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The problem is there doesnâ€™t seem to be any chance of house prices rising by the time I want to retire.
Should I cut my losses now and sell the house that is being rented? I would only get â‚¬220,000 at most for this house now whereas a few years ago it was â‚¬500,000 +. My main worry is how to pay the mortgage on my own house, with increasing costs and the possibility of more pay cuts.
It would be easier to pay â‚¬70,000 or so than â‚¬130,000. I would hold on to it if there was any hope of house prices increasing in the next few years, but that does not look possible now.
A. Without knowing how much you paid for the houses, it is difficult to give a straight answer. But if you bought the houses in 2007 as you say in your email, it is likely that you had to put a large portion of equity of your own into the houses, given your age.
We spoke to personal debt adviser Frank Conway from moneycoach.ie.
â€śI would say that I would say that quality of life is more important to this person and I would think that if they could find an exit strategy for the rental property, it may be the right option for them as it may give them back the quality of life they seek.
â€śThe property owner is very uncomfortable with where they are now and I also sense that they are very uncomfortable about the the future,â€ť he says.
As Frank says it takes a certain mindset to be a landlord and if you donâ€™t have it worrying about the future, property prices, interest rates, increasing property tax, accounts, is likely to erode your quality of life.
The bank stress tests recently conduced by Blackrock Solutions for the Central Bank had quite a lot of data on house prices and although they did look at the worse case scenario they really donâ€™t see house prices increasing significantly over the next 10 years.
Look at the house price graphs here in the stress test reports â€“ they are on page 60 to see what BlackRock think.