# Sell or Keep 2 Bed Apartment in D18



## lexus (21 Jan 2008)

Hi all

please oh please give me some advise.

My husband and I are buying a house as we are hoping to start a family soon. We have  a 2 bed apartment currently. Bought 2 years ago, equity of about 120K

We have on the market and have secured a bid at about 12K less than what it was valued at.

We have approval to release equity and rent out, and still buy the new house, this will mean us having 2 mortgages the first covered by rent and the second we can barely afford.

SHould we hold onto the apartment as an investment property or should we just sell it do ye think? With solicitors fees, auctioneers fees costing about 8K I feel that we should keep and rent it out, as the luas will be within 10 mins walk in about 2 years.

I would love some advise, as we really are not sure what to do, thanks


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## comanche (21 Jan 2008)

what sort of yeild will you get on the apartment?


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## ClubMan (21 Jan 2008)

Sell home or keep as an investment?


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## lexus (21 Jan 2008)

rental income will cover an interest only mortgage over 25 years or we can pay off the principal over 25 years if we contribute 400 a month (which we can afford with a stretch)


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## lexus (21 Jan 2008)

i read this but i think its a big difference as this poster has a lot more equity built up in his property, also ours is in a very popular rental area


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## Butter (21 Jan 2008)

Sit down with a calculator and work through all the options as carefully as you can.
Take into account the yearly management fees and all the other expenses involved in renting out the apartment (contents insurance, possible letting fees, maintenance costs etc.)  Remember that you may be liable to tax on the rental income as well.  Don't assume that it will be rented for the full 12 months a year.
If you can afford to pay €400 a month towards the mortgage to keep it as a repayment mortgage bear in mind that you are paying €400 a month into what may be an asset that is decreasing in value at the moment.  It will also affect how much you will be able to write-off against tax.  If you can't keep up the €400 monthly payments then an interest only mortgage is the only option and the amount owed will remain the same over the 25 years.  If you go for this think about why you want an investement property - in 25 years you will either have to repay the capital or sell it.
If you keep the apartment and have a mortgage that you "can barely afford" what would happen if the apartment couldn't be rented for a month or two?   If you are hoping to have  a family what will happen when a baby comes along?  Many jobs don't pay full salary to women on maternity leave and the cost of childcare in the future will eat into your income even if you are both back to work.
I don't know your exact circumstances or income levels but I think that if you have an offer on your apartment, even if it is not quite what you hoped for, you should probably grab it.  Unless you always wanted to build up a property portfolio as a possible pension or with a view to becoming a full-time landlord it's probably not the best idea.  
Take the equity you've built up and use it to have a smaller mortgage on your new house which will allow you to enjoy life and hopefully a family without the worry of being a landlord and the risk involved in taking on the amount of debt you're taking about.  Unless you have plenty of spare money to fund an investment property without it impacting on your day-to-day life then I think it is too risky for your circumstances.


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## doberden (7 Feb 2008)

Sell... Have you seen the amount of apartments for sale in Dublin and the discounts developers are prepared to offer?


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## pc7 (7 Feb 2008)

take the money and run! honestly why put yourself under financial pressure, circumstances change, its a lot of hard work and hassle being a landlord. While current rental amounts will leave you with a shortfall of 400 a month, what if rents drop and you are seriously short. If you've a good offer take it, plenty of threads of people trying to sell without luck.


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## MrKeane (7 Feb 2008)

If the aparment sits empty for the next 12 months where does that leave you?


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## coppers (7 Feb 2008)

Marg said:


> Remember that you may be liable to tax on the rental income as well.


 
You get interest relief on investment mortgages. Therefore you will not have to pay tax on rental income untill that income becomes greater than the (interest payments + management fees + other 'renting out' expenses)

If you do decide to keep, you should choose an interest only mortgage and save/invest the €400 elsewhere http://www.askaboutmoney.com/showthread.php?t=6217

Luas will certainly add value to you apartment; how sure are you that these plans will materialize?


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## pc7 (7 Feb 2008)

doing a quick search on daft for 2 beds in d.18 shows 38 for sale, you should look and see if their asking prices are similar to yours but its great to have an offer


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## bacchus (7 Feb 2008)

coppers said:


> You get interest relief on investment mortgages.


 
Nop, (mortgage) interest relief is only for principal residence.

May be you are refering to the interest part of the mortgage that can be offset from rental income for tax calculation?


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## coppers (7 Feb 2008)

bacchus said:


> Nop, (mortgage) interest relief is only for principal residence.
> 
> May be you are refering to the interest part of the mortgage that can be offset from rental income for tax calculation?


 
Yes sorry for the confusion. 

My overall point was that the op would probably not be liable for tax for many many years. Maybe the op could post some figures e.g oustanding mortgage, interest rate, rental expenses etc


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## iggy (10 Feb 2008)

Marg said:


> I don't know your exact circumstances or income levels but I think that if you have an offer on your apartment, even if it is not quite what you hoped for, you should probably grab it.


 
A potential buyer in the present market ,at almost the asking price?? Grab the money!


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## John Rambo (11 Feb 2008)

Guess I'm a lone voice but I'd keep the apartment. If you don't have to sell then I think it's crazy to try and do so at the moment.


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## moneygrower (13 Feb 2008)

Camry said:


> I would bite their hand off.



you would


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## Thomas22 (13 Feb 2008)

Take the money and run


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