The most important thing here is whether they can afford to subsidise the rent for the next 5 years.

On a related note, it makes absolutely no difference how much the property appreciates in value or falls in value over the next five years if they are planning on moving in and living there afterwards.  This doesn't matter until the day they put it on the market if that day ever comes.


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## pinkyBear (12 Jan 2007)

> It may increase by more or it may increase by less, or even fall. Bald statements like that are unhelpful. Given the rise in interest rates and falling affordability, it is by no means guaranteed that house prices are going to continue to rise. The most important thing here is whether they can afford to subsidise the rent for the next 5 years.


yes you are right on the above geariodmm - and the big thing is affordability


> more if we get planning permission granted on it before we sell


but the fact that ninak has space for an additional property, the permission itself will add value, in normal circumstances I would agree whole heartedly wiith you but in this case there is the potential for the increase with PP, and that in itself is being conservative for a site in Dublin is worth about €150k - and I am being conservative here. 
Where for an investment of €16800 can you reap that conservative reward.


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## Guest127 (14 Jan 2007)

if you sell will you regret it later? there is no comparison in living in the Galway suburbs (knocknatallagh being an example) and Taylors Hill. Salthill max 15 mins walk. Galway city centre max 30 mins walk. UCG max 20 mins walk. and you can leave your car at home and have a pint in peace. Personally having obtained such a valuable property I would be loath to part with it. thats me, everyone is different.


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## Perplexed (15 Jan 2007)

As someone living in Galway I totally agree with cuchulainn.

Taylors Hill is a wonderful address & property there will always be at a premium. If property values do fall it will be the last place to drop. If you let it go you might never get the opportunity to buy in a place like that again.

Did you ever actually try to rent it out? My son's girlfriend rents a house with 3 friends in Glen Dara ( that's near Westside/Rahoon in case you're not familiar with the area ) & between them they pay nearly €1300 a month in rent. Surely Taylors Hill would bring in more than that ? Maybe you should try a different rental agent.

You do have a big mortgage. Would I be right in assuming it's Capital & Int rather than an Interest only one ? Could this be changed & then your rental income would cover a larger proportion of it ?


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## auto320 (15 Jan 2007)

From a purely investment point of view, you have an asset that is bringing you in a max of 1.7% assuming no breaks in rent stream or no maintenance and repairs, This would maybe be justified if you had bought at the bottom of the market and had a reasonable expectation of substantial capital gains.

In this case however it would seem unlikely that the gains or the rent will increase by much more over the next few years. Looking at this purely as an investment, and this forum is about property investment, you would be better off selling.

It has to be said though that Taylors Hill is a very nice place to live; if I were to live in Galway I wouldn't think of living anywhere else except maybe some parts of Salthill (away from the seafront). If you want to come back and live there, it might be hard to find such a nice place; the number of good large homes in Taylors Hill that come to the market every year would be very low.

The best advice I have seen so far, assuming the suitabilty of the site, is to explore the redevelopment possibilities. Go and see the planning officer and ask him or her for advice as to what would be acceptable. Then get an architect and submit a proposal, and if it is succesful go for auction. Even just go for auction with development potential. If that all works out, you should have made enough to buy another house in the area and pay off your mortgage in full.

Life is too short to suffer a drain on finances each month if it is causing you stress. Better to act and try to maximise your take on the asset.


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