Selling apartment to survive

LegacyUser

Hi guys just need a quick opinion on this.

Im in my mid 20's.

I got a claim for ~400K when I was 18 (about 2007). My parents basically forced me to buy an apartment for 395K so every cent was gone on the property.

Short story, Years later the property is now valued at ~200K. I am living on social welfare and trying to get work in IT as my degree was is that area.

I am falling behind on management fees/ bills / taxes and everything else.

I want to sell my apartment. Stick 125K in a high interest account. Rent for a little while as I want to go to the states/ Canada to look at my options for work. Using the other 50-60 for living next year or two and perhaps make a few investments etc,

Staying in the apt. is not an option. I know I will be unemployed for at least next 3 months. But I know my starting salary will be 30K and I should be raking it in a few years from now.

Renting it out is not an option as I will net 9K per year from it, then I'd have to pay mgmt fees + taxes + what ever government charge comes down the line.And pay rent on another property.

Somebody tell me its a good idea to sell? Am I mad?

dd972

How's things, I got mildly stung myself by buying a property pre crash albeit I still have to say reading your entry made me cringe.

The way things are now you might be able to buy a house if you pick up €100K plus, at least that would be a step up from a flat and more likely to have sell on value in X amount of years.

dr ro

there's a probability you'll have to pay management fees arrears before you can sell apartment.

username123

Rich_but_poor wrote: »

Staying in the apt. is not an option. I know I will be unemployed for at least next 3 months. But I know my starting salary will be 30K and I should be raking it in a few years from now.

This stands out for me. What makes you think you will be raking it in? Salaries have gone down all over. You are only 23/24 - so not much experience? I dont want to rain on your parade but you cant count your chickens before they are hatched. You may have a degree, but the jobs market has plenty of people with degrees, masters and experience.

I dont understand why you are having such a hard time financially - you have no mortgage right? So its just utilities, groceries and day to day life? Social welfare is 188 a week (forgive me if im wrong) but 188 a week should be plenty when you dont have to pay rent or mortgage - Im not saying its plenty forever but it should certainly cover the basics for a few months until you get work?

If you simply want out - then yes of course, sell, but immediately upon doing that social welfare will retest your means (depending on if you are on JA or JB) and wont give you a cent based on the fact that you have 200k to your name in cash.

Its not a good time to have savings in this country, the amount the government are likely to take in tax (they raised dirt recently) is more than you will pay in property tax.

You might be better off having a one off appointment with a financial advisor who can advise you re the tax situation. It might be better for you to remortgage the apartment, buy a small house outright and then rent the apartment and let the rent cover the mortgage - in that way you can avail of the tax deduction of mortgage interest against rental income.

Actually looking at what I have just posted - it would probably be a bad financial decision to sell up right now. But you should talk to a professional - the above are just my random thoughts.

googled eyes

As said above, if you dont have a mortgage then €188 a week is enough to live on. You wont be living large but you will survive until you can find regular work.

Be proactive with gas/esb, turning off appliances lights etc.

If your desperate for more money in. You could look into renting a room in your apartment. You may not like that idea though but its a monthly income. This could help with bills or could be used to help with management fees.
You could contact the mgmt co. to arrange an easy payment option for fees. The company would be happier with some money coming in monthly than none at all

MissFlitworth

I don't think you're mad. I'm not a whole heap older than you and I wouldn't want the noose of owning a property either, I want to be able to pick up & move whenever it suits me. You should probably give yourself a few months to see if you're maybe panicking at the temporary financial situation and that's the only thing driving you to sell but if you just don't want to live there and would prefer to have the money then I'd go for it personally.

kunst nugget

googled eyes wrote: »

As said above, if you dont have a mortgage then €188 a week is enough to live on. You wont be living large but you will survive until you can find regular work.

Be proactive with gas/esb, turning off appliances lights etc.

