To Sell Or Not To Sell

smellybiker

Okay so here's my predicament!!

I own a three bedroom house in kilkenny. i made the decision a few months ago that i wanted to go travel so at present, i've got a family living there paying rent which more than covers the mortgage!

I've got a lease in place and so far, so good, they're treating the place well and i've had no problem with them. i've booked a place with usit to travel to canada for a year on December 27. my dad is gona look after the place while i'm gone - so what's the problem??

well, i'm sick of kilkenny and really would love to head off as soon as possible - earlier than december! the way i'm feeling now, i don't think i'd come back coz i'm that sold on travelling round the world till i find exactly what i'm looking for in life.

I may end up coming back here but i may end up never coming back to live!!! so, with the way that i'm feeling, the obvious thing to do is sell and use the money that's left for my travels. at first, i hated the idea of selling - as it would be something i would have when i come back! however, the location of the house is not suitable for me and if i were staying here, i would most definitely be selling it and moving to a better location!!

with the present housing market the way it is, am i stupid to sell?? should i keep it?? i paid 178,000 for it - and now it would go on the market for at least 240,000 so i'm not at all in negative equity - - - any advice???

rockbeer

The question is, would you have enough left after the mortgage is paid off to do what you want?

It's also worthe bearing in mind that there's little value in selling your primary asset just to fritter away the proceeds. Better to keep it and use the surplus rental income to live off. Or sell it and use the proceeds to buy a better investment somewhere else.

Stephen

What part of Kilkenny is the house in?

smellybiker

Stephen wrote: »

What part of Kilkenny is the house in?

Lintown Hall

beeno67

smellybiker wrote: »

Okay so here's my predicament!!

I own a three bedroom house in kilkenny. i made the decision a few months ago that i wanted to go travel so at present, i've got a family living there paying rent which more than covers the mortgage!

I've got a lease in place and so far, so good, they're treating the place well and i've had no problem with them. i've booked a place with usit to travel to canada for a year on December 27. my dad is gona look after the place while i'm gone - so what's the problem??

well, i'm sick of kilkenny and really would love to head off as soon as possible - earlier than december! the way i'm feeling now, i don't think i'd come back coz i'm that sold on travelling round the world till i find exactly what i'm looking for in life.

I may end up coming back here but i may end up never coming back to live!!! so, with the way that i'm feeling, the obvious thing to do is sell and use the money that's left for my travels. at first, i hated the idea of selling - as it would be something i would have when i come back! however, the location of the house is not suitable for me and if i were staying here, i would most definitely be selling it and moving to a better location!!

with the present housing market the way it is, am i stupid to sell?? should i keep it?? i paid 178,000 for it - and now it would go on the market for at least 240,000 so i'm not at all in negative equity - - - any advice???

Sell it (if you can) and enjoy your life. €60,000 gives you a great chance to do something wonderful with your life. Grab the chance and go for it.

smellybiker

if i be realistic about the current state of the housing market and the actual amount that i would get for the house, this is how i break it down:::

Sell at: 220000
Mortgage: 168,000 (probably will bump up to 190000 for penalties for paying off earlier than 45 years)
Auctioneers and Solicitor Fees: 10000 (this might be excessive but putting the upper amount is better than undercutting the cost)

Leaves: 20000

I owe the credit union 16000 so that leaves 4000. it's not alot but at the mo, i'm working two jobs to pay the credit union and save for canada. at least if i sell the house, i'll have no debts and can still work two jobs but the money will be put towards travelling rather than the credit union.

at the moment, every penny i have goes to the credit union and i don't seem to be making a dint in at all - am i mad to sell or what???

SimpleSam06

smellybiker wrote: »

am i mad to sell or what???

Four grand isn't even small change if you want to travel the world. If you are intent on being debt free, go for it, but really, you have a significant asset in that house, especially if its paying for itself. Your best bet is to pay off that 16k asap, you should be able to do it handily by the end of the year if you have two jobs, even if they are paying only minimum wage. Then you'll have 20k if you want to sell up, and a semi permanent income if you want to keep it (after the house is paid off).

Seriously, worst case scenario if you just leave the house sit, you'll have a very large lump sum after ten years if you sell then. Ten years may seem like forever, but it is not. Really.

Victor

The grass is always greener, etc. When you come back, you just might want the house.

"probably will bump up to 190000 for penalties for paying off earlier than 45 years" - do you have a fixed rate 45 year mortgage? If not, paying off early probably won't cost anything.

starky

Your definitely right to head away for a while see what else is out there. You may find that Ireland is not so bad after all and want to come back, as many people do.
Don’t forget once you sell you will have to pay stamp duty on your next purchase. If you think paying off the credit union is bad now, imagine working for 18 months just to save up enough to pay the tax on your next place!!! Never mind the actual 8/10% deposit.

Personally I think you would be better off holding on to it if you can, leave it set out go off and enjoy your self and at least you will have something to come back to one day. If you decide to live else where you can always sell it down the road. Until you are 100% sure you don’t want to live the rest of your life here then you should probably hold on to it. I don’t think you should make a decision to sell such a long term asset to help you achieve short term goals, it just des not make financial sense.

I am sure you will make the correct decision for your self what ever it is!

Tom123

smellybiker wrote: »

if i be realistic about the current state of the housing market and the actual amount that i would get for the house, this is how i break it down:::

Sell at: 220000
Mortgage: 168,000 (probably will bump up to 190000 for penalties for paying off earlier than 45 years)
Auctioneers and Solicitor Fees: 10000 (this might be excessive but putting the upper amount is better than undercutting the cost)

Leaves: 20000

I owe the credit union 16000 so that leaves 4000. it's not alot but at the mo, i'm working two jobs to pay the credit union and save for canada. at least if i sell the house, i'll have no debts and can still work two jobs but the money will be put towards travelling rather than the credit union.

at the moment, every penny i have goes to the credit union and i don't seem to be making a dint in at all - am i mad to sell or what???

