Negative Equity - What to do??

A

apeking

Registered User
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Yep i have been caught out big time by the drop in house prices.

I bought a apartment off the plans in March 06 for 290K, 100% mortgage. We still have more or less 290K left.

I bought it with a friend in the hope of shifting it after 2 years and buying a house with the girlfriend then.

Now that time has come, i reckon we would be lucky to sell the apartment for 250K/260k now.

My friend doesn't want to buy me out, he is not keen making a loss and either am i, and i do not want to buy him out either.

My girlfriend doesn't want to live in the location where the appartment is.

So what would users recommend i do?

i know there must be other people in my position but honestly i cant see it getting any better for another 3 years(valuse of appartment rising back up to 290K).

Should we just sell now for 250K and split the 40K between 2?

I have about 10k saved and then i have to try build up more savings to buy another house.

If we were to move out of appartment and rent it would not cover the mortagage. (extra 500 )

Any advise would be great

thanks
 
I wouldn't sell now. You may lose even more than €40k. I would live there and pay the mortgage...your girlfriend's dislike of the area should frankly not be entertained at this time.
 
Ye but the 3 of us living in a two bedroom apartment.......

it make sense alright to buy him out but i cant ask her to bail him out in a place she doesn't like.

I am trying to gentley push her towards the idea but she is having none of it so now i am stuck.

God dame my stupidity in buying, sure what can you do whats done is done.
 
apeking said:
it make sense alright to buy him out but i cant ask her to bail him out in a place she doesn't like.
Click to expand...

It should'nt be a case of bailing him out... if you do decide to buy him out, then you should pay market value and not a penny more.

As for the overall situation, you're stuck between a rock and a hard place. You've blown your first time buyers status, lost 20k and tied yourself up for the foresable future. I think unless your income/career is rising rapidly, then you can simply forget about buying a different place with the girlfriend for the next few years.

If you REALLY want to move out and live with GF, then you have only 2 options - 1) you and your friend let the apartment out and suffer the 250 loss per month each on your "investment", then you rent somewhere else with your GF in the area she approves of. 2) you and your friend sell up and some how absorb a 20-30k loss each; you then rent somewhere else with your GF in the area she approves of.

Sorry to be harsh, but I think the only way of living with her in the place she wants is for you to suffer your loss and rent with her. And no, you're not to the first person to post with a situation where a property owner ends up becoming a tenent themselves.
 
Thanks CGorman,

You have actually put my options clearly in front of me. As for career rising rapidly i am working in construction sector so rising isn't on the cards.

She is a big anti renter=dead money and all that according to her but i can definitely see the advantage of it now.

I will have to sit her down and tell her the facts.
 
PS, I ment to wish you the best of luck whatever decision you do make. Hearing that your a construction worker, I have even more sympaty for your situation. I don't envy you; but I'm sure you'll find a way through this and will eventually be back on your feet with respect to money.

Good luck
 
That`s a tough one Apeking, unfortunately you are not alone in this situation by a long shot. I hate to hit you with another piece of bad news but I sincerely doubt that you would get anywhere near the €250/260K in the present market.
I hope it all works out in the long run for you.
 
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