If your desperate for more money in. You could look into renting a room in your apartment. You may not like that idea though but its a monthly income. This could help with bills or could be used to help with management fees.
You could contact the mgmt co. to arrange an easy payment option for fees. The company would be happier with some money coming in monthly than none at all

If he's under 25 his dole would be half that. That would be pretty much an impossibility for anyone to try and live on when management fees, bills, etc. are factored in.

ziedth

I think a room mate might be the way to go here if you could stomach it. If your apartment cost 400k it must either be really nice or a great location. You could charge 500 P/M without a mortgage that should be enough to get you through.

"Living" off €60k of your savings isn't medium term a very good idea.

username123

kunst nugget wrote: »

If he's under 25 his dole would be half that. That would be pretty much an impossibility for anyone to try and live on when management fees, bills, etc. are factored in.

There are rules around that and its 144 per week for people aged 22-24. Its not applicable to Benefit, only Allowance. Without knowing more detail its impossible to say what he is on.

Even so - I live in an apartment and utility bills average at out quite low when you live alone if you are sensible (and turn stuff off, dont waste gas and electricity). It would only be around 100 per month, so even on a low rate it still leaves enough for food, management fees etc.. Its still fine in the short term.

username123

ziedth wrote: »

If your apartment cost 400k it must either be really nice or a great location.

Not necessarily. 2007 was the absolute height of the boom. The apartments I live in were selling for 400k then, they are neither gorgeous nor in a great location. They are worth possibly worth under 100k now.

I would question the OPs valuation of his apartment. It may be worth a lot less than the thinks if he goes to sell.

Even 300 or 400 a month would help if he rented a room though.

googled eyes

kunst nugget wrote: »

If he's under 25 his dole would be half that. That would be pretty much an impossibility for anyone to try and live on when management fees, bills, etc. are factored in.

I hadn't thought of the reduced rate for under 25's.

I still think rent a room scheme is a good idea. €500 a month specifically for bills and management fees would go a long way.

Although the OP does want to go to the States/Canada so probably has already made their mind up and just wants to be told that they're not mad wanting to sell.

OP if you really want to sell, then sell. You won't have mgmt fees or a property tax to pay. But depending on where you want to live, you may find that the cost of renting+bills ends up being higher than the annual mgmt fees, taxes? and bills you now pay

Edit: I'm in no way trying to sound smart or anything by saying sell. I just think they're made up their mind

username123

googled eyes wrote: »

OP if you really want to sell, then sell.

Thats the nub of it really. Does the OP want to do something that makes the best financial sense, or something that makes the best personal sense?

There are costs involved in maintaining a property - tax, mgt fees, upkeep etc... If you are not into it - you dont have to do it.

LegacyUser

Ah the Irish obsession with owning property - been in your shoes OP with parents putting on pressure when I got some money to go buy a house straight away, got a house and then wanted to go travel and explore and felt just trapped in an area I didn't like. Sold the house and honestly never looked back.

Owning an apartment is very different to renting. The OP is young and wants to travel and we've enough cow boy landlords without the OP trying to manage renting his place while overseas and he wouldn't want it sitting empty and he'd still have to pay the management fees. If the OP was trying to sell because he was in negative equity and just didn't want to deal and planned to run away from his debts like loads of threads on the Accommodation and property forum are asking then I'd give different advice but the OP owns the property outright, reality is it is never going to be worth 395K again and if they want to sell they should sell.

blatantrereg

I wouldn't assume your apartment will increase in value. It might decrease further. If you are having problems making ends meet then selling it makes sense.
I wouldn't assume you'll get work in IT in the USA or Canada if you can't here. You might be better off trying to improve your CV instead.

LegacyUser

OP HERE:

Thanks everybody.

I forgot to mention it is a 1 bed and the bills are out of control.

For example, when all appliances are off, the meter is still flying around! My electricity bill is higher than my mums (3 bed house)and my sisters (2 bed house) individually of course.
I have called up the electric company but they treat you like an idiot saying your fridge this and you must have a kettle plugged in somewhere and immersion left on blah blah blah.

