What Are Our Options?

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NotMyRealName72

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Personal details

Your age: 53
Your spouse's age: 63

Number and age of children: one young adult daughter still living at home

Income and expenditure
Annual gross income from employment or profession: €62,400 - Civil Service plus have small occupational pension of €133pm
Annual gross income of spouse/partner: €38,400 - on Social Welfare (invalidity pension) plus rental income from property solely in their name

Monthly take-home pay:
Me: €3600 approx
Spouse: €2,200 approx

Summary of Assets and Liabilities
My home value: €480,000 BER B3
Mortgage on home: €200,000
Net equity: €280,000

Spouse home value: €300,000
Mortgage on home: none
Net equity: €300,000 - sale of this house would be subject to CGT as rented out for past 3 years.

Cash savings: €15,000
Defined Contribution pension fund: n/a

Total net assets: >€500k

Family home mortgage information
Lender: AIB
Interest rate: 2.95% 10 year fixed - 7 years remaining

Remaining term: (Original term is not relevant) 15 years
Monthly repayment: €1,330

Other borrowings – car loans/personal loans etc

Personal Loan (Avant): €392pm

Car loans: me: €455 Spouse: €250

Do you pay off your full credit card balance each month? No
If not, what is the balance on your credit card? €10,500

Pension information

Value of pension fund: Civil Service pension (13 years contributions) & PRSA (€30k) spouse has no pension

Buy to let properties
Value: €300k
Rental income per year: €24,000
Rough annual expenses other than mortgage interest : €12-14k in tax and expenses

No mortgage on this

Other savings and investments:

Gave €13k interest free Loan to daughter to purchase car and car insurance - she's paying it back at €400pm

Other information which might be relevant

Life insurance: only have decreasing life insurance for myself

What specific question do you have or what issues are of concern to you?

Looking for advice on our situation. We got married 5 years ago, and kept our respective taxes separate based on advice given at the time. Spouse rents out their property, fully declared with RTB, taxes paid etc. I have made a lot of improvements on my house, new windows, solar panels, upgraded gas boiler etc. My house went from an D1 to B3.

The past 12 months my partner's health has declined, they have acquired a disability that now necessitates changes, including an accessible downstairs bedroom & bathroom etc.

The Tenant has just moved out, there is more space to extend at this property. Cost to upgrade and extend is about €150k approx. net of grants. I could extend my house, but there's limitations, for around €70-100k

But we are unable to get a mortgage due to my partners age and situation; we've been told that our only option would be to sell my house, clear mortgage and use funds to fix up the other house. This is causing a rift between partner (in favour) and daughter (not in favour)...

Are there any other options available to us to keep both houses? Open to advice and suggestions.
 
I am sorry to say, but you have a pretty big outstanding personal loan (how much is the interest rate on the Avant loan? Is it a different loan than the credit card debt or is the same?) that I would look to close before thinking of 150k upgrades to the rental property.
I understand that due to your partner's health you are in a bind, but maybe you can try doing the absolute minimum required so your partner can live comfortably (such as converting the living room downstairs in a bed room at least temporarily) and rent out the other house.

I don't think you can afford to have two houses AND perform 150k worth of upgrades in your current situation.
 
What is the daughter’s objection? Is it that she is a student, or unemployed, or she has an attachment to her current home? Does she feel abandoned? It is hard to tell from what you have written but it is probably important for you (not us) to know, and help her as an adult understand that life does not remain the same forever and that you and your spouse need to do best for you as a unit. She has obviously negotiated one change when you married your current husband and he moved into your house, but maybe she has held a lot of resentment since then.

So what I am saying is that as a young adult there would always have been an expectation she would move out to live her own life, with her own independence and responsibilities, and maybe she felt she could decide when that was going to happen but she as an adult needs to negotiate that it may not happen to her time frame but it will still happen.

The clearest option financially is for you to sell your current home, move to your spouses home and do the upgrade with any profit you make from sale.

Assets
House 1 €480K
House 2 €300K
Savings €15K

Debts
Mortgage €280K
Car loan 1 €?
Car loan 2 €?
Personal loan €?
Credit card €10K

Assuming your loans are all €10K each this leaves you with net assets of €425K which would mean you would have €125K to do up house 2 if you sold your current house and cleared your debts. So maybe €100K to spend on the house leaving you needing a €50K loan.

I would think it is doable if you can take a 10 year loan for the €50K. Would you be able to live in the rental house as the upgrades are being done as I would think you cannot progress until you sell your current house. But what about your daughter?
 
Eh....can't help with your query, but your screen name is pretty close to mine. Are we related? Or is imitation the sincerest form of flattery??
Why didn't you try Brendan Burgess72 or Clubman72 or S Class 72 or leper72 or a host of other giants72 . I'm just like Gatsby.......great name but not much else.
 
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The price of building/upgrades is astronomical at the moment. I would worry that 150k may not go as far as you want.
The daughter may see selling your house as losing her home or future inheritance.
 
NotMyRealName72 said:
Net equity: €300,000 - sale of this house would be subject to CGT as rented out for past 3 years.
Click to expand...
When was the house purchased? And for how much? Your spouse is almost certainly building up an increasing capital gains liability on eventual sale as long as the house remains let. This could be a large chunk of the net rental income on an annual basis.

With apologies for being morbid but any capital gains liability disappears when your spouse passes away. So your spouse is probably better off selling soon or planning to hold on to the rental for life.

Otherwise you need to look across your needs and resources jointly. At the level of the married couple I don't think it makes sense to be carrying such a large mortgage of over 3x income in your mid-50s while having expensive credit card debt. The rental is great until it isn't - this website is full of stories of rogue tenants causing damage and not paying rent. A lot of risk would be reduced by selling one property or the other and investing the proceeds into renovations that improve quality of life for everyone.
 
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