Sell or Rent?

J

JamesC

Registered User
Messages
14
Hi,
We are moving to a new build and have increased the mortgage on our current home to keep the new mortgage as low as possible.
Our existing house is worth about 200k and has a rental value of €750/month. We are over and back on deciding if its best to rent it out or sell it. I am more in favor of selling given the risk of,
Interest rate increase,
Futher value decrease (Already about 40% less than peak)
Hazzle of dealing with tenants (if i can get them)
9K rental imcome seems a poor return on 200K

Would appreciate any comments as about to make final decision. Thanks.
 
Note that you dont have a 9K return (12x750=9k) as you have to pay some tax on same. Also you will incur maintenance costs, advertisement costs, 200 euro tax on second home etc.. so return is even lower.

The big question is could you pay both mortgages comfortably if you dont have tenants. If no then I think you should sell and avoid the longterm stress.
 
Thanks chlipps, income would be closer to 8k, it would take about 30 years to pay off the house with rent alone. Can pay both at pressent, but who knows whats up ahead.
 
Just to note (sorry if this is bad news for you) that you can only claim the interest due on the mortgage to buy your first property, not the interest on the top-up, against rental income. You should do the sums in detail to see if you come out ahead each year and, if so, by how much.
 
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