I'm currently a homeowner on a tracker mortgage and have planning for a house. We have met with banks and assured we can afford to keep our home if we wish and access enough funds to build a new home.
We would probably make 30-40k if we sold our house now but I'm considering holding on to it a rent it out. The rent would easily cover the repayments on it plus help with tax at the end of the year and maybe other little issues that may arise!
I'm hearing horror stories though about some tenants and cost implications but maybe they are few and far between.....
Is it too much hassle?????
Should I just take the cash and lump it into the new build????
Any advice would be much appreciated
whats your tolerance for been pillared as the bad guy even when your been treated like dirty from a Tenant ? Do you know the rate of tax you will pay ?
I'm aware of the tax I'll have to pay alright. I'm not a city dweller so it won't be as cutthroat as the city!
I'm more concerned about a dodgy tenant over having no tenant for a period of time.
When I say dodgy I mean someone who stops paying and then leaves with the place in a mess.
If they leave that is. The ptrb is totally for the tenant
I've heard exactly that too! If you were in my position what do you think you'd do?
sell as fast as you can
that 30=40k profit could be minus next week
I wouldn't advise anyone to rent a property if there's a profit to be made by selling it. One of the happiest days of my life (and equally heartbreaking when we saw the state of the place) was the day our last tenants moved out.
You'll pay capital gains tax on the difference of the house value when you start renting it out and the value on the day you sell.
My sister sold a house last year & had to pay 75k capital gains tax. She was renting it for around 15 years.
Just something to work into your equation
The bolded above is not without cost too.
If you had taken that 30-40k and thrown it to reduce the intial cost of your new house how much extra would that have saved you over the term of the new mortgage?
Could the extra deposit possibly reduce the loan to value rate!
I'd say sell the house. Being a landlord isn't worth the hassle and you don't know what the government will change next. The new rent pressure zones are short-sighted and even if you're not in one now doesn't mean you won't be in one in the future. Plus taxes could rise and that's before you have a problem tenant.
Ye I know could save a lot of money putting it in the new house alright... The vibes I'm getting here is to sell it off, get the few pound and put it into the new build...
I wouldn't deal with the stress to well if things got messy so maybe this is the way to go!!
Anyone suggest otherwise??
If it was a decent 4 bed house in Dublin I would do it. I personally wouldn't take on the BS of being a Landlord in the country where you might rent a house for €600-700 a month. If the boiler goes, that is €2,500. The washing machine goes, there is another €500. Renting a country house is not worth the hassle for me
Although you have a tracker, which is basically free money. It might pay to be a landlord since you have such a cheap mortgage.
You have to ask yourself are you ok with getting up at 12am to deal with a burst pipe or having to deal with the personal issues of the tenants ie I know a landlord whose tenants ended up being addicts and the landlord had to get the Gardai to go collect rent with him.
The cons of being a landlord outweight the pros for most landlords
You're also very unlikely to be allowed to keep the tracker. Although most do. If you are going to pull a fast one on the tracker that's one less bank to get a mortgage from.
I investigated the possibility of doing a 10yr lease to the council before -not the RAS scheme BTW- but didn't go through with it in the end (just stayed in the house).
Guaranteed rent every month, generally they offer about 80% of whatever is on the most recent daft report in your area, add an extra bedroom if you can.
Hand keys to council start of year one, get keys back end of year 10.
Never meet the tenant.
Never any calls to fix stuff.
Takes a little bit to get the house up to spec but tempting alternative to being a regular hassled landlord.
Op, what situation would you be in if there was a 2% increase in interest rates over the next 3 years? How does the repayments stack up compared to the rental income.
Especially if the rent increase gets capped at a Max of 4% per annum