To sell or not to sell?

liteweight said:
No one could see the very sharp and fast rise coming last Spring..but it did! As to your lump sum:- 350K - 245k-3k(EA)-Adverising-Legal Fees. The amount you're left with can be put on deposit or invested. You should look at other threads to see where you can invest a lump sum. The picture might not be as rosy as you think. Bear in mind that inflation is running at about 4.2% so whatever you decide to do, you'll only be keeping abreast with inflation for the bulk of it.




Why wouldn't you use these increases to pay off some of the mortgage and bring down either the term or the repayments?





With that amount 400, I imagine you're getting the small room!! You're also helping to buy an apartment for your friend, while you are dependent on him or someone else for a roof over your head.

Ok here's another scenario. You sell up and bank the money. Lets say it's earning a bit above inflation. The room you now inhabit doesn't go anywhere near to holding all the stuff you've accumulated while you were an owner. Neverthless you shoehorn yourself into the space every night, happy in the knowledge that you're earning interest. Your friend has some odd habits, he picks his nose and scratches his a$$ while only wearing boxers and then proceeds to drink your milk from the bottle in the mornings. You thought you'd enjoy the carefree, single life but his idea of it and yours are not the same. He brings people home nearly every night of the week, and you're used to having a quiet time whenever you want it! You take to your room every so often when there's company and the friend begins to think you're antisocial. You give that up because you can't sleep or hear the telly anyway, if you can't beat them, join them!!

Your friend falls in luuuvvv...Thank God for that, things quieten down a bit. It's ok for a while but then she starts to turn up every night and you can hear them tittering and giggling all night long. You feel like an outcast in your own home. Things go from bad to worse. You're the one living in the shoe box and they have the ensuite so why are there knickers and tights drying in the communal bathroom?? You have to wade through a mountain of make-up, cotton balls and perfume to find your razor in the morning!!

You complain to your friend..you like Mary but....He stares icily. Are you making derogatory comments about the love of his life?...or at least the woman who gives him regular sex and occasionally strokes his ego? Nevertheless, he says he'll have a word. Next time you meet her, you're greeted with a stony silence....you begin to feel like a stranger in your own home. But it's not your home is it? Its his, soon to be theirs. You walk in on her in the bathroom one night while she's giving herself a bikini line wax. She's mortified....you're mortified, the friend is not impressed......it's a territorial thing you know!

You think you better move out and leave them to it. Friend not to happy as he's now paying mortgage on his own. Girlfriend is ecstatic. You look at Daft till you're blue in the face but nowhere can you find an apartment to rent ALONE for 940 a month!!

Just food for thought!
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That was hilarious mate. You painted that scene so well. I'd try writing a book if i were you.

Its hard to advise but you should also take into account that if you did sell you could invest your gains in shares (5-7 years miminum term) etc as you really are too young to be putting that sum on deposit. Lowering your monthly repayments may make it easier for you to increase (and if you dont have one please start) your pension contributions and as regards sharing; rent apparently is falling (stock is increasing) so you wont necessarily have to share if you dont want to. But regardless you should do something about your 40 year mortgage.
 
2Pack said:
NOBODY EVER lost money taking a profit !
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Bingo! You hit the nail on the head. Whatever happens I will always be better off than I was 2 years ago before I bought.

Only question is, if i sell, will I be better or worse off in 2 years time than I am now!

PS: this is where all those who can tell the future should post... :D
 
phoenix_n said:
Its hard to advise but you should also take into account that if you did sell you could invest your gains in shares (5-7 years miminum term) etc as you really are too young to be putting that sum on deposit.
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I'm a bit sketchy about shares. I always thought they were a risky bet. Although my hands are up, I know nothing about the stock market??
phoenix_n said:
Lowering your monthly repayments may make it easier for you to increase (and if you dont have one please start) your pension contributions
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Eh, no pension I'm afraid to say. It was just something that never seemed important to me to be honest :eek:
phoenix_n said:
and as regards sharing; rent apparently is falling (stock is increasing) so you wont necessarily have to share if you dont want to. But regardless you should do something about your 40 year mortgage.
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Yes I agree. Whoever let me take a 40-year mortgage should be fired!! But yes, I'm either going to trade-up and reduce to a 30 year term, or sell-up and start renting for a while and guage the market.

Hey wait, what's that I see coming towards me. It looks like... no it can't be... damn, its square one. :D
 
buttermilkja (i picture Heidi saying that!)

I think you sound like you want to sell.
I would take the chance, in fact I did and will soon be in possession of my nice lump sum.

If the market continues to rise, tough, you'll have some brilliant years, and then continue to work hard, maybe to rent for a long time, but what of it?

If the market falls you'll be laughing, and may even buy back in.

