sell investment property in lucan?

C

club92

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I have a 3 bed semi rented out in lucan, got it in 2001 and it has done very well for me i'm glad to say (but i hope i dont sound smug!). Anyway was thinking of taking the cash and selling mainly because i fear a property crash/recession. I have no real base for this view just a bad feeling that things are going bad. has anyone any views on whether i should cut and run - very open question i realise but am just turning to askaboutmoney for some opinions?
It does seem that three bed semis are doing well at the moment so maybe i should hold onto it.
undecided!
 
Re: sell rip in lucan

hey Club,

I hope that gut feeling of yours doesnt bare fruit ,cause Im trying to get on the Investment Property ladder myself out in Lucan...Liffey Valley estate to be exact.
 
That's what makes a market! Some people wanting to sell because they think that the prices are too high and others who want to buy because they think that there is value.

Investment property is a long term project. You would be extremely lucky to get the timing exactly right. When you add in the transaction costs and stamp duty, it will cost at least 10% to sell and buy back in. Let's say that the market drops by 20% from high to low. You would have to sell at the peak and buy back in at the low for a maximum gain of 10%. It's not worth the hassle as property prices may continue to rise.

Brendan
 
Also look at the what, if any, net gain you will have. If you get €1000 per month in rent that's €10'000 per year allowing for empty times and expenses. I don't know what your tax situation is but if you pay 1/4 of the income in tax (allowing for mortgage interest relief etc) you will need to clear about €150'000 that can be taken off your mortgage to justify the loss of income.
As Brendan pointed out you will also have to pay transaction costs such as CGT, legal fees, estate agent fees etc. On a house that you sell for 350k that you bought for 100k even allowing for the years when there was indexation you will pay around (ballpark) €40’000 in CGT. So that’s 50 odd thousand to sell up and the loss of rental income in a low interest environment.
I’m not saying don’t sell I’m just agreeing with Brendan that it's not cheap to get out of the rental business so make sure you do the figures before you put up the foe sale sign.
 
thanks for the solid advice, my hunch is based on nothing really plus it Just hit me today about the loss of rental income stream.
 
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