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Mortgage advice on rental property

  • 06-04-2017 11:38am
    #1
    pkvader
    Registered Users, Registered Users 2 Posts: 329 ✭✭


    Hi,looking for a bit of advice,I bought a one bedroom Apartment 13 years ago, the recession kicked in a few years later and I became an accidental Landlord.I've been renting the property for 7 years,I bought a house and have had a family in this time.

    I'm getting €550 a month from my tenant,my mortgage repayments on the apartment are €690.Paying the €140 shortfall a month was ok for a few years,but now I have a couple of kids and I'm really beginning to feel the pinch.

    The Mortgage on the apartment is with Ulster bank,there's 17 years left,my next yearly statment should have me under the €100k left to pay on the mortgage.

    Basically I want to know is it worth my while contacting Ulster bank and seeing could my mortgage be restructured to get my monthly payments down?,do any of you have any experience of dealing with a Ulster bank,I'd appreciate any advice.thanks.

    P.S (I've never missed a payment in 13 years also,if that makes any difference)


Comments

  • #2
    Boater123
    Closed Accounts Posts: 312 ✭✭Boater123


    Does the bank know you're renting it out?


  • #3
    pkvader
    Registered Users, Registered Users 2 Posts: 329 ✭✭pkvader


    Boater123 wrote: »
    Does the bank know you're renting it out?

    Yes


  • #4
    pkvader
    Registered Users, Registered Users 2 Posts: 329 ✭✭pkvader


    <deleted quote snipped>

    It's 10k outside the nearest city,in the countryside, a typical small development built in the boom.The apartment is small and the tenant is there years,so I don't want to up the rent.
    No the value today wouldn't exceed 2004,if was a house yes,but not an apartment.


  • #5
    Graham
    Moderators, Society & Culture Moderators Posts: 17,643 Mod ✭✭✭✭Graham


    Two questions immediately jump out from your OP.

    1) how is your shortfall only 140 when you take into account other costs including tax on the rental income?
    2) Do you really think refinancing is the answer to continuing to subsidise your tenants rent?


  • #6
    [Deleted User]
    Posts: 24,714 ✭✭✭✭ [Deleted User]


    pkvader wrote: »
    It's 10k outside the nearest city,in the countryside, a typical small development built in the boom.The apartment is small and the tenant is there years,so I don't want to up the rent.
    No the value today wouldn't exceed 2004,if was a house yes,but not an apartment.

    If there is scope for upping the rent you are mad to not increase it (you should have increased it at every opportunity). Putting yourself through hardship to subside your tenants housing cost makes zero financial sense, it's madness.


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  • #7
    pkvader
    Registered Users, Registered Users 2 Posts: 329 ✭✭pkvader


    Graham wrote: »
    Two questions immediately jump out from your OP.

    1) how is your shortfall only 140 when you take into account other costs including tax on the rental income?
    2) Do you really think refinancing is the answer to continuing to subsidise your tenants rent?
    I guess what I mean is I paying €140 out of my own pocket every month to cover the mortgage.

    May be i should look into upping the rent,I've just let it as is for years.


  • #8
    DubCount
    Registered Users, Registered Users 2 Posts: 1,094 ✭✭✭DubCount


    OP. You could certainly ask the bank for a period of interest only. The worst they can say in no. It might help give you some breathing space, and it would improve your cash flow without impacting on your tax bill.

    What is the gap between the value of the apartment and the 100k left on the mortgage? If you are not in negative equity, I would be tempted to sell up.


  • #9
    pkvader
    Registered Users, Registered Users 2 Posts: 329 ✭✭pkvader


    DubCount wrote: »
    OP. You could certainly ask the bank for a period of interest only. The worst they can say in no. It might help give you some breathing space, and it would improve your cash flow without impacting on your tax bill.

    What is the gap between the value of the apartment and the 100k left on the mortgage? If you are not in negative equity, I would be tempted to sell up.

    The apartment is probably worth a bit more than the €100k mortgage,I thought about selling up but I'm still a very young man and should probably stick it out.I've a good tenant in there the last 4 years,so may be i should just stick it out.
    Thanks for your replys lads,I'm really just exploring my options.


  • #10
    dori_dormer
    Registered Users, Registered Users 2 Posts: 1,919 ✭✭✭dori_dormer


    Unless your on a tracker or fixed rate you can shop around mortgage wise every year to get the best deal.
    There is no harm talking to UB about refinancing, but in all honesty unless you think it's going to seriously go up in value in the next 10 yrs , it's probably going to be a money pit. After 13yrs a lot of things will need replacing , kitchens , carpets, bathrooms etc. It probably won't be cost effective in the short term


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