Sell holiday home?

B

Bostonian

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I've got a holiday home but I'm wondering if I should sell it. I'm paying back over €900 per month on the mortgage-about €11k per year (and rising!) but the most I can squeeze out of it in seasonal rental income is about €3500, ie, it's only paying about 1/3 of the mortgage. It's also a cause of considerable hassle arranging someone to organise letting tenants in, laundry, cleaning etc. Financially I'm really feeling the pinch. It has appreciated considerably in the reasonably short period of time I've owned it. I owe about €130k on it but if I sell it I'd walk away with about €120k in my pocket with everything paid off. Should I:
(a) sell it, walk away with the profit, invest the lump sum somewhere and have a better quality of life with €900 more disposable income and have the lump sum for a rainy day?
(b) buy something like a 1 bed apartment close to home (I'd probably have to borrow a little bit extra) and rent it out? I'd probably get about €800 per month for it so I'd have a net mortgage payment of maybe €300 approx per month?
(c) buy an apartment in Spain? (Would that be even greater hassle?)
(d) do something else?
Option (b) is probably the most logical one but the thought of having a lump sum tucked away and a more hassle free life is quite appealing.
If anyone has any opinion(s) to offer on all this I'd be delighted to hear them.
Thanks.
 
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Re: What should I do???????????

why all the questions about putting all your money back into property, oh thats right, it only ever goes up!...

take profit and bank it. chill out for a year or 18 months..

if you can sell that is
 
Re: What should I do?

Selling it shouldn't be a problem. An auctioneer in the area has a potential buyer and the price he mentioned was around what I'd hope to get. I also know a few people who are very interested in buying in that locality. Similar properties around there sell fairly quickly.
 
a/ Sounds good

b/ If I was getting 800 rent I would expect the plac to cost no more than 180K. Anymore than this then the rental yield isn't worth the hassle

c/ *sigh*

d/ Sounds good to be

On B what is the likely yield?
 
Thanks for your thoughts, Smi1er. I'm sorry but I don't understand the last question you posed. Could you explain please?
 
Bostonian said:
(c) buy an apartment in Spain? (Would that be even greater hassle?)
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According to a major analysis of American and EU house prices (reported in the Irish Times Business section Fri Jan 5), "Ireland faces the greatest risk of a property crash of any western European country". Under the subheading "Scary scores" Ireland's risk factor is calculated to be 6.4 points. Next in line is Spain with 5.9 and the lowest risk factors are France's (3.9) and Germany's (2.7).

With a stake in a Spanish property, I have a personal interest in the matter!
 
pat127 said:
According to a major analysis of American and EU house prices (reported in the Irish Times Business section Fri Jan 5), "Ireland faces the greatest risk of a property crash of any western European country". Under the subheading "Scary scores" Ireland's risk factor is calculated to be 6.4 points. Next in line is Spain with 5.9 and the lowest risk factors are France's (3.9) and Germany's (2.7).

With a stake in a Spanish property, I have a personal interest in the matter!
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Are you thinking of disposing it given what you indicated above?
 
Thanks pat127. I know many people who've bought property in Spain. Many of them have failed to get any serious rental and some have to pay up to €2k p/a in fees etc. I think many of them regret buying as a result of this. I haven't spoken to them about appreciation rates but getting cheap flights is sometimes a problem too.
Why I'd possibly consider Spain is that I've always loved the country and speak reasonably good Spanish.
Good luck with your place. Think of me next time you're out there by the pool and I'm here in the wind and rain!
 
Bostonian said:
Sorry, Dannybouy, I don't understand what you're saying.
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You fancy yourself as a property investor and you don't understand the meaning of the term "yield"?

Sell the holiday home and stick the proceeds into a nice safe savings account, pension fund, An Post bonds perhaps. Before you do yourself an injury. Seriously.
 
Thanks for the advice, Sidewinder. And the concern!

Nobody has yet explained the term "yield" though.
 
An accidental profiteer from the property boom. Fair play all the same. Try google.com, try wikipedia.com, try dictionary.com

Do a bit of research. You mightn't find it as easy to make your next 100k without a bit of it.
 
Bostonian please sell the holiday home.
Do not go to Spanish exhibitions as they are way overpriced. I know as I own property in Spain and Spanish agents have told me that the "paddy price" at exhibitions is 15-25% over the odds.
Buy this book now!
http://www.amazon.co.uk/Renting-Out-Your-Property-Dummies/dp/0764570161
Despite the title it is in an excellent book.
Do not buy anything else until you have the education books like this provide.
 
beattie said:
Are you thinking of disposing it given what you indicated above?
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It's a centre-city property which is rented at present and I hope(!) it may not be as badly affected as a typical Costa villa might be if there is a crash. Accordingly I'm keeping a very close eye on the situation
 
The yield from any investment is the income from that investment divided by the capital value.

If a deposit account pays 4%, then that is the yield.

If a house worth 200k rents for 10k pa, then the yield is 5%.

If a share costing 2 euro earns profits per share of 20c, then the yield is 10%.
 
Thank you very much, Protocol. I'm glad someone was able to explain it to me without going off on a tangent!
Suffice it to say that my yield is poor, to say the least.
It's going under the hammer!

Thanks to all who replied, commented and advised. The last few days have been interesting ---- and educational! And, it would appear, some of you will be happy to hear I won't be giving up the day job.

No surprise that AAM gets so many hits and is so popular. It does exactly what it says on the tin! Well done all.
 
It's a centre-city property which is rented at present and I hope(!) it may not be as badly affected as a typical Costa villa might be if there is a crash. Accordingly I'm keeping a very close eye on the situation
Have costa villa last few years but very happy with it from rental perspective. It rents year round and for good money. Is this the general feeling or is there difficulty in rentals with villas? Our villa is in Nerja.
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Click to expand...
 
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