Multiple properties need help in moving.

Psygnosis

Hi
Need some advice we are a family of 5 that will be looking to move in the next year all going well.
This is where it gets complicated and I’m hoping you guys can give me some advice.
We have a couple of properties that we will need to sell and looking for the best way of doing this.  I’ve spoken to a couple of financial advisors and and have been told we won’t get a mortgage without shifting the property in west cork.  I’ll list the properties now to make things more apparent.
I should mention that my wife will get redundany in the next year which will work out a good chunk maybe 90K we will also have savings of 40K maybe more.
1                     Primary residence.  Rush 3 bed semi d
Mortgage outstanding 240K 80K tracker remaining SVR
Value Unknown.  House has pyrite ( but no damage showing rating is high amber)
Rental value would be 1200 Monthly
Mortgage repayment 1000
 
2                     Rental Property Dublin 15 wifes original house
Mortage remainging is 120K
Value 240K
Rental is 1100 (10 year lease would have to be sold with tenant in situ)
Mortgage Repayment is 700
 
3                     Rental property in West Cork Jointly owned with sister in law (wife bought it 10 years ago with her sister)
Mortgage remaing is 180K (90k wifes portion)
Value 125K
Mortgage repayment 800 each a month
Rental never recieved a penny is in a bord failte sceme it comes out of this year so can rent it privately.


The property in west cork is killing us.  We will be asking the sister in law can we pay our portion of the negative equity and leave the mortgage behind.  But I have a feeling this may not be an option for her as she is building her own house at the moment.  So may not be in a position to do this
.
So the scenarios that I have put together in my head are.
 
Sell No2 for the equity release.  Use this equity to remediate the pyrite issue we have and then sell this house, that idea would say eat up 70K ish.  30k for pyrite remediation and taking a hit of 40K negative equity.

Sell No2 again, pay 90K off the mortgage in Cork and get removed from the mortgage while leaving name on the deeds, will have to see what the legality of that is.

Finding it very difficult to come up with a solution to this.  Our house in Rush is a 3 bed semi that has become too small for our needs and we would love to move out to the country side if possible.  Our kids are very young 2 1/2 year old and twins who have just turned 1.

Obviously the best solution would be to relinquish our interest in the house in west cork but this may just not be possible. As I could rent my house very easy as there is a huge demand for rental properties where I live.
Any help would be greatly appreciated.

johnnyskeleton

Are financial or location matters your primary concern? I would suggest you decide where you want to live and then speak to a bank regarding how you might be able to finance this property. They may advise you to sell the properties, or they may not.

Personally id prefer to have one house and low debt than 3 houses and higher debt, but thats a personal choice

Psygnosis

Johnny
I agree completely, this would be the ideal solution. Houses we have looked at range from 300 to 400k. I just need to figure out how we get there. The house in Rush is the tricky one as it has pyrite and the estate isnt finished it should be done it a year or 2 but house will also need to be re-mediated. This means moving out for 3 months if I could tie this in with purchasing a place it would help.

johnnyskeleton

Another option, although id get professional advice before embarking on it, would be to look into extending the Rush house if you need another room and cutting into the garden is a viable option.

I suspect that a house with pyrite will be very hard to sell - ive heard it said banks will not give a mortgage on one - and very costly to remedy. Equally, however, there is the risk of throwing good money after bad.

Best of luck wih it anyway, its certainly not an easy sceanrio to deal with

davo10

Op you have to factor in capital gains tax on any non principal residence sold. You get some grace after you move out so your wife's house might not get taxed if she lived there within the last four years ( I think it's 4, you will need to talk to an accountant).

Just because you pay off your portion of the house in cork does not mean you are off the hook for the mortgage on it. Joint buyers are joint and severely liable for payments so if your wife's sister decided to stop paying the mortgage after you paid off your half, you would still be liable for the payment of her part and the bank will always identify and follow the person who can pay. What happened to the then minister James Reilly is a prime example of this.

