TheLoneRanger
Registered User
- Messages
- 4
Fact pattern:
- Rental property in urban Donegal - value of similar properties sold nearby €120k
- Semi detached 3 bed
- Bought in 2006
- Built in 1995
- Rental income €6.6k per year
- Mortgage remaining €135k
- Interest rate on mortgage 3.15%
- Rental losses available to offset future rental profits €2k
Our tenants recently told us there was some paint bubbling on the window sill at the top of the stairs. On a visit to inspect the property we noticed hair line adjoining vertical and horizontal cracks on the gable wall. Tenants say these have been there since a deep freeze in 2010. We've had both an engineer and builder inspect visually. Both say cracks are consistent with MICA defective blocks and that water likely has gotten through the outer leaf via the cracks to soak the insulation which has now seaped through by windowsill. As this is not our principle private residence we don't qualify for the MICA redress scheme.
It would be great to get your thoughts on the following options.
1. Cut our losses and sell the property for whatever we can get today. Provided the residual was no more than 60k we'd have enough room to gear up on our existing home to settle the balance. Would there be a market to buy at 75k?
2. Repaint the exterior and reseal all windows to slow any water ingress. Up the rent to €750 (current market rent for similar properties), keep for 10 years with the intention we'll have mortgage settled in that time. Property likely will have deteriorated by then but it's taken 25 years for hairline cracks to show so perhaps condition remaining good enough to rent for 10 years isn't unreasonable.
3. Borrow to rebuild the outer leaf of the property. Estimated cost 75k. One issue with this is we might get half way through the job only to find inner leaf needs to be redone also which would double the cost.
- Rental property in urban Donegal - value of similar properties sold nearby €120k
- Semi detached 3 bed
- Bought in 2006
- Built in 1995
- Rental income €6.6k per year
- Mortgage remaining €135k
- Interest rate on mortgage 3.15%
- Rental losses available to offset future rental profits €2k
Our tenants recently told us there was some paint bubbling on the window sill at the top of the stairs. On a visit to inspect the property we noticed hair line adjoining vertical and horizontal cracks on the gable wall. Tenants say these have been there since a deep freeze in 2010. We've had both an engineer and builder inspect visually. Both say cracks are consistent with MICA defective blocks and that water likely has gotten through the outer leaf via the cracks to soak the insulation which has now seaped through by windowsill. As this is not our principle private residence we don't qualify for the MICA redress scheme.
It would be great to get your thoughts on the following options.
1. Cut our losses and sell the property for whatever we can get today. Provided the residual was no more than 60k we'd have enough room to gear up on our existing home to settle the balance. Would there be a market to buy at 75k?
2. Repaint the exterior and reseal all windows to slow any water ingress. Up the rent to €750 (current market rent for similar properties), keep for 10 years with the intention we'll have mortgage settled in that time. Property likely will have deteriorated by then but it's taken 25 years for hairline cracks to show so perhaps condition remaining good enough to rent for 10 years isn't unreasonable.
3. Borrow to rebuild the outer leaf of the property. Estimated cost 75k. One issue with this is we might get half way through the job only to find inner leaf needs to be redone also which would double the cost.