Moving out of Dublin, keep PPR?

[DublinHead54]

We are considering moving out of Dublin (~2 hours) to be closer to family and get more space for our two young children. We are fortunate that we are able to work full-time from home currently, although this may not last forever.

The biggest drawback is what if it doesn't work out and we decide after a few years that we want to be back in Dublin. We have a relatively large mortgage in Dublin but is currently 2x our salary. Our house has increased in value since purchasing to the point we probably couldn't afford to buy it back in 5 years if we were to come back to Dublin.

As a hedge I am considering to keep the Dublin house and rent it out, whilst purchasing a house in the rural location. I know the pitfalls of being a landlord but I believe the rent would cover the mortgage and costs associated. Has anyone done similar?

Purchasing the house and keeping the PPR would put us initially at 3.8x debt to salary, but that is based on putting the minimum 10% down. I have additional savings and investments that could result in close to a 25% down payment on the rural house, but you can't buy milk with a smaller mortgage. I always look to put the smallest downpayment down then overpay to maintain flexibility.

 

[NoRegretsCoyote]

Purchasing the house and keeping the PPR would put us initially at 3.8x debt to salary, but that is based on putting the minimum 10% down.

First question: have you talked to a lender or mortgage broker to see if it is feasible?

Our house has increased in value since purchasing to the point we probably couldn't afford to buy it back in 5 years if we were to come back to Dublin.

House prices inside and outside Dublin move more or less in line with each other around a different level. Dublin is more expensive as we all know.

One option is to sell up in Dublin and keep €100k or so as insurance in case you want to move back. This is probably simpler than keeping a specific property in Dublin and being a landlord with all the hassle it involves.

 

[DublinHead54]

First question: have you talked to a lender or mortgage broker to see if it is feasible?

I have not, but I did this before in 2021. I was able to get a mortgage for a house on the basis I was keeping my existing apartment to rent out, the debt multiple was worse but the bank didn't look at that they just looked at the ability to repay. Environment has changed now but I am also financially stronger.

House prices inside and outside Dublin move more or less in line with each other around a different level. Dublin is more expensive as we a;; know.

One option is to sell up in Dublin and keep €100k or so as insurance in case you want to move back. This is probably simpler than keeping a specific property in Dublin and being a landlord with all the hassle it involves.

That makes sense. I am thinking of this as a short term hedge, to cover deciding rural living is not for us and that work requires us to be back in Dublin. I think it is hard to see myself at the same firm until retirement age which likely means either being drawn back to Dublin or commuting a few days a week. Long term (5 year plus) I would sell up the house likely.

 

[Sue Ellen]

To get proper advice and look at the full financial situation it would probably be better if you completed a Money Makeover thread.

 

[elcato]

I am thinking of this as a short term hedge, to cover deciding rural living is not for us and that work requires us to be back in Dublin.

Well the first part will be obvious within a year so you could do nothing at the start. Then make a decision purely on the possibilties of part 2.

 

[Tuscany]

Renting in the rural location for a year or so and keeping the Dublin property could be an option. It may not be easy to get a rental but you have local contacts there that could be useful to get something suitable. Things may be clearer in a year or so for you.

We are fortunate that we are able to work full-time from home currently, although this may not last forever.

Your ability to continue working from home is critical. If either or both of you are ever required to work a few days each week in Dublin, it would significantly alter lifestyle for you both especially with young children. 2 hours from Dublin is a good commute.

 

[DublinHead54]

Renting in the rural location for a year or so and keeping the Dublin property could be an option. It may not be easy to get a rental but you have local contacts there that could be useful to get something suitable. Things may be clearer in a year or so for you.


Your ability to continue working from home is critical. If either or both of you are ever required to work a few days each week in Dublin, it would significantly alter lifestyle for you both especially with young children. 2 hours from Dublin is a good commute.

Renting was an option to test the waters but we've spent longish spells in the area in recent years with remote work. I feel it is something that would play out after 1+ year, the first year will go by quick.

I am 100% remote and feel like this is the perfect opportunity to just do it and if it doesn't work out move back. I think the are of work I am in will always remain hybrid and doing an overnight trip to Dublin once a week wouldn't be that bad.

 

[Sue Ellen]

if it doesn't work out move back

If it does not work out and you have the house rented don't forget that its not so easy these days to move tenants along hence one of the reasons for so many landlords leaving the market.

 

[elcato]

My experience of whether remote work will be here to stay is that it won't. Where I work (IT) they are changing to make sure people are in at least 2 days a week. Once the twitter argy-bargy cools down I suspect all companies to be pushing for a greater office presence. If there's any downturn I suspect those attending the office will be more likely to be selected over those that won't. However that is my opinion and I'm usually wrong.

 

[LS400]

whilst purchasing a house in the rural location.

Bear in mind, as you have already have your ppr home, your mortgage lender will treat this new purchase as a buy to let, even though you have no intention of renting out the rural property.

 

[DublinHead54]

Bear in mind, as you have already have your ppr home, your mortgage lender will treat this new purchase as a buy to let, even though you have no intention of renting out the rural property.

This isn't necessarily true from experience. I bought my current PPR with a 10% deposit last year whilst telling the bank I was going to rent out my old ppr which was mortgaged by another bank.