Is the 10 year lease a family member, if not why is the lease term so long? Nearly all buyers will want vacant possession so you will need to tak to a solicitor. €1100 might be low for rental in that area so you can expect a fight when you try to terminate the tenancy, you may have to pay the tenant off to get them out. Add that to the likely capital gains tax and you may not have much left over.

Psygnosis

davo10 wrote: »

Op you have to factor in capital gains tax on any non principal residence sold. You get some grace after you move out so your wife's house might not get taxed if she lived there within the last four years ( I think it's 4, you will need to talk to an accountant).

Just because you pay off your portion of the house in cork does not mean you are off the hook for the mortgage on it. Joint buyers are joint and severely liable for payments so if your wife's sister decided to stop paying the mortgage after you paid off your half, you would still be liable for the payment of her part and the bank will always identify and follow the person who can pay. What happened to the then minister James Reilly is a prime example of this.

Is the 10 year lease a family member, if not why is the lease term so long? Nearly all buyers will want vacant possession so you will need to tak to a solicitor. €1100 might be low for rental in that area so you can expect a fight when you try to terminate the tenancy, you may have to pay the tenant off to get them out. Add that to the likely capital gains tax and you may not have much left over.

The 10 year lease is with Fingal co co. So can't cancel it Fingal get first option to purchase. If we do sell it. It will be sold as an investment property and price will reflect this. Thanks everyone for your help so far

spaceHopper

Guy I know had a boom time house in Carrighmines, it became too small for his family they were lucky they found a house to rent that belonged to a developer, they rented out their house and rented the bigger one. Came out cost neutral in the end. Can you do the something like that rent out your rush house rent a bigger on and buy some time for pyrite issue to be resolved and for prices to settle down.

I've two year old twins my self so I know how busy life is. Also how big is your garden in Rush, could you get more space by putting in a large garden shed, we got a 12x7 pent shed make a big difference having somewhere to store all the clutter kids and grown up accumulate.

The_Conductor

@Psygnosis - your situation is ridiculously convoluted.
I'm sorry- but no lender in their right mind will lend you more money- until you unravel your various holdings. Sell- even if it means you have to rent somewhere yourself- get rid of all of the holdings- crystalise the losses, come up with a plan to pay for the deficit- and then approach a lender.

You have far too many obligations as is- no sane lender will lend more money to you until you sort out your finances.

audi12

Psygnosis wrote: »

Hi
Need some advice we are a family of 5 that will be looking to move in the next year all going well.
This is where it gets complicated and I’m hoping you guys can give me some advice.
We have a couple of properties that we will need to sell and looking for the best way of doing this.  I’ve spoken to a couple of financial advisors and and have been told we won’t get a mortgage without shifting the property in west cork.  I’ll list the properties now to make things more apparent.
I should mention that my wife will get redundany in the next year which will work out a good chunk maybe 90K we will also have savings of 40K maybe more.
1                     Primary residence.  Rush 3 bed semi d
Mortgage outstanding 240K 80K tracker remaining SVR
Value Unknown.  House has pyrite ( but no damage showing rating is high amber)
Rental value would be 1200 Monthly
Mortgage repayment 1000
 
2                     Rental Property Dublin 15 wifes original house
Mortage remainging is 120K
Value 240K
Rental is 1100 (10 year lease would have to be sold with tenant in situ)
Mortgage Repayment is 700
 
3                     Rental property in West Cork Jointly owned with sister in law (wife bought it 10 years ago with her sister)
Mortgage remaing is 180K (90k wifes portion)
Value 125K
Mortgage repayment 800 each a month
Rental never recieved a penny is in a bord failte sceme it comes out of this year so can rent it privately.


The property in west cork is killing us.  We will be asking the sister in law can we pay our portion of the negative equity and leave the mortgage behind.  But I have a feeling this may not be an option for her as she is building her own house at the moment.  So may not be in a position to do this
.
So the scenarios that I have put together in my head are.
 
