# Advise on what to do with property?



## Muffinb (2 Dec 2007)

Have to decide what to do soon...
Have rental property with mortgage on it of 310K costing 1200 per month, rent covering the whole lot.
Have Princeipal residence worth 700K with mortgage of only 325K on it costing 1750 per month. So both nortgages worth 635K
Rental property is worth 425K and have just got PP for plot beside it which we reckon is worth 200K. 

*Plan A :
sell both rental property and the land for 625K, lose about 30K to CGT and have mortgage on our own house of only 10Kish!!! Fab!!! but are we mad getting out of rental property market and losing a house that daughter could have in years to come??? This is my one big worry that she ends up living miles way down the country( we live in Dublin beside all out relatives)

*PLan B:
Sell rental and keep land for when baby grows up in 20 years!!! Left with money from sale of 115K and pay off some of own mortgage reducing it to 220K

*Plan C:
Sell land for 200K, lose CGT proportion and pay of own mortgage reducing it to 125K approx which would give us small mortgage.

Anyone any other ideas???
Am planning to go part time in work whch would give wage net of approx 1500 and hubby have net wage 2500. No loans and one 4 month old baby.

Here I go with the form:
Spouse’s/Partner's age: 36
Annual gross income from employment or profession: 45K
Annual gross income spouse:45K

Type of employment: e.g. Medical 

Expenditure pattern: In general are you spending more than you earn or are you saving? No as manage to save about 600 a month between CU and AIB

Rough estimate of value of home: 700K
Mortgage on home: 325K
Mortgage provider:ICS
Type of mortgage: Tracker, interest only, fixed rate: Tracker variable
Interest rate: 4.8%

Other borrowings – car loans/personal loans etc: None

Do you pay off your full credit card balance each month? SDont have one... cant be trusted to not buy loads over the web...
If not, what is the balance on your credit card? 

Savings and investments:about 5000 in CU, 1000 in AIB

Do you have a pension scheme? yes and an AVC of 100 per month

Do you own any investment or other property? yes

Ages of children: 4  months

Life insurance: yes for ourpose of mortage on own house.


*What specific question do you have or what issues are of concern to you?*
*What to do with the above house and site etc for the best outcome for the future???*


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## webtax (2 Dec 2007)

*Re: Advise on what to do with property????*

Is there a reason why you need to sell one of the assets?
Are you on the best available LTV mortgage on your principal residence?


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## Muffinb (2 Dec 2007)

*Re: Advise on what to do with property????*

Just really want to reduce our mortage of our own house as we are kinda strapped each month and would love to have a holiday as have not had one for last 3 years!!! Am I just thinking too much about the shoirt term and not enough about long term??
ANy advise would be great...


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## Muffinb (2 Dec 2007)

*Re: Advise on what to do with property????*

Sorry missed your question...Honestly not too sure about the home mortage, think its ICS 4.8% tracker variable, got it about July 2004 and have not looked at it since.
Changed the rental one recently for interest only and borrowed more to free up money to build extension on own home.


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## webtax (2 Dec 2007)

*Re: Advise on what to do with property????*

if you filled out the money makeover form posters might be able to help with more specific advice, but have a shop around for the best mortgage rate to start with.
Re the borrowed money for your extension - if you borrowed this money on the investment property note that you cannot use this portion when claiming tax relief for your loan interest.


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## Muffinb (2 Dec 2007)

Where can I get the makeover form, tried seach functioin for it but nothing...
Thanks
Muffin


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## ClubMan (2 Dec 2007)

*Re: Advise on what to do with property????*



Muffinb said:


> Sorry missed your question...Honestly not too sure about the home mortage, think its ICS 4.8% tracker variable


You are not sure about the details of your home mortgage!?!


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## ClubMan (2 Dec 2007)

Muffinb said:


> Where can I get the makeover form, tried seach functioin for it but nothing...
> Thanks
> Muffin


Er - you're in it!


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## Raskolnikov (3 Dec 2007)

I would choose option C.

It's laudable that you want to hang onto a site for your child, but be realistic. The chances are that when the child is grown up, his/her career is going to take them away from the nest.


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## bamboozle (3 Dec 2007)

You could sell Land & Rental Property, put $50k now into a trust fund of some sort for your child or any future arrivals, perhaps as mortgage will be seriously reduced divert maybe 100-200 a month into a savings account for the children so when the time comes for them to get on the property ladder there will be money in place to facilitate this?


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## Muffinb (3 Dec 2007)

Thanks Clubman , I discovered it eventually after much searching on the site and ammended my first post. Not that easy to find unless to used to this website.

Thanks Bamboozle I like your idea. Am not thinking straight at the moment as have flu and feel miserable...

Just wondering why you would choose option c Ras?? Would you not think that the property market is staggering a bit now and the market may be disappearing out of rental???

THanks again,

Muffin


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## Raskolnikov (4 Dec 2007)

Muffinb said:


> Just wondering why you would choose option c Ras?? Would you not think that the property market is staggering a bit now and the market may be disappearing out of rental???


If the rent is covering the mortgage, I don't see any sense in disposing of the rental property.


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## romualdas (8 Dec 2007)

*Moderator note: *rude post removed - sorry if this makes the follow up below a bit confusing.


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## Muffinb (10 Dec 2007)

Wow, was not expecting that kind of response. The holiday is not the biggest thing in my life!!! why do you say sell nothing?? Dont understamd why you think Im mad selling the lot or at least one of them??
If I get rid of one or both I can work part time which means my daughter ends up seeing me haf the time instead of none of it and spending her whole life in a creche ? whats wrong with that? It also means that I have some form of life instead of working to live I can live a little.

What use is a plot of land with FPP on it that I can do nothing with? I cant build on it cause domt have any free money so it just sits there with FPP going to waste after 5 years or so.
Assets are great if I have loads of money to throw about but I dont at the mo.... Your answer is a big jagged to say the least, I was looking for  helpful advise as opposed to you stating I must be mad!!! If you cant say anything nice dont bother trying to "help"


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## iggy (26 Dec 2007)

*Plan A :
sell both rental property and the land for 625K, lose about 30K to CGT and have mortgage on our own house of only 10Kish!!! 

Hope I`m mistaken for your sake but wouldn`t CGT @ 20% on 625k be about 125k?


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## rmelly (26 Dec 2007)

you pay CGT only on the 'gain'.


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## Importer (26 Dec 2007)

In your situation I would :

1) definitely sell the site
2) and most probably sell the investment property as well
in that order

Too much of your asset base is currently tied up in Irish residential property.If this takes a bigger wobble than it has already, You will be impacted harshly

If you decide to sell the site and investment property I would be inclined
to pay down the mortgage of my main house which is high in relation to your income, especially if you plan to work less in the future.

If you continue as you are you are very exposed to :

risk of rising interest rates
risk of falling rents
risk of property crash

I would not worry about a house for my young daughter at this stage.
The way the demographics are going, Its very possible that we will have a glut of houses in 20 years time. I would concentrate instead in building up my wealth across different asset classes

Good luck !


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