I'm considering selling a property that i own (joint own with spouse) but lack the financial knowledge to make an informed decision to do so.
Apartment bought in 2006: 310000
Mortgage: Tracker 1.63 + ECB
Rental income: 1250
Management company: 100
General maintenance + insurance: 70
Approx value of apartment 230000-240000
Mortgage remaining 235000
Remaining term 278 months
So I'm looking at a tax bill of approx 50% rental income from here on until the mortgage is paid off
The reasons for possibly selling it are, we are living in a property not suitable for our family and would like to build a house. While at the moment we can afford to get a second mortgage I am very wary of being too much in debt should another recession come about, and possibly losing my job
As mentioned, I am unable to weigh up the reasons to keep it since I cannot get a handle on it as an investment, like what is it worth and what is it costing me in relative terms.
I have a number of friends in similar positions and they never entertain selling their properties as they simply state that "it's my pension" but how can one judge that this is a good approach to having a pension? Is it considered good because property values generally rise in value with inflation? But how do you factor in how much you paid for the property in the first place and the money you put into it over the years into assessing that. How do you compare it with the alternative of putting it in a private pension?
Is one way of looking at the situation is that I have someone (i.e. a tenant) helping to pay the mortgage and so I am putting the amount I owe in a tax per year (probably going to be around 6,000 - 7,000) into it so that in the end I might have an asset worth 240,000 plus inflation? How do you determine if that is a good investment?
I know personal circumstances have to be considered when discussing investments but if anyone could offer some general advice on things to consider here, it would be much appreciated