Sell No2 for the equity release.  Use this equity to remediate the pyrite issue we have and then sell this house, that idea would say eat up 70K ish.  30k for pyrite remediation and taking a hit of 40K negative equity.

Sell No2 again, pay 90K off the mortgage in Cork and get removed from the mortgage while leaving name on the deeds, will have to see what the legality of that is.

Finding it very difficult to come up with a solution to this.  Our house in Rush is a 3 bed semi that has become too small for our needs and we would love to move out to the country side if possible.  Our kids are very young 2 1/2 year old and twins who have just turned 1.

Obviously the best solution would be to relinquish our interest in the house in west cork but this may just not be possible. As I could rent my house very easy as there is a huge demand for rental properties where I live.
Any help would be greatly appreciated.

Might have been an idea not to buy overpriced houses in the boom at least you are not one of those cowards bailing out and passing the debt on to me

The_Morrigan

audi12 wrote: »

Might have been an idea not to buy overpriced houses in the boom at least you are not one of those cowards bailing out and passing the debt on to me

Might be an idea for you to read the charter and familiarise yourself with the ethos of the forum.
If you don't have anything constructive to say then keep the smart posts to yourself.

audi12

im offering advice dont buy overpriced property

The_Morrigan

audi12 wrote: »

im offering advice dont buy overpriced property

You're not offering any advice, you're trying to be smart.
Also, you do not argue moderation on thread - this is a site wide rule.

Do not post here again.

the_syco

Psygnosis wrote: »

3                     Rental property in West Cork Jointly owned with sister in law (wife bought it 10 years ago with her sister)
Mortgage remaing is 180K (90k wifes portion)
Value 125K
Mortgage repayment 800 each a month
Rental never recieved a penny is in a bord failte sceme it comes out of this year so can rent it privately.

On the Bord Failte Scheme; this the holiday thing? If so, perhaps looks to sell it to the foreign market as a holiday home?

audi12 wrote: »

im offering advice dont buy overpriced property

The joys of working in certain sectors of the government (example, Gardai, nursing, etc), you can be moved across the country.

Psygnosis

I'm not going to get into a slagging match with anyone. My wife owned her own house and bought an holiday home with a family member before we met. i bought my own house as well just as we started dating. In no way did we try and play the market. If my house did'nt have pyrite and the estate had been finished it would be in positive equity now. Unfortunately the builder went bust and nama owns the estate and the main priorty for them is to sell the unfinished houses. They are now getting pyrite remediation carried out by nama. I chased the builder pyrite board solicitors tds and councilors. It's a case of lump it and pay for it yourself or rent it out.

Marcusm

Psygnosis wrote: »

I'm not going to get into a slagging match with anyone. My wife owned her own house and bought an holiday home with a family member before we met. i bought my own house as well just as we started dating. In no way did we try and play the market. If my house did'nt have pyrite and the estate had been finished it would be in positive equity now. Unfortunately the builder went bust and nama owns the estate and the main priorty for them is to sell the unfinished houses. They are now getting pyrite remediation carried out by nama. I chased the builder pyrite board solicitors tds and councilors. It's a case of lump it and pay for it yourself or rent it out.

Basically caught by all the difficulties of the Tiger market.

I think you need to reduce the size of this portfolio if you want to have a more sensible life.

Firstly, do not pay off any excess debt on the co-owned property unless the co-owner is paying it down at the same time. THe mortgage will be over the entire property so any debt paydown will, in the event that the co-owner can't pay, simply leach away from you.

Is there any interest in selling off the holiday property? Can your sister in law absorb her portion of the negative equity? It would greatly simplify your finances if all your loans are within your own control.

What price did your wife pay for her original property and how did she live in it as PPR before renting it out? You need to establish what level of taxable gain (and thus tax) might arise if you were to sell it. This tax would obviously reduce what capital you ahev to bring forward to the next property. The latent loss on the holiday investment could shelter this if it was realised in the same calendar year (or prior to the sale of your wife's original home).

