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Rent out or sell up?

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  • 16-10-2015 4:37pm
    #1
    makeandcreate
    Registered Users Posts: 451 ✭✭


    Own a 3 bed terrace in the Midlands, locally there are only a few houses on Daft and my home. I have found a place that I would like to buy about an hour away that is a house with retail unit, which I plan to open - bank have approved commercial loan with me putting down 20% deposit. Repayments approx 850 pm. Have no other real debt.
    Question is do I look to sell my house or should I rent it out? Average rents for similar seem to be 600 per month.
    Is being a landlord worth the hassle or should I just sell and pay off the new purchase?


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    #2
    L1011
    Registered Users Posts: 68,910 ✭✭✭✭L1011


    Do you own the existing house outright or have a mortgage on it? I assume the former from the mention of no other debt, but if not it changes things heavily.

    Work out if the amount you'll clear after tax is worth your time in managing it - it is possible it won't. You may want to investigate council long-term rental schemes or similar which reduce the management effort though.


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    #3
    newacc2015
    Closed Accounts Posts: 2,379 ✭✭✭newacc2015


    If you break even on the sell, I would sell it. I cant imagine the midlands really having a massive rent or capital increase in the next few years. By then you will have lost your capital gains exemption as it was your principal residence. So whatever you capital appreciation you might get will be cancelled out by the capital gains tax.

    Why a commercial loan? AFAIK the rate is higher than a residential mortgage. Plus I doubt you would get MARP if you fell behind on your repayments.


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