# Will I sell my rental property ?.



## Kingfka (5 Mar 2015)

My husband and I are thinking of selling our Rental Property . why ?
. Our tenant is moving out the beginning of May
. The house is 12 years old and coming year s will need repair work
. Tax bill of €3180 this year . €2800 last year .

I called into Auchioneer yest. And she wreckons we get €150k for the property
mortgage  outstanding €95k
mortgage repayments per month €800 (€9600 per year )
Rent  €780 per month (€9360 per year ) . Could get €900 if we put up for rent again.

The main reason we are selling is because of the tax bill each year . (Nice for some not declaring their tax ) but wondering is now a good time . Will house prices go up in a few year and regret we did not keep it.
Any advise ?.
House is just outside Dublin , meath Border


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## Gerard123 (5 Mar 2015)

Hi. Interesting question and I am also considering selling with tax being a big contributing reason. With 25% of interest expense disallowed and prsi charged on rental income you can end up paying tax even though you are actually losing money on renting. Pretty obscene actually and in no other business does this happen. The Govt expects private landlords to subsidise tenants but yet hits them with punitive taxes.  Ridiculous carry on. 

And then when rents are increasing and perhaps rebalancing the market there's all this talk and posturing about rent controls. While no doubt there may be some excesses by landlords I would be pretty sure they are the exception.  Where was the talk of rent controls when rents collapsed 35% a few years ago?

I have compared the money I will be required to continue contributing to subsidise the rental house and compared to Pension AVCs.  No contest actually, it's a no brainer to sell and do the AVCs. House prices and rents would need to increase very significantly to make the house rental the better option.  My own view also is that the returns on AVCs will broadly be in line with property prices over the medium or longer term so I don't feel I will lose out even if prices increase significantly.  Not making a prediction. 

Existing landlords selling out is also not in the interests of tenants.  The situation will end up longer term where larger landlords, many probably of an institution or investment nature, will end up being the majority of landlords.  They will have the power and be in a position to dictate much more that currently is the case, so only means rents will go one way and tenants will have very little leverage.


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## quadrangle (31 Mar 2015)

Being a landlord/landlady means a lot of headaches these days. Some issues include

1.Decorative repair each time there is a change of tenants
2.New mattresses etc.
3.Wear and tear on the building
4.Property and Income Tax
5.Potential damage to property
6.Potential for interest rates to rise
7.Potential for property to remain vacant
8.Tenant trouble
9.Unpaid bills
10.Letting agent fees if not renting privately

Many people are reviewing their situation and are considering selling. Many people who bought rental properties during the boom are on long term mortgages and will not own the property till retirement age. Do you really need to be dealing with issues 1-10 above when you are aged 65+


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## Eithneangela (31 Mar 2015)

quadrangle said:


> Being a landlord/landlady means a lot of headaches these days. Some issues include
> 
> 1.Decorative repair each time there is a change of tenants
> 2.New mattresses etc.
> ...


Don't forget to add USC to the taxes - we got caught out last year and had to pay almost €2,000 for USC on rental income which we had not included in our tax return. This is charged regardless of rental income not covering mortgage, negative equity etc.
Sold our rental property last December and waved goodbye to most of the items on the above list.


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## Sarenco (31 Mar 2015)

Eithneangela said:


> Don't forget to add USC to the taxes


 

...and PRSI.

Since 1 January 2014 all unearned income, including rental income, has been subject to PRSI at a rate of 4% for all taxpayers.

I suspect this will come as a nasty shock to many landlords when completing their tax returns this autumn.


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## quadrangle (1 Apr 2015)

Being a Landlord is not as attractive as it was 10 years ago when it was a cool thing to do. 

If someone wanted a mortgage to build, and the second property was posing a problem, how much of a loss could that person take on the sale of a house in negative equity? For example if there was X amount owed on the mortgage and the house sold for €20,000 less, would it be worth taking a €20,000 hit?


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## Agent 47 (1 Apr 2015)

I find the whole rental thing not so cool anymore, tax is not an issue this year on my 2 properties but increasing charges, being on call 7 days a week, unknown unknowns occurring is taking its toll. If I had 6 or 8 properties I would do it full time as a business but having done a tax module this year and looking at the vagaries of the Irish Tax system and the high cost elements of this country in general has caused me to reconsider any further investment in Ireland. I had considered investing in ETFs until I saw the thread on this site and its different tax treatment in Ireland!

A bit of diversification is not a bad thing and I may invest abroad.


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