# Hold onto BTL apartment in Dublin or sell?



## guerngirl (12 Jun 2013)

Apartment bought 2005 for €365,000 now worth €180,000, owner owes €200,000 on mortgage at 4.95% with 18 years left (€165,000 already paid down). 
 Mgmt fee                     €2,000 pa 
property tax approx       €   300 pa, 
tax on rental income      €1,500 pa,
total annual expenses    €3,800. 

Better to hold onto apartment for the moment and continue to spend close to €4, 000 pa in expenses or better to sell? 
 This is a buy to let.

 Large tracker mortgage also on PPR. 

Advice very welcome, apartment is proving a real financial drain for owner. 

Thank you.


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## cremeegg (13 Jun 2013)

You don't say what the rental income is


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## Commercial (13 Jun 2013)

Who is the mortgage with?
Are there arrears?


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## guerngirl (13 Jun 2013)

Kbc, there are no arrears.  Rental income is €1,000pm
Thank you


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## Bronte (14 Jun 2013)

guerngirl said:


> Better to hold onto apartment for the moment and continue to spend close to 4000 pa in expenses or better to sell?
> Advice very welcome, apartment is proving a real financial drain for owner.


 
Based on what you've quoted there are a number of considerations.  Can you afford the 4K, do you think there will be capital appreciation, is there no problem renting it, could you extend the mortgage term to make it more affordable.  Do you hate renting it, managing it.  How would you pay the NE etc.


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## guerngirl (15 Jun 2013)

Hi please see below for answers. Thanks for your feedback this is proving very helpful:

Based on what you've quoted there are a number of considerations. 


*Can you afford the 4K?*-yes, it's tight but manageable
*Do you think there will be capital appreciation?* - maybe in the very longterm but hard to judge positively in the current environment given the glut of apartments in Dublin
*is there no problem renting it?* - very easy to rent, good location
*Do you hate renting it?* - its a hassle but again manageable - managing it. 
*How would you pay the NE etc?*  - was hoping to sell at the point where we would effectively net off and owe nothing but gain nothing either. Would mean loss of 170k though most likely. Very difficult to decide if its worth taking that loss or holding on to it for a few more years


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## Joe_90 (15 Jun 2013)

As I see it the monthly repayments are approx €1,500, €18,000 pa, Mgt Fees €2,000 Prop Tax 300 sundry exp 500 income tax approx 850.

So actual outgoings €21,650, income €12,000, actual subsidising €9,350.

Can you afford to this?


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## guerngirl (15 Jun 2013)

That's a very good way to put it. Thank you this gives me something to think about. Regards


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## ajapale (16 Jun 2013)

Gurngirl,

I have reformatted your question and expanded the title to reflect the question more fully.

I have moved your question to the  Property investment  forum which is where this type of question is dealt with on AAM.

aj


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## oldnick (16 Jun 2013)

12k seems  low rent on an apt  supposedly worth 180k. In central Dublin gross yield now ca. 10%. 
Outside the centre in popular areas near LUAS/Dart -Dundrum, Blackrock - yields a bit lower.

Rents are increasing -if owner could get an extra 2k p.a. this would reduce the annual shortfall, but it will still be quite high.

If,however, the maximum rent possible really is only 12k p.a. and owner pays mngt fees, then I'm surprised at valuation of 180k.


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## Bronte (18 Jun 2013)

guerngirl said:


> Would mean loss of 170k though most likely.


 
That's the wrong way to look at it. What's gone is gone. Do you really think that you will get that back in any reasonable time period. Forget about what has been and decide if the investment is one that should be continued.

Would you be able to cope if you had a loss of 3 months rent, if you had to spend 10K on repairs all of a sudden.  Are you able to cope if taxes rise?  Only positive is that rents in Dublin seem to be rising.


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