I can’t afford my four rental properties

Posted on

Got a money problem? Email money@rte.ie and we’ll got answers from the experts

Q. We have four rental properties in addition to our family home and are facing increased mortgage payments of up to €2,100 a month because Permanent TSB want to change us from interest only tracker to capital repayments.

One of the properties we bought in County Longford on the advice of our accountant who said, because it as Section 23, we could use it to offset against tax on rental on the other three properties.

At the moment, the rent on this property falls short of the mortgage obligations by €160 a month. If we go to the full repayment then the property will be €460 short.

The other three properties are profitable in interest only but all will become loss-making if we go to full capital repayment.

I understand that Permanent TSB has the right to change the terms of our mortgage from interest only but I am wondering what the best advice would be in terms of negotiations. We can’t afford an extra €2,100 a month. But we don’t want to walk away from the mortgages, just want a reasonable arrangement until I can get a job again.

Nora, County Kildare

Dear Nora,

You have kindly sent us copies of your mortgage contract with the Permanent TSB’s and as you say the “special conditions” in these mortgages allow them to take customers off tracker rates at any point during the life of the mortgage and off interest only.

We spoke to Frank Conway from moneycoach.ie and he thought your proposals to move one or two of the properties onto capital repayment and ask them to stay at interest only on the other two was a good solution.
Permanent TSB have said they will allow customers to stay on tracker rates as long as they move off interest only onto capital repayment.

However Permanent TSB has said those customers who want to stay on interest only will have to move off tracker to the standard variable rate.

“She has put forward a reasonable plan, but what she’s needs to do before going back to Permament TSB is to produce a financial statement outlining all her assets and her debts. This needs to be honest. There is no point in producing a statement that just involves the houses. It needs to include car finance, credit card debts, school fees etc.

“The banks will work with customers but they will try and find holes in the financial statements. They will also want customers to show that they are cutting back. What they absolutely will not stand for is a plan that, say, doesn’t include cutting back on the car or another luxury. You can’t go in and say ‘I won’t pay my mortgage but I’ll continue to keep up my payments on my Mercedes. That’s where the problems arise.

“She also needs to put a proposal together that shows a viable path to recovery – a sale of one of the properties down the line or an increased payment if Nora gets a new job,” said Conway.

Are you in a similar situation? Have you any advice for Nora? Why not comment here?

If you have a question for our money experts, email money@rte.ie

6 Responses to I can’t afford my four rental properties

  1. brennie says:

    Permanent TSB are screwing customers for every penny then can get. I read in the Daily Mail today that they are not going to honour cheques of direct debits if you don't have money in your account.

  2. rtemoney says:

    I have had a similar problem with the Permanent TSB, although I only have one rental property.

    I'm on capital repayment and the mortgage has gone up but the rent has gone down from 800 a month two years ago to 600 a month. This is being paid by two tenants on social welfare so there is little chance of it ever increasing.

    I've approached my branch to see if I could go back to interest only maybe for a year or two until the market picks up and they said no.

    I asked was there someone else I could talk to to and they said they could file a complaint on my behalf.

    I said I wasn't making a complaint I just wanted to negotiate with someone.

    Does anyone know how you can through these thick numbskulls that still work in the local branches and don't understand that we the taxpayers are bailing them out and keeping them in jobs and that they have been asked to do everything they can to stop people being turfed out of their homes.

    I know this is a rental property, but If I can't get the money from the rent to cover the mortgage, it means I've less money to pay my mortgage on my own home so I'll move into arrears on that one.

    Which is to to be TSB?

    Gerry, Dublin 15

  3. Gerry says:

    I have had a similar problem with the Permanent TSB, although I only have one rental property.

    I’m on capital repayment and the mortgage has gone up but the rent has gone down from 800 a month two years ago to 600 a month. This is being paid by two tenants on social welfare so there is little chance of it ever increasing.

    I’ve approached my branch to see if I could go back to interest only maybe for a year or two until the market picks up and they said no.

    I asked was there someone else I could talk to to and they said they could file a complaint on my behalf.

    I said I wasn’t making a complaint I just wanted to negotiate with someone.

    Does anyone know how you can through these thick numbskulls that still work in the local branches and don’t understand that we the taxpayers are bailing them out and keeping them in jobs and that they have been asked to do everything they can to stop people being turfed out of their homes.

    I know this is a rental property, but If I can’t get the money from the rent to cover the mortgage, it means I’ve less money to pay my mortgage on my own home so I’ll move into arrears on that one.

    Which is to to be TSB?

    Gerry, Dublin 15

  4. Chris says:

    I have a similar situation in some ways to that of Gerry in Dublin 15 above. I only have one rental property. Although I’m on interest only repayment. The mortgage has gone up but the rent has gone down from 700 a month two years ago to 500 a month now. I can just about manage the interest only at the moment.

    There is property management of €1,600 p.a which I pay myself. This is crippling me. Permanent TSB are now asking for Capital + Interest repayments. this means that the mortgage will jump from approximately €400 per month to €1200 per month – just like that.

    They said that they will extend the interest only perid if i give up the tracker. the is a very small short term plaster on what will become a gaping wound.

    PTSB are effectively forcing me into arrears like Gerry above. we are paying them and are not in arrears at present put no, thats not good enough for PTSB, they have to put the squeeze on us. well you know what PTSB, so be it, force us all into arrears and see what happens!!

    I have always been up front all my life with my bills etc as most people in Ireland have. the only way to curb these greedy BANKERS is to stop paying your mortgage altogether. the entire country should do this and see what happens.

    They are trying to draw blood from a stone in my case. I just don't have the money, so where do they think I am majically going to pull it from?? they just dont get it!! people don't have it. Maybe some do, but I'd say they are in the minority.

    I have no job now and my back is to the wall. I am not in arrears but I will be now soon, and all because PTSB won't leave me alone to pay what I have been paying all along.

    I really dont know what they want, what they will get is lots and lots of keys, I firmly believe that.

    The threat of a "bad credit rating" is becoming less and less of a workable scare tactic. People dont care anymore!! perhaps the less credit that is available in the future – the better off we will all be.

    "WHERE IS THE FINANCIAL REGULATOR HIDING YET AGAIN?????"

    " PUT THE MEASURES IN PLACE AS USUAL WHEN WE'RE ALL BANKRUPT!!"

    This country is sinking like the Titanic.

    Chris, Galway

    • Common Sense says:

      Guy's,
      If I'm reading this correctly, you are struggling with "Interest only" second home mortgages. How did you ever expect to pay off the capital? Even after paying off all of the interest, (which is usually more expensive than the original mortgage amount), the capital then has to be paid off.

      Not picking on anybody on this forum – but the problem in this country is that everybody thinks they should have at least 2 houses. The banks were wrong to allow rental income to be included in mortgage applications. There is no (and never was) any certainty in the rental markets. Anybody that was buying a house to let should be able to afford the repayments themselves full stop, instead of being blinded by the image of sitting around the restaurant table discussing how many houses they own and how much they have appreciated in value.

      The Irish people need to cut their cloth to measure and remember that we can't all be Richard Branson's.

  5. tom says:

    hi am a customer of ptsb and i struggle with similar problem, i have a house which value is maby 70000 and monthly repayment is 765euro 0f 136000 mortgage left because ptsb has raised rates by 3% after i and rest of tax payers hav bailed them out they are most expensive in countryis there any way we can get them to put rates back by 3 %, any legal action or joint summons? please help

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>