Second house - sell or rent in the current circumstances

atwal

I am living in my own house but it's getting old, 15 years now. A mortgage is not fully paid, with about 110 k left. Thinking of buying a brand new house or house 1 to 2 years old in Dublin or outskirt areas as I can see I have to spend a few bucks every year on fixing the issue in the house that seems to occur more nowadays. Confused if I should sell the existing house or rent it out. As far I see the rents are very high, so I believe it may cover both the mortgages. I am not sure about the tax implications. I want to keep the property so that in future with inflation, I may get more if I plan to sell but yeah I need to see if I can manage the funds for the new property. If I sell, the fund for the new property will be available and will be much lesser mortgage obligations, but then I won't be left with an additional solid asset.

Do you think that keeping a 15-year-old property and renting it, is a good idea? Can one clarify any information which I am not aware of if I am thinking of renting? Can renting be really profitable?

Who can I consult with exactly or can help me with this?

macrubicon

If you rent it you will have to pay the PRTB fees and put savings into a continency fund (for repairs, post letting redecorating and also for a fund for the months in between lettings). But the major one is the tax. If you are working your going to be assessed for all the rent as income (less any allowable deductions - they are not that big) and you will pay tax, USC and the likes on it.... Safely assume you will lose half of it to tax and then work out the other expenses you need to budget for.

mitresize5

there are big tax and maintenance considersations.

Im in the same boat. Renting out old family home

Rent €1,500 pm

Mortgage €800 pm ... so 700e 'profit' ... so quids in you'd think

Once all deducitons are put aside, tax, fund for maintenance, insurance, accoutant etc ... it works out at about €250 a month net.

Thats 3K per annum. You're one bad tenant away from a serious financial shock.

As a long term investment we have decided its worth the hassle ... but its not for everyone

bakerbhoy

if you sell now , you keep all excess over mortgage balance as its your principal residence.

If you rent say for 15 years you will be liable for capital gains on 50% excess over purchase price minus mortgage balance abd a few other allowable deductions.