Options on small NE apt in Wexford - Advice appreciated.

C

colly

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I bought an apartment in Wexford in 2006 as an investment property. I paid €130k for it, there is €115k left on the mortgage, I'm guessing it is worth about 80k now. So approx €35k negative equity. I have been lucky and it has been rented out for the last number of years successfully. I used to make money on it but now I have to put about €100 a month to it. Thing is the tennant just moved out, the place was a mess and I need to repaint and buy new beds and some other things - but worse than that there are 3 other apartments in the same development for rent currently, and they are nicer than mine! Last time it was empty it was 6 months before I got a tennant. I am now going to have to pay the €600 a month myself now which I do not know how I am going to manage - and for how long I do not know. It's not an easily rentable place and I'm guessing the prices are not going to rise any time soon, or much at all in the next 5+ years etc.

I'm wondering what I can do, would the bank let me go interest only for a while? I'm with Ulster bank (originally First Active). I assume missing a mortgage payment is to be totally avoided at all costs, or is it really that bad now considering so many people are behind.

The other thought is trying to sell it and just take the debt on as a personal loan or something. Are people doing this? Or, what about these "negative equity mortgages" - it would make more sense for me to buy something up in Dublin which at least I can live in and rent out a room etc.

This is just my thoughts. I know I am in a far far better place than most of the people out there - my problems are tiny as I still have a job etc - but it's a real pain and I want to work out what realistically is the best thing to do.

Any advice would be much appreciated.
Thanks
 
While you have provided no details of income/outgoings, I am assuming from your post that meeting full P&I repayments would lead to problems in meeting your basic living expenses from net income. You need to approach the Bank and advise them of the problem and details of your current financials. They should be agreeable to a request for interest only on the loan for at least 12 months while you attempt to fill the vacancy. If they turn you down you need to re-assess your options. This may include putting the property on the market (not going to be an easy sell, as Wexford market appears to be particularly slow). If an overview of your financial situation indicates an inability to meet the P&I repayments, the Bank will have no option other than approval of your request.
 
How much are the other places asking for rent ? Paint it quickly, put in the beds and undercut them by 100. Better 400 a month for 12 than 600 for 6. The bank may give you lee-way as stated by letters but don't waste any more time waiting on them. This shows at least to the bank that you are genuinely wanting to get the place sorted.
I changed the title to reflect your post
 
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