Sell or hold onto it

Hello Pinsters,

I’m looking for a bit of a critique please.
Some years back I foolishly bought a house in the suburbs of Dublin. Not a bad little place - but I realised soon after that I wasn’t ready to be living in the suburbs.
I rented out that house and have had it rented out since. It has generally paid for itself - I have had to subsidise it a little when interest rates were at their highest over the last few years. But, all in all, it has been a hassle free experience.

I’ve invested quite a lot of money into improving the place (which keeps the tenants happy) and am very careful with my choice of tenants so have had no bad experiences as yet.

With the bubble bursting, the value of my house had fallen quite considerably from it’s peak. I don’t think I am in negative equity - although probably not too far off it.

On the other hand, I have started to see houses in areas of Dublin that I would like to buy and live in (for the foreseeabe future) start to come within reach (although I’m in no immediate rush to buy)

So, I’m in a bit of a quandry about what to do with the house I currently own. Sell or hold onto it.

If I sell I might come out of it with a few quid (I’d estimate 10k - 20k but who really knows) and I would be a lot more comfortable about buying somewhere else in the future knowing that I didn’t already have a mortgage. However, I would still lose out on most of the deposit I’ve put into it plus the money I’ve invested into it (plus I have also lost my FTB status by buying this place)

Therefore, I’m leaning more towards holding onto it - mainly because I would like to make a bit of money off it eventually. I have become an accidental investor and would like my investment to pay off (in the long term). I am hoping this would be achieved by my mortgage slowly being paid and house prices eventually rising. I realise I am in for a long wait…

Am I being unrealistic? Given that I will probably never want to live there, am I better off selling now and taking the hit?

Thoughts?

Do you see any prospect of the prices stablising or will they continue to fall? And what if interest rates rise? How much will your repayments increase? Can rents increase? Will the house require renovation? If you slip into negative equity will it affect your prospects of getting another mortgage? Lots of questions to consider…

I know it’s difficult when you see that prices have come down so far, but I’d be inclined to sell. Get more advice.

Well the market in the area seems fairly stagnant at the moment not falling but not rising. I’d say will be like that for a long time. My repayments have decreased by about €400 from their max with the decrease in interest rates - so I guess a similiar increase can be expected as rates rise…not sure what the time scale on this will be.

Looking at rents in the area I will probably have to drop the rent a bit when the current lease is up in the summer.

I’ve put a lot of money into renovating the house already and have “fixed” any major issues - so it shouldn’t require anything major for a while.

Hmmm maybe I’ll just go and live there after all. It’s not like it’s a horrific commute or anything like that - I’m just quite used to living close to the city…

Are they selling or is it stalemate?

Sell.
Interest rates are at bottom of cycle.
There is huge over-supply of starter homes in suburbs. Unless your suburb is Sandycove.
The potential upside in prices for the foreseeable is almost nothing.
The potential downside is disastrous.
While the country is still in denial about the property market you should sell.

Question: Will you pay me 50 euros for this advice?

If the answer is no then why did you spend more money than you will ever save on a house in a location you never wanted to live in?

Lesson to us all. There’s no rush to buy. If you really think you are in love with a place then rent nearby first.

Sell, while you still can, agree totally with Bertie above.
Prop after prop has been inserted under this dead cat
property market, the latest one being Liam Carroll’s
judge telling his liquidator not to sell any properties
until the market recovers, another opportunity lost to
allow the required correction, which is inevitable.Sell.

If you have had to subsidise the rent in a time of historic lows then you are going to struggle very soon. I doubt this place has been “paying for itself” at all.
Sell now.