# Time to cash in?



## Corleone (13 Jul 2006)

Hi,
First post and thanks in advance for any advice received! 

We own a house in Dublin but am planning on moving from Dublin next year to build "down the country". A similiar house on our street has just been sold for just over 500k which would realise a gain for us of approx 100k. 

As I work for a major bank we have a staff deposit rate of 5%...if you were in my shoes would you sell?

We are in a position to built house and keep the property in Dublin, and had planned as keeping the house in Dublin as a pension so to speak, but 5%, ie E333 per month after withholding tax looks attractive given the low risk.

Any opinions on this would be most welcome.

Thanks,
Corleone.


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## Culchie (13 Jul 2006)

Just done exactly the same thing, I'd do it in a flash at the moment.

edit - I had far more equity % in the house


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## SteelBlue05 (13 Jul 2006)

If you can afford it (assuming its a good location) then keep the Dublin one and rent it out, what yield would you get from renting it?


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## money man (13 Jul 2006)

corleone this is a really relevant question (although some dont realise it) the house could go up another 50k next year if this happened would you be a bit upset? equally it may stay the same price for ages . is unlikely to fall in value though. if you definite intention is to move down the country and build then i suppose now is as good a time as any. if you begin by sorting your site/finance/get builders to tender/quotes/designed/planning etc then at least you will be making progress instead of a needless will i or wont i sell as you need somewhere to live . start this then put your house on the market. dont sell in a rush wait for the right buyer who is willing to pay over the odds. 500k is within alot of peoples reach in dublin.


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## Corleone (13 Jul 2006)

Thanks for the advice..especially about waiting until planning etc secured. 

Mortgage is 1,550 and expected rent about 1,400 - 2 Doubles and 2 singles. House that went for just over 500 was in OK condition but we have our place nicely done up at little cost I might add. Would have no hesitation about netting 100k from an investment made in less than 2 years, it's the re-entry costs that are putting me off....the house would need to fall by the stamp duty amount plus solr fees etc before getting back in again...that's a 10% fall at minimum...

C


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## Thrifty (13 Jul 2006)

Corleone, have you factored in that since you've only had the house two years you will have to pay the difference in stamp duty between an owner occupier and an investor as you are renting it out within five years of buying it.


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## money man (13 Jul 2006)

i wouldnt hold onto it to rent. i would just sell and get the 5% return and build my own house in the country and live happily ever after. simplistic but as it stands you cant lose. if you hold onto it and rent you will be penalised for stamp duty , will have to maintain the house, go up to dublin and collect rent, meet tenants , declare income, register tenancies ( you seem to want to rent rooms individually = not a great idea) pay 2 mortgages ( maybe face continually rising interest rates) uncertainty over economy / housing market. etc


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## Corleone (13 Jul 2006)

Hiya,
Wouldn't have a clawback on SD as it's 2nd hand and paid SD already.
5% with no risk looks good for me..will wait until I turn a few 
sods first though.
Thanks for the advice.
C


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## mollser (13 Jul 2006)

Funny, we were discussing this same thing last night.  Bought house only 18months ago for €410k, now could sell for €620k, most likely more, based on one very recent sale and the numbers who turned up to view a similar house yesterday are anything to go on.

Mortgage repayments stand at approx €1,800, and are set to rise by €52 for every 0.25% interest rate increase (am expecting a lot more of these).  Per Daft, the same house can be rented for €1,350 per month, thus a saving TODAY of €450 per month, set to increase with interest rates.

If we sold now, we could have over €200k sitting in the bank, earning net €400 per month risk free at 3%, plus a cashflow saving on the mortgage / rent of €450 per month.  €850 per month better off.

We aren't going to do this cos we love the house, and there maybe further capital gains on completion of the luas extension 

AND THE WORST BIT ABOUT THIS, is that I recognise this opportunity now, and 5 years down the road may regret not doing this when I see how comfortable we could be, rather than scrimping to pay the mortgage!!  

I dread looking back on this post in a number of years..


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## EvilDoctorK (13 Jul 2006)

Corleone said:
			
		

> Wouldn't have a clawback on SD as it's 2nd hand and paid SD already.



Not necessarily true  - if you paid reduced First Time Buyer rates of SD when you purchased then you'd still be liable for a clawback to the full rate


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## bearishbull (13 Jul 2006)

mollser said:
			
		

> AND THE WORST BIT ABOUT THIS, is that I recognise this opportunity now, and 5 years down the road may regret not doing this when I see how comfortable we could be, rather than scrimping to pay the mortgage!!
> 
> I dread looking back on this post in a number of years..


it aint a profit till ya bank it, with economy building 100k properties a year how long before supply exceeds demand?(remember demand is affected negatively by interest rate rises)


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## conor_mc (14 Jul 2006)

mollser said:
			
		

> If we sold now, we could have over €200k sitting in the bank, earning net €400 per month risk free at 3%, plus a cashflow saving on the mortgage / rent of €450 per month. €850 per month better off.
> 
> We aren't going to do this cos we love the house, and there maybe further capital gains on completion of the luas extension
> 
> ...


