Rental Income

W

wino

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Hi,

I'm looking for some advice. I have been renting out a property in Meath for the last three years. It has dropped in value by 100k and the present market value is around 400k. This leaves me with about 100k in equity. It is on interest only for the next 22 years and costs 1518 a month between mortgage, insurance and protection policy. Rental income is 1200 a month so I'm already putting in about 400 of my own money to keep ahead of it.
It was to be a long term investment but I was relying on the capital appreciation, am I overstretched.

Should I try and sell before I lose the other 100k in equity?
Should I swithch to annuity and try and get the mortgage down?
Should I get some overall fincial advice?

Thanking you inadvance
Wino
 
Thanks for that Clubman. If only it was that simple!. I have actually dropped the rent by 100 a month on the advice of the estate agent. They are very good tenants and have been there 3 years, I didn't want to lose them. I think the best thing to do is to bulid up a fund and pay off some of the mortgage at the end of the year, the fund can be used as an emergency if I need acess rather than paying off a bit of the mortgage each month. Any thoughts?

Wino
 
You are lucky to be in positive equity of €100k.
The simple question you need to ask yourself is if you had €100k cash would you invest it in an asset that could fall in value for the forseeable future, while at the same time paying €400 a month for that privilege. Surely there is a better home for your money & more effective way to save for your retirement? Putting it under the mattress would at least stop costing you money!
Are you investing in a pension to the maximum of the tax relief available?
 
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