Should I sell or renovate to keep renting out..

D

Dithering

Guest
My only asset is a small two-up two-down in Ringsend, currently rented out as I live and work in the UK. The current tenants will move out shortly and I need to do substantial work to get the place up to scratch. I don't envisage living in the house in the next 3-4 years, but maybe thereafter... who know's?

Time to sell up and release whatever equity I can? (I imagine about 200K)?

Sensible advice appreciated!
Dithering
 
Personally, I would sell an invest a little in deposits and start taking a look at soft commodities and derivatives. €200k should get you 66,000 boxes of shreaded wheat. ;-)
 
Dithering said:
My only asset is a small two-up two-down in Ringsend, currently rented out as I live and work in the UK. The current tenants will move out shortly and I need to do substantial work to get the place up to scratch. I don't envisage living in the house in the next 3-4 years, but maybe thereafter... who know's?

Time to sell up and release whatever equity I can? (I imagine about 200K)?

Sensible advice appreciated!
Dithering
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Hi Dithering.
Personally I would hold onto the property. The market isn't that favourable for sellers at the moment in comparison to say 12 months ago. Your property is city centre and it's all about location, location, location. Houses tend to hold value better than apartments. It might be prudent to look at your lender to see if they will offer you new business rates or rip you off with "existing customer rates". If the property is paying for itself keep renting it and wait for an upturn in the market. At the moment it could take a long while to sell. I'd get the work done. See if the rent can be increased as you are taking on new tenants. The property is city centre so this probably won't be a problem. Ther are plenty of young professionals out there that will look to rent.
If you are holding onto it for another 4 years+ the market may have corrected itself and selling then rather than now would be better. If the rent is paying for the property why sell up? As I said when you are releasing equity check all your options as you esisting lender may or may not be the best for you.

I hope this helps
 
Thanks both... interesting to see two contradictory replies! See why I am dithering? I know what we all need is a crystal ball, but isn't there a chance there will be a further steep drop and we won't see things coming back for a long, long time, if ever?

No believers in the bubble out there, or just that the location and nature of my property mean that it's more likely to hold its value?


All advice appreciated! If we all put our minds together, maybe we can substitute the effects of the much-needed crystal ball?

Thanks
Dithering
 
Dithering said:
Thanks both... interesting to see two contradictory replies! See why I am dithering? I know what we all need is a crystal ball, but isn't there a chance there will be a further steep drop and we won't see things coming back for a long, long time, if ever?

No believers in the bubble out there, or just that the location and nature of my property mean that it's more likely to hold its value?


All advice appreciated! If we all put our minds together, maybe we can substitute the effects of the much-needed crystal ball?

Thanks
Dithering
Click to expand...

If you are earning a gross yield of 7% per annum or more hold on to it. If less sell it.
 
How do I calculate the gross yield? How to factor in rising interest rates / possible declining rental income??
 
Camry said:
If you are earning a gross yield of 7% per annum or more hold on to it. If less sell it.
Click to expand...
Gross yield of 7% isn't great with interest rates of 5.5%?

Gross Yield is: (Annual Rent - Annual Costs) / Value * 100?
 
Ok, on that calculation, my return is low...

12K income less 10K mortgage (is that the expense you meant??) divided by value (say 400K) x 100 is only one percent...

But doesn't this ignore the capital value and long-term appreciation..

Is annual return really the decisive thing?
Thanks
Am learning!
Dithering
 
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