Your wife's original home is subject to a 10 year lease - is this like a RAS arrangement? If the local authority has first option to purchase, does the lease terminate if they choose not to purchase? You should look into this as otherwise the price you would achieve for the house subject to an encumbrence is substantially less than what you might perceive the value to be. A 5.5% (implied) gross yield on a single property in D15 is not that attractive - you'll have a small pool of prospective purchasers.

The Rush property - you're likely stuck with this unless you want to take a bath. From what you say, the house has problems which can be resolved but which will always be like a Scarlet Letter A on the title and the estate is as yet unfinished. When building seriously recommences in north Dublin, there will be plenty more choice and it will still attract a discount. If you like the area, and can commit to it long term, it might be worthwhile seeking to extend/modify that house to meet your needs. However, if you are likely to move or need to move, it may make sense to remediate the pyrite but it would make no sense to sink any more money into the house unless you can be sure of a return.

Van.Bosch

Psygnosis wrote: »

I'm not going to get into a slagging match with anyone. My wife owned her own house and bought an holiday home with a family member before we met. i bought my own house as well just as we started dating. In no way did we try and play the market. If my house did'nt have pyrite and the estate had been finished it would be in positive equity now. Unfortunately the builder went bust and nama owns the estate and the main priorty for them is to sell the unfinished houses. They are now getting pyrite remediation carried out by nama. I chased the builder pyrite board solicitors tds and councilors. It's a case of lump it and pay for it yourself or rent it out.

With the pyrite being in Amber status, is it the case that it will eventually go to a stage where it will be severe enough so that the pyrite board will pay for it? If so renting it out seems the way to go but in your situation it will leave you with three properties and no where to live and it would be difficult to get a mortgage.

Psygnosis

Van.Bosch wrote: »

With the pyrite being in Amber status, is it the case that it will eventually go to a stage where it will be severe enough so that the pyrite board will pay for it? If so renting it out seems the way to go but in your situation it will leave you with three properties and no where to live and it would be difficult to get a mortgage.

Well .6% is the tresh hold it was 1% up to 2 years ago. Mine 1.2%, so I've been told that you may or may not get damage. I can see some small signs of it. Couple of cracks on door frames. Engineer said pyrite board would see these as settlement cracks and untill something significant changed so a big crack you would not be eligible..
Renting it out brings its owns issues, as the pyrite board will not re-mediate if the house is not your primary residence.

I'm nearly of the opinion now I just sell the damn thing and loose a small fortune on it and move on, I'm not even sure if I could sell it. Spoke to my engineer today about re mediating it and as I am a semi d house there is no point unless my neighbor does too. As heave from his if mine is re mediated could cause damage.

What get's me is a whole load of houses that are unsold and semi d to house that are in private ownership have been re mediated and I bet my bottom dollar that they are going to be flogged to unsuspecting punters and be told house is now fine it's been re mediated. These people will be unaware of the potential damage the neighboring house will cause. Same with the block of apartments in the estate one of them has been re mediated rest are in private ownership

Van.Bosch

You raise an interesting point regarding semi d houses, does your neighbour show any signs of wanting to get theirs fixed?

I think you would struggle to sell because as you say any buyer will most likely get a survey and the engineer may show same concerns re neighbour. When you say you have signs of pyrite are these cracks on the vertical walls above the door frames or across the ceilings? On the ceiling could be settlement but above doorways would always scream pyrite to me.

If you want more space (is attic/extension an option?) then it seems another mortgage is unlikely at present. Have you spoke to the banks? With your wife's upcoming redundancy, is she going to get another job?

It's a tough situation and it's clear you were not out there trying to be a property tycoon but for various reasons you now own three houses and don't want to live in any of them and none are easily sellable.

I don't really have any advice unless you can force a sale in the holiday home or the other home in the co co scheme?