 
Don't forget that your re-entry costs (such as stamp duty) if you decide to buy again will come out of the €200k profit. 

However I can empathise with you - I can see the opportunity myself, but can I risk it? And even if I could, when I mentioned selling the house to the boss, she didn't take too kindly to the idea. That's the Irish attachment to property, you see.....


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## ajapale (14 Jul 2006)

conor and bearishbull,

Why have you repeated mollser's post in full as quote? It makes for very tedious reading. Why not simply quote the sentence or phrase to which you are referring. (see EDrK's reply to Corleone)

Please edit your posts when you get the opportunity.

Thanks,
aj


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## owlface (19 Jul 2006)

I used to live and work in London, left thebig smoke like you planning to, moved to Macroom, Co.Cork.  Prices still cheap relative to Cork county in general,  25min drive to Cork City where jobs plentiful esp in proffessional capacity.   Reccommend you rent out Dublin propertythrough a legitimate agency, rent a property near your desired location,pocket the monetary difference and try living there  before you sell.  Look for a site (ask farmer in yur local pub) and do a one to one deal, all done through your trusted  solicitor.   I worked n UK property biz and the 'tip' point in the Dublin market was reached about 2 months ago, however rent yields and  house asset growth will plateau  for at least next year, which would fit in with theabove plan.   I definitely recommend the move,I live in a cottage with two cats and a dog, each morn I go to work, am greeted by rabbits jumpn around the garden, great for stress levels


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## Corleone (20 Jul 2006)

Owlface...can you expand on you "tip" point for the Irish Property market?

EvildocktorK - you're right about the SD, should have mentioned we weren't FTBs...

On a related point, the sensus figures out yest is a positive bit of news for investors....

Corleone.


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## thewatcher (20 Jul 2006)

Corleone said:
			
		

> Owlface...can you expand on you "tip" point for the Irish Property market?
> 
> EvildocktorK - you're right about the SD, should have mentioned we weren't FTBs...
> 
> ...


 
I wouldn't say that,all that immigration and still rents are falling.The years 2001,2002 and 2003 saw over 10,000 asylum seekers each year,that number has now gone back to the 4000 mark.
Work permits have been dropping every year since 2003,a lot of eastern europeans arrived here after accession but i'm sure the word has filtered home that the streets are not paved with gold !.


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## SteelBlue05 (20 Jul 2006)

thewatcher said:
			
		

> I wouldn't say that,all that immigration and still rents are falling.The years 2001,2002 and 2003 saw over 10,000 asylum seekers each year,that number has now gone back to the 4000 mark.
> Work permits have been dropping every year since 2003,a lot of eastern europeans arrived here after accession but i'm sure the word has filtered home that the streets are not paved with gold !.


 
Maybe that is true. I was talking to a Polish girl who has been in Ireland (Galway) for 3 weeks now and still hasn't found a job. I thought she would get a job very easily in a cafe\restaurant etc but she said its very diffcult to find one. It maybe because the students are off for the summer and have taken most of the jobs already. Still my impressions would have been that there are loads of jobs in the retail\service area, mustn't be the case afterall.


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## phoenix_n (20 Jul 2006)

Corleone said:
			
		

> a gain for us of approx 100k.


 
Depends really. Would you be willing to gamble a gain of say another 50K over a loss of 50K

Its satisfying to have earned 'free' money but to lose tens of thousands would be hard to stomach.


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## mell61 (20 Jul 2006)

1 item that isn't really mentioned but I have heard discussed recently is any children you may have that decide to come back to the big smoke for 3rd level!
Maybe you're not in that boat, but recently talked with someone in similar situation and they decided to hold on, with the idea that within 5-8 years they would have 3 children potentially in the 3rd level in Dublin.    He figured that holding on would be a good deal, even if in the short term he needed to supplement the cost (apprx Eu1k per annum), compared with 3 rents a few years down the line.
Now this is a specific set of circumstance, which may not be valid to you, but is the potential requirement for Dub accommodation in medium term?


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## Corleone (20 Jul 2006)

It's funny...when you get married people always start asking about kids...esp the mother...to which I have a standard reply "Just Practicing"!!Valid point though...it would be  a long term rather than medium term requirement for us...but so far off (18-20yrs) we're not attaching much weighting to it...

Corleone.


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## JohnBoy (20 Jul 2006)

in that case cash is king. your property would not be self funding - albeit the shortfall would not be large (but this does not allow for voids). There is a lot to be said for the peace of mind that a lump of cash on deposit brings.


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