Rent or sell?

cremeegg said:

Tax is irrelevant to profit. All profit is taxable.

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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.

Sarenco said:

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

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You have obviously never run out of cash.

Sarenco said:

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.

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

cremeegg said:

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

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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?

Thanks for all the responses guys.

A lot to ponder and definitely not a straightforward decision!