Rent or sell?

[Sarenco]

Tax is irrelevant to profit. All profit is taxable.

Tax is very relevant when deciding whether to retain an apartment as a rental or to cash out any equity and apply it against the PPR mortgage.

Cash-flow is certainly important but I disagree that it's the most important factor to consider.

 

[cremeegg]

Cash-flow is certainly important but I disagree that it's the most important factor to consider.

You have obviously never run out of cash.

Tax is very relevant when deciding whether to retain an apartment as a rental or to cash out any equity and apply it against the PPR mortgage.

Of course you are right that a lower mortgage on the new property would result in an after tax saving of 2.1%

 

[Sarenco]

Of course you are right that a lower mortgage on the new property would result in an after tax saving of 2.1%

That's really the key point, IMO.

In round terms, cashing out the €73k equity and applying it against the PPR mortgage would save around €1,500pa. (It might also allow the OP to switch to a lower mortgage rate due to the lower LTV but that's a detail).

Whereas, all going well, keeping the apartment as a rental might net around €4,500pa, after all expenses and taxes.

Is a projected differential of €3,000 sufficient reward for all the risk and hassle involved with starting a property rental business?

 

[g_mc_21]

Thanks for all the responses guys.

A lot to ponder and definitely not a straightforward decision!