# To sell the house or rent it out, opinions please!



## Subotai (31 Jan 2010)

I need to move house for work reasons, and i have 2 options regarding my current house - to try and sell it or to rent it out.

I bought it for €227k in 2006. I bought it with an 80% mortgage, and over the last 4 years, i have paid off about 20k. The result is that i now owe the bank €163k on the mortgage. I had the house valued the other day at €170k - €175k.

If i can succeed in selling it for the region of €170, i will be left with nothing after paying toff the estate agent and the legal fees. So i will lose the ~60k that i have put into it, but i will be debt free!

The mortgage at the moment is €750 a month, and the going rate for rent in the area is €625, so i would have to subsidise it by €125 a month. Obviously when the ECB rases it rates later this year, this gap will widen.

Is it worth holding on to the house and renting it out at a loss, in the vain hope the the market will pick up at some stage, and i can sell it in a few years for a better price? Or should i just try and get rid of it now and walk away?

What do people think? Thanks.


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## chlipps (31 Jan 2010)

Note you cannot put the full rent against the mortgage...  interest on loan tax deductable. You will have to pay tax on the rent so gap is wider than you think

How long do you need to move for work? Is there a chance that you will be back to current location in 2-3 years. If yes, then why not hold onto it and rent it for few years


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## Subotai (31 Jan 2010)

No once i move that wsill be it!


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## Eithneangela (31 Jan 2010)

The property market is still in turmoil and will be for quite some time yet.  If you can at all hang on to the property by renting, then I would strongly advise that.  If you're going to be too far away to manage the rental scenario, then maybe try to rent the house to the local authorities who will guarantee a long-term rental (albeit at lower rates) and hope that in a couple of years time the property market will have stabilised.  BTW, if you can at all afford to keep the house, property is still one of the better long-term investments.


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## lionstour (31 Jan 2010)

This might be a speculation on the price of houses, but the only way i can see them going is down, so I would say sell now if you can get the 170 you are saying you might get.  (I doubt you would thought). Other considerations I would make before selling are  

Do you see yourself moving back to the locality at a later time

Can you afford to make up the gap from the rental.

Is there a good demand for rental in the area your house.


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## moneygrower (31 Jan 2010)

Ask this question on the property pin and see how you get on. http://www.thepropertypin.com/latest.php

Personally I don't think the market is going to 'stabilise' at 2006 levels.


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## ajapale (1 Feb 2010)

moneygrower said:


> Ask this question on the property pin and see how you get on. http://www.thepropertypin.com/latest.php



I agree, that's a good suggestion.

I deleted some off topic posts which consisted of disparaging remarks about thepropertypin.com.

Since this is essentially a property investment question Ill move it from Mortgages and  buying and selling homes to the  Property  investment and tenants' rights forum.


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## lionstour (1 Feb 2010)

ajapale said:


> I agree, that's a good suggestion.
> 
> I deleted some off topic posts which consisted of disparaging remarks about thepropertypin.com.
> 
> Since this is essentially a property investment question Ill move it from Mortgages and buying and selling homes to the Property investment and tenants' rights forum.


 
I assumed the poster who suggested posting the question to the property pin was doing so with a fair amount of irony? Maybe not!

No, the propertypin is a fine sight for sure. But considering thier take on the property bubble one can kind of guess what the consensus would be regarding the original posters question. Which is to sell and sell now.  My advice also for what its worth.


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## moneygrower (1 Feb 2010)

why would it have been ironic?? If I have a query I get as wide a scope of opinions as I can.


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## lionstour (1 Feb 2010)

moneygrower said:


> why would it have been ironic?? If I have a query I get as wide a scope of opinions as I can.


 
Anytime someone posts a questions like the original posters on the propertypin the consensus seems to be sell sell sell.  Its always sell sell sell. (while at the same time telling any potential buyer to stay away from the market).


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## ajapale (2 Feb 2010)

OK, would posters please return to the topic? Discussion of other sites in this thread is off topic and such posts will be deleted.

Thanks,
aj


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## Bronte (3 Feb 2010)

The gap is a lot higher than 125, tax relief is only at 75% of interest, there are a lot of other costs to renting property, the gap will widen when (if) interest rates rise.  

OP will have to do the sums but if he thinks property will go down further, or not pick up for a very long time, that he will not be able to rent easily, that the yield is not good enough, that the location is not tip top, that he can be a landlord, that interest rates will rise then he should sell.  

Forget about the 60K loss.  You will walk away clean.  Many people would consider you lucky.  You can then save, and there is one thing in the property market right now that is certain, it is a buyer's market.


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## jambo.ie (3 Feb 2010)

The loss is less than 60k. The OP has received housing utility for three years. The value of this housing utility must be of the order of 20k at least. Especially given their security of tenure over the last three years. My advice however would be to take the money and run.


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## opelcorsa1 (4 Feb 2010)

I am in the same boat as you, I have an offer which is 160 over what my mortgage is but im on a tracker mortgage and still in first time buyers so if i rent i stand to pay to pay tax on profit and lose my first time buyers mortgage interest relief plus prtb fee, plus 200 property tax, plus higher insurance due to renting altough can take as a tax expense. then fees for someone to do my returns, and the hassle of all this on top of hassle of being a landlord.
all i want to do is move to a more convenient place!!
if you rent, your lovely house that you have sunk a fortune into and years of repayments may be ruined by tennants and still wont make a return on it in a few years, im finding it hard to weigh up.
altough i do have lot of interest in renting it which is good.


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## opelcorsa1 (4 Feb 2010)

Ps check out www.irishlandlord.com it has loads of information to help you weigh your options up and it has a calculator to do your sums! i read on it tonight if dont register with prtb, then you can go to jail, or 3k fine or 240 per day your late registering and if you dont at all you cant claim your mortgage interest on your loan as an allowable expense against your rent, ...and you have no comeback if tennants dont work out..minefield


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## Subotai (4 Feb 2010)

Thanks for all the replies. 

I had a look at the irish landlord site (good site). I reckon that at the moment, taking the tax and everything into account, i would have to pay about €2500 a year to subsidise the rent i would get. And this figure will go up  when the ECB starts to increase its rates later this year.

So that has made my mind up. Its too much extra to pay, along with the rent i will have to pay on a new place. 

So i'm going to try and sell it. The estate agent coming round on Monday to take the photos, wish me luck!


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