To sell or not to sell ??

coleen

Hi We are the owners of a commercial property in a mid lands town where the town is in decline.
It had been rented out as a shop for the last 5 years.
It has an overhead area that could be turned into a 1 bed apt.
I do not see much chance of re- letting the shop area as the town is flooded with empty shops and rents prices have dropped to a low base.
If we spent 15 k we could turn upstairs into a living space with a return of 600;a month.
It would cost a lot to make down stairs a living space.
We has it valued and estate agent said we would possibly get 110k.
So with tax paid and costs should finish with 90k.
We have no mortgage on our home property or this one and we are coming up to retirement age.
We had hoped that the rent of this property was going to be a nice bonus onto our small pensions.
I am not sure we are ready for all the work that is involved in the building work or the landlord hassles.
But we are slow to let building go for what looks like a small price.
Any advice welcome.
We are also thinking that putting 90k in the bank makes nothing.
We would have the 15k to do the upgrade but then if we did not let downstairs will it just get run down ?

Askthe EA

That is the question

the_syco

coleen wrote: »

If we spent 15 k we could turn upstairs into a living space with a return of 600;a month.

If the place is in such a decline, why would someone rent it? Is there parking? What's the rent for houses nearby that have parking?

the_syco

Did you ask the EA if you did turn the upstairs into a living space, would you get someone to rent the entire unit?

So someone that is running a shop elsewhere in the town doesn't have to pay shop rent + room rent, they instead pay you X for the entire unit, and lives there. If you do go this route, check with your insurance company first, to make sure it's allowed, and that the tenant wouldn't have issues getting insurance themselves.

Wesser

sell it.
enjoy yoir retirement and dont spend it answering the phone to some tenants complaints or trying to kerp up to date with stupid rental laws or dealing with tax.

it would take 12 years at least to get the 90k. at least. why not enjoy the 90k now.
life is not just about money. its about fun!

drunkmonkey

Did you look into the Repair and Leasing Scheme
http://rebuildingireland.ie/repair-and-leasing-scheme/

40k interest free loan to renovate to get it rentable spec, no landlord worries.

I'm currently looking at it but at a very early stage, similar situation I'm just a good bit younger and don't want to sell the property for a short term gain.

voluntary

600 eur montly return on 110k investment is quite a good deal and if you can rent the bottom out for 300 then you'd be talking about 10%
ROI which is excellent. That's the theory. In practice you'll get lower ROI, because you'll likely won't have 365 days rent coverage, you'll have expenses like maintenance, property tax.

This may be worth if you're in a standard income tax brackets when you retire. As soon as you hit the marginal rate you'll get more hassle than potential return.