Sell 2 bed apartment to buy 2 bed house?

F

frunzy

Registered User
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Hi All,
Just putting this out there, currently have 2 bed apartment in Naas approx 5 years, all grand so far with various tenants, no hassles etc but am thinking of selling this and am looking at a small 2 bed house in Dublin 8 as I feel it would have greater capital appreciation and bigger tenant market in the future. This is just a hunch and nothing else or would I be better looking at a 2 bed apartment in D8 in terms of rental potential? I would be stung for ctg on the current property purchased for €142,000 market value €280,000 so would have to top up mortgage for new property.Go easy on me now!!
 
Presumably you already paid investor stamp duty (3% at current rates - probably the same 5 years ago) on the original purchase or as a clawback and this is not outstanding? If it is then you need to factor that into your calculations too.
 
The costs involved will be considerable when you factor in estate agency fees, legal costs of buying and selling, capital gains tax and then stamp duty on the new property. Don't forget the hassle involved as well. You'd have to be convinced that D8 will outperform Naas by a long way to make it worth your while. I don't think i would do it, but that's just my opinion!
 
Would the extra rental yield be enough to warrant the purchase price of the D.8 house? Seems to be about €1450 on daft.
 
The best way to look at this is the yield as with any investment.

  • Calculate how much you would expect to have after your sale
  • Calculate how much a two bed house / two bed apt in D8 really costs including legal,stamp and all other fees as suggested by the poster above (but look around as there are plenty of rentable Dublin areas of equal value - DART line, LUAS line areas)
  • Then look at rents in the area and if the rent yearly works out at a yield of 4% and up then you could go ahead. Anything less then that and you`d really be better investing your cash in a bank especially in SSIA grabbing bank styled offers. No hassle from tenants, tax issues etc
  • Oh and although D8 may be in town etc there is no guarantee that prices will rise more than Naas or at all to be honest although you would have to think that a city centre address will be insulated from (some) of the possible price drop due to the inherent value of city property.
Hope that was helpful in some way.
 
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