I get about 2/3rds of the bills paid before they come again + late payment fee of 12.50 for the last 12 months every month from UPC thrown on top.

My problems paying bills etc has been going on for last 2 years at least.

I hope some of you will be happy for me that I have accepted an offer of ~200k and should be moving on with my life soon. I don't think I want to live in Ireland for the rest of my life so this makes sense to me.

I happen to be in a prospective job "situation" at the moment where my potential manager told me out right of my starting salary. As I have some experience, and people are crying out for guys in my area of work. (which is very specific).

I just want to be free for a while and travel and enjoy life before I commit to something. Buying the apartment was not my choice and it cost me two hundred thousand euro. Let me enjoy my money and be done with it.

Thank you all for your responses. I'll drop you all a post card from where ever I end up in this cray world

blatantrereg

Rich_but_poor_OP wrote: »

OP HERE:

Thanks everybody.

I forgot to mention it is a 1 bed and the bills are out of control.

For example, when all appliances are off, the meter is still flying around! My electricity bill is higher than my mums (3 bed house)and my sisters (2 bed house) individually of course.
I have called up the electric company but they treat you like an idiot saying your fridge this and you must have a kettle plugged in somewhere and immersion left on blah blah blah.

I get about 2/3rds of the bills paid before they come again + late payment fee of 12.50 for the last 12 months every month from UPC thrown on top.

My problems paying bills etc has been going on for last 2 years at least.

I hope some of you will be happy for me that I have accepted an offer of ~200k and should be moving on with my life soon. I don't think I want to live in Ireland for the rest of my life so this makes sense to me.

I happen to be in a prospective job "situation" at the moment where my potential manager told me out right of my starting salary. As I have some experience, and people are crying out for guys in my area of work. (which is very specific).

I just want to be free for a while and travel and enjoy life before I commit to something. Buying the apartment was not my choice and it cost me two hundred thousand euro. Let me enjoy my money and be done with it.

Thank you all for your responses. I'll drop you all a post card from where ever I end up in this cray world

The meter should not be moving at all if everything is off.

I rented an apartment before where the same thing was happening. On investigation I discovered that a neighbour, who was told they had free electricity, was on my meter.

Further investigation revealed that the landlord had not received planning permission for the number of apartments there were in the building, which was a converted Georgian house in D4. Likewise he had not being paying tax on rent from all his tenants. He had been renting out the apartments for over 10 years so the amount of tax he dodged must have been considerable.

He attempted to bully me so I reported him to revenue. I saw the house went up for sale soon afterwards.

I'd sell it if I were you.

Perhaps I'm mad, but instead of looking at it as a massive loss, I'd focus on the fact you were given a sum of money (for whatever reason) most of us could only dream of. It's a shame your parents' bad advice led to you squandering it on an apartment at the wrong time, but even if you sell it now, you'll be left with a massive amount of money. If you do go abroad, you'll have a security blanket of plenty of money in the bank to set yourself up.

Owning a flat isn't that great if you can't find any work in Ireland. As much I'd love to own my own place, I'd hate to be trapped in it and forced to stay in one place, wasting my twenties.

As someone else pointed out, though, you can't expect to claim the dole in Ireland while you hang around, with 200K in your bank account. If you're going, you need to go asap. I wouldn't try to 'live off' my savings either, I'd just try to find work and keep all the money in the bank. 200K could well buy a nice property down the line, or be used for something important. I wouldn't fritter it away by 'living off it'. I don't know why you would ever do that. Just find work straight away! If you go abroad, it's pretty much guaranteed, whether it's your dream job or not.

sashafierce

This post has been deleted.

username123

Something doesnt make sense in this story. People are crying out for guys in your line of work yet youve been struggling with the bills for 2 years? huh?

Anyway, glad you did what was right for you.

Glad this is sorted OP