Just one thought on your figures: You said it was "valued" at xxx euro, by the time you go to sell it will probably be valued at more,and then the bids may start to come in higher again (we got 50K higher than the already ridiculously high valuation). Best of luck, esp. if you get to travel with Peter around Austria (or was it Switzerland?)
 
pernickety said:
buttermilkja (i picture Heidi saying that!)... if you get to travel with Peter around Austria (or was it Switzerland?)
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:D :D :D
That's it! I'm selling so I can move to Austria and set up a museum dedicated to the life and times of Heidi and her friends!! Priceless!!

pernickety said:
I would take the chance, in fact I did and will soon be in possession of my nice lump sum.
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Did you sell for the same reason, just to get your hands on the accumilated profit, or for a different reason? How did it work out for you, are you renting now or planning on getting straight back into the market? Any advice...?

pernickety said:
Just one thought on your figures: You said it was "valued" at xxx euro, by the time you go to sell it will probably be valued at more,and then the bids may start to come in higher again (we got 50K higher than the already ridiculously high valuation). Best of luck...
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Yes it will probably be worth a few grand more... but I can't see people bidding higher against each other. It's just a normal 2-bed apt in a suburb so no special interest I reckon.

Since I've gotten such valuable comments back on this post it's made me think a bit more about things. You see, I'm now thinking that if I sell, I could land a windfall and then use half of it to get straight back into the market. That's €50k for a deposit (which I think is plenty to get another 2 bed apartment) and €50k for me! Not bad. If I go the route of releasing equity that's just basically getting a loan for my own money! No-way am I doing that.

Last option is trading-up which would see all of the equity go straight into a new place which would mean I would be back to where I was two years ago. A nice new property (bigger, better location etc) but no built up equity in it. Which is not a problem as such, but when there's €100k there now, I really would like to take advantage of it.
 
Dont forget that buying back in WILL mean stamp duty in many cases as you are an STB not an FTB . Be very sure that your next purchase will be in a better area than where you are now with a shorter commute and better lifestyle or its not worth the hassle.

You would be better off keeping most of that profit in a war chest. Assume that the 100% mortgage will go with the fairies by end 2007 and that yoru war chest will have to cover

1. 10% deposit in cash from a verifiable source
2. Stamp duty is 5% or 6% up front to B Cowan .

thats 16% of the purchase price of your next gaff in cash. If its a €500k apartment in Dublin you will need to have €150k or so to hand by my reckoning.
 
To be honest I think you did great in 'gaining' an increase in your property especially when you went for a 40yr mortgage. But my advice (and i am a property bear so its only advice) would be to realise your gains. Irish property did speculatively well, so well in fact, that we say figures of 100K,300K like its pocket money. Your '100K' is a substantial amount and by making this money work for you can result in you been in a better position in the future. You have to realise that if we are in a property bubble and its bursts that you may lose all your 100K. That is what happens when a bubble bursts and i agree that you may even make more by saying in the market but you are ,perhaps, gambling 100K on that.

As bigbrother would say.

You choose. :)
 
You could always look for a new build in a better location. If it's under 125sq. mts. then there's no stamp duty. So you'd sell up, pay the car loan and bills and pocket the rest. Then you move in with your friend and his girlfriend, Heidi. I didn't anticipate the yodelling in the bathroom but this is just another cross you'll have to bear!

You pay 10% deposit on new place and put the rest where it will make the most for you. When new place is ready, you can afford to go 30 years on the mortgage because you no longer have that pesky car loan to pay. Bonus, as car loan will disappear immediately after sale, you have more disposable income each month, either to enjoy,save or put into a pension.

My tuppence worth is; the last idea you had is the better one i.e. buy, trade up. Why? Well you always have the asset and the borrowing power it gives you, plus you have the option to rent it if you want to leave the country. Your a STB so no stamp duty clawback. Money, unless it's locked away for a good number of years is eroded by inflation, and although deposit rates will rise, it still won't be great. It's enough to make the cream curdle!!
 
2Pack said:
Dont forget that buying back in WILL mean stamp duty in many cases as you are an STB not an FTB . Be very sure that your next purchase will be in a better area than where you are now with a shorter commute and better lifestyle or its not worth the hassle.

You would be better off keeping most of that profit in a war chest. Assume that the 100% mortgage will go with the fairies by end 2007 and that yoru war chest will have to cover

1. 10% deposit in cash from a verifiable source
2. Stamp duty is 5% or 6% up front to B Cowan .

thats 16% of the purchase price of your next gaff in cash. If its a €500k apartment in Dublin you will need to have €150k or so to hand by my reckoning.
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Well, I'm already a STB now whatever happens so yes Stamp Duty will be an issue (unless I buy new). I couldn't justify spending €500k on an apt though. It would have to be a house and hopefully that would be with a significant other!! therefore splitting the cost. But I know what you mean, even on a house of €500k it's still a hefty sum you need up front.
 
