accidental landlord, my gut says sell property now

L

lordlander

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i have a rental apartment in dublin, tenants are moving out in Jan.
20yrs & €170,000 remaining on mortgage @ 2.9% interest
rental income €1,250pm
mortgage payment/maintenance costs €1,100per month

any advice greatly appreciated
 
Sarenco has a Key Post on how to approach the decision here:

Key Post - Keep property as Rental or Sell?

Updated May 2020 The question regularly comes up on AAM whether somebody should keep an apartment that their family has outgrown as a rental or whether they should just sell up. Borrowers often run projections on the anticipated rental income from an apartment with a cheap tracker and conclude...
www.askaboutmoney.com

No one can answer your question without knowing the value of the apartment and the rest of you financial information e.g. Do you have a mortgage on your home and if so, at what rate? What is your pension situation?

Brendan
 
hi brendan,
the apt is valued at €250-260k
i currently pay 3,500pa to the taxman on rental income
mortgage free on home, pension will be approx 200k
i will give the sarenco post a read now
thank you
 
If you are paying tax then it is profitable, maybe you are confusing cashflow with profit? Tax and mortgage payments may be more than what you receive in rent but don't confuse that with the real profit.

If you are paying €3.5k in tax, you have a gross profit of ~€7k/yr for roughly €80k equity (€250k-€170k).

Well worth keeping if you don't mind being a landlord and you have no other debt which you don't appear to have
 
lordlander said:
20yrs & €170,000 remaining on mortgage @ 2.9% interest
rental income €1,250pm
mortgage payment/maintenance costs €1,100per month
Click to expand...

Ignore mortgage payments and look at the interest. A big chunk of the payment is a repayment of capital.

Rent: €15,000
Interest: €5,000
Management charges and expenses: c. €3,000
Profit before tax €7,000
Tax :€3,500
Net return €3,500

Investment: €80k

Seems as good an investment as any other currently available. Certainly better than having €80k wasting away in a bank account.

You could sell it and use the proceeds to bump up your pension contributions.

But if it's hassle-free and easy to get a good tenant , then just let it again.

Brendan
 
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