I think you may find it difficult to get a quick sale @ €220k
I see three, 3 bed houses priced at €235k and one asking €220k in the area.
Link

Based on these asking prices anything just above €200k would be a decent offer in the current market.

I'm not trying to put you off selling I just think you need to be very realistic about what you will get in the current market.

Tom123

smellybiker wrote: »

Mortgage: 168,000 (probably will bump up to 190000 for penalties for paying off earlier than 45 years)

Can I ask what bank gave you a 45 year mortgage? Never heard of one before

Stef1979

I'd recommend keeping the house as at least you're on the property ladder...things may change in property prices in thenext year and you could loose out by selling now...some really good points made above in favour of not selling...:)

smellybiker

Tom123 wrote: »

Can I ask what bank gave you a 45 year mortgage? Never heard of one before

I got my mortgage with First Active - at the time, they were the best mortgage providers - not sure if that's the same. i got myself a mortgage adviser - and they did all the negotiation and work for me. i had my payment fixed for the first year and then he was able to negotiate another three years fixed after the first year. it's great coz i'm not one of those homeowners who worries every time the interest rates rise!!

some good points have been put forward for keeping the house - so much so that i'm thinking that's the right thing to do... however does anyone have any arguments for selling up and heading off???

WhatsGoingOn

You have now lost your FTB status, so if you sell up now and want to buy another house in a few years time, you will have to save for a deposit of 25k or so and stamp duty of 20k, so how long would it take you to save 45k?? I think you should keep it.

smellybiker

WhatsGoingOn wrote: »

You have now lost your FTB status, so if you sell up now and want to buy another house in a few years time, you will have to save for a deposit of 25k or so and stamp duty of 20k, so how long would it take you to save 45k?? I think you should keep it.

does anyone know what's the case if you have lost your FTB status (like i would if i sold now) but were buying a house together with someone who is a first time buyer??

beeno67

WhatsGoingOn wrote: »

You have now lost your FTB status, so if you sell up now and want to buy another house in a few years time, you will have to save for a deposit of 25k or so and stamp duty of 20k, so how long would it take you to save 45k?? I think you should keep it.

If you sell now and if you buy agaijn in the future you will have to apy stamp duty of 7k not 20k. Not really a major amount. If you are sure you want a house in future then after selling put 20k in a savings account and leave it there to buy in the future.
You have a mortgage of 168k so at 5% interest that means it is costing you 9000 per year in interest so unless you are getting 9000 a year in rent then you will have to make up difference. Add to this about 2000 per year upkeep costs. Also add your interest payments on 16000 credit union loan and interest on new loan you will have to take out then you will see you would be mad to keep house unless you believe there is going to be a major rise in house prices.
You are too cautious with your figures. If you sell for 220,000 auctioneer fees will be about 3000 and solicitor fees at most 2000, giving a total of 5000 not 10000. There is no way you will be paying bank charges of 22000 either. You will probably have no charges at all to pay. So if you sell for 220k you should clear 46,000 at least. Pay off your credit union and you still ahve 30k. Quite frankly only an idiot would keep property if you want to go travelling

smellybiker

beeno67 wrote: »

If you sell now and if you buy agaijn in the future you will have to apy stamp duty of 7k not 20k. Not really a major amount. If you are sure you want a house in future then after selling put 20k in a savings account and leave it there to buy in the future.
You have a mortgage of 168k so at 5% interest that means it is costing you 9000 per year in interest so unless you are getting 9000 a year in rent then you will have to make up difference. Add to this about 2000 per year upkeep costs. Also add your interest payments on 16000 credit union loan and interest on new loan you will have to take out then you will see you would be mad to keep house unless you believe there is going to be a major rise in house prices.
You are too cautious with your figures. If you sell for 220,000 auctioneer fees will be about 3000 and solicitor fees at most 2000, giving a total of 5000 not 10000. There is no way you will be paying bank charges of 22000 either. You will probably have no charges at all to pay. So if you sell for 220k you should clear 46,000 at least. Pay off your credit union and you still ahve 30k. Quite frankly only an idiot would keep property if you want to go travelling

wow that puts a completely different spin on the thinking and figures i had! to have 30k after paying everyone involved in the selling process - that's fantastic coz i'd probably keep alot of that dosh here earning interest - it would be something to have if i came back or something to use if i continue to travel!!

thanks for your figures on the whole process - i also forgot to mention that i'm leasing to a couple who are entitled to rent allowance. this means the local council have me registered as a landlord and it also means that i now have to register the rent i get for tax!! just something else that needs to be considered in the whole - should i or shouldn't i sell!!

has anyone done this?? i mean has anyone sold property before to follow another dream??

iguana

I'd suggest you contact your bank and check if you have to pay a penalty charge to close early. Then talk to a number of EAs about what you will get for the house and what their charges will be. You can't really make a decision until you have the facts rather than your estimates. Imo, you'd be better off selling, just be careful about which bank you chose to put your lump sum in while traveling.

smellybiker

okay everyone has brought up really good points for both selling and keeping the house. thanks for all your input - i'll take it from here - do a bit of research and see what i can find out!!!

cheers to all
smelly

davidoco

smellybiker wrote: »

....... it's great coz i'm not one of those homeowners who worries every time the interest rates rise!!

Yeah, no worries, but your paying a higher rate than those on variable rates for the peace of mind.

smellybiker

davidoco wrote: »

Yeah, no worries, but your paying a higher rate than those on variable rates for the peace of mind.

yeah and the cost of that piece of mind also has to be taken into account when i make a decision - thanks david