ButtermilkJa said:
You see, I'm now thinking that if I sell, I could land a windfall and then use half of it to get straight back into the market. That's €50k for a deposit (which I think is plenty to get another 2 bed apartment) and €50k for me! Not bad. If I go the route of releasing equity that's just basically getting a loan for my own money! No-way am I doing that.
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This doesn't make sense. If you want an extra €50k for yourself, equity release is more efficient than selling and buying another 2 bed apartment. You still end up borrowing an extra 50k either way.

Option 1 - Equity release:
new mortgage 300k, 50k for yourself

Option 2 - Sell and buy again for same value:
new mortgage 300k, 50k for yourself

But with option 2 you also have - selling costs, buying costs, stamp duty and market risk. You still end up owing the same amount of money, in fact probably more with the additional expenses! I would go with equity release if you want to stay in the property market or just sell if you want the 100k and exit the property market.
 
whathome said:
This doesn't make sense. If you want an extra €50k for yourself, equity release is more efficient that selling and buying another 2 bed apartment. You still end up borrowing an extra 50k either way.

Option 1 - Equity release:
new mortgage 300k, 50k for yourself

Option 2 - Sell and buy again for same value:
new mortgage 300k, 50k for yourself

But with option 2 you also have - selling costs, buying costs, stamp duty and market risk. You still end up owing the same amount of money, in fact probably more with the additional expenses! I would go with equity release if you want to stay in the property market or just sell if you want the 100k and exit the property market.
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Unless the OP can buy a better property in a better location, then it may be a good move.
 
whathome said:
So he would be trading up - he would have to take on a bigger mortgage in order to keep his 50k.
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Unless he can trade kinda sideways at a 20 degree angle and get something better for roughly same price :)
 
whathome said:
This doesn't make sense. You still end up owing the same amount of money...
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Sorry, it probably doesn't makes sense the way I explained it actually. I didn't think about it that way. But what I should have said is that I want to move from where I am. I don't really want to stay in [owning] a 2-bed apt in suburbia. I'd rather own a 3-bed semi that would always be in demand no matter what happened to the market. Or bank my profit and rent a 2-bed apt in suburbia. There's too many apartments & townhouses springing up everywhere and I don't want to be left owning one of these overpriced dolls houses when interest rates go sky high and the market freezes.

I guess what I'm trying to say is I'd rather sell-up/trade-up to something better, more sound, than release the equity in what I have now. Does this make any sense at all? I may be starting to confuse myself! ;)
SteelBlue05 said:
Unless the OP can buy a better property in a better location, then it may be a good move.
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Yes, this is what I would aim for if I traded-up.
 
ButtermilkJa said:
There's too many apartments & townhouses springing up everywhere and I don't want to be left owning one of these overpriced dolls houses when interest rates go sky high and the market freezes.
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A-HA

You are of the opinion that if there is a schlumpeen in Ireland (which will not happen becuase we Irish are different and special and you should know that ) then the shoeboxes in the outer suburbs will get hit disproportionately compared to a bigger place further in ....further in being a better location in city terms .

As the shoebox will then be slower to sell you should therefore consider selling it now while the market is hotter and then you are into the bank with cash in hand when the right place shows up in your price bracket AND you are the mythic cash buyer no chain kind of person.

Unlike much of your peer group you will be liquid while they have to sell in order to buy as they trade up. That itself will be difficult in an illiquid market where they are holding out for top $ for that shoebox of theirs .
 
whathome said:
This doesn't make sense. If you want an extra €50k for yourself, equity release is more efficient than selling and buying another 2 bed apartment. You still end up borrowing an extra 50k either way.

Option 1 - Equity release:
new mortgage 300k, 50k for yourself

Option 2 - Sell and buy again for same value:
new mortgage 300k, 50k for yourself

But with option 2 you also have - selling costs, buying costs, stamp duty and market risk. You still end up owing the same amount of money, in fact probably more with the additional expenses! I would go with equity release if you want to stay in the property market or just sell if you want the 100k and exit the property market.
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As I recall, Buttermilk has a number of objectives; he wants to trade up (doesn't see himself in his current apartment long term). He's thinking of selling in order to gain 100K but also to avoid a drop in the market on this particular property. If he trades up, it'd be for a house which could be used long term as his PPR. He'd also like to pay off his car loan, which is probably costing him an arm and a leg. He would also like to have the option to travel, but is worried he won't be able to get back into the property market on his return.

He's a STB so stamp duty will always be an issue unless he buys new. This cost will be there when he decides to buy again, whether he takes the 100K and runs or not. His mortgage is over a 40 year term, so when releasing 50K equity over such a long term, interest becomes punitive. However, also on his wish list is to reduce this term. As I see it he has an opportunity to trade up now, reduce his mortgage term, buy a PPR for the next 10 years and possibly ride out any storms in the market. He may not have a full 50K left in his pocket but his term will be reduced thereby saving in interet and his car loan will be paid, giving him more disposable income. Am I missing something???
 
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