Building a new home, what to do with current home?

iron1234

Looking for some advice regarding what to do with my current house when my wife and I build a new home on a site we own.

I bought a 3 Bed semi house 6 years ago as a single person, with the mortgage etc. all in my own name. I bought the house for €175k, with monthly repayments now around €900 per month. Going on current market value and what some houses in the same estate have sold for recently, I should be able to sell it for €255-270k. There is roughly €140k remaining on the mortgage, so if I sold now I should have around €110-120k in cash after the sale.

We have been granted planning on a site we own and the house we have planning permission for is going to cost in the region of €400-420k to build via a contractor, may be able to reduce this by going direct labor route but not sure if we want the hassle.

What is the best thing from a financial point of view to do with the home I currently own? Do I sell now and put the cash profit into building the new house to minimize the amount we need to borrow to build the new house, there by saving a few hundred per month on mortgage repayments? Or should I hold on to it and rent it out? Rent for similar houses in the area is about €1400 - €1500 per month.

Any advice from anyone who has been in a similar situation would be appreciated.. At the moment, leaning towards selling current house as not sure if renting out a house for a small profit every month is worth it, considering the amount we would be guaranteed to save on our own repayments for the new house.

Thanks!

Padre_Pio

https://www.boards.ie/discussion/2058368688/building-a-new-home-what-to-with-current-home

Where are you going to live while your new house is being built?

iron1234

https://www.boards.ie/discussion/comment/122608109#Comment_122608109

We can live with Family for duration of the build.

Padre_Pio

https://www.boards.ie/discussion/comment/122608118#Comment_122608118

Yikes! I would stay in the house and eat the few thousand extra in repayments for the sake of my sanity.

Where do you store a house worth of furniture and personal possessions? Where do you go if you want some time alone with your wife? What happens if relations get a bit strained over the 2 years it may take to get your new house to a liveable standard?

I would be more worried about this than interest payments.

iron1234

https://www.boards.ie/discussion/comment/122608146#Comment_122608146

Thanks for the advice

Doodah7

Being a landlord today in Ireland is simply awful. Sell the house and take out a smaller mortgage and/or put money to nice kitchen/furnishings etc. You will be able to enjoy your new house without the baggage of the old one.

FishOnABike

What would the after tax income if you rented your current house? Would it even cover repayments? And hat is if you being a landlord was totally issue free. After tax, I'd doubt it's worth the effort or risk.

To me selling up and putting the money into your new house seems a better option.