How to make the leap from two houses to one home - How to blend your property portfolios
You meet, you fall in love, you move in together. Life is good. But what you decide to do with your properties (assuming that you have any, of course) could decide whether it's happily ever after. Vicki Notaro talks to the experts about how to blend your property portfolios
Published 28/02/2016 | 02:30
Merging lives when you get married is one thing - but what about merging property portfolios? Now that we get married later in life than ever before - more than a decade later than couples who married in the 1970s - it stands to reason that by the time we say "I do" many of us have our own mortgage and have accumulated furniture and the collection of knick-knacks that make a house a home. Yet while we might be happy to blend our lifestyles, families and even our pets, it's not as simple as one might think to blend our properties.
Indeed, when you fall in love and decide to move in together, what do you do with your pre-existing homes and belongings? How do you decide where to live, whether to sell or rent out one home and how to tactfully dismiss the awful green armchair your other half adores?
It's fair to say that when it comes to merging lives and homes, it can be contentious, both financially and emotionally. Should you both sell off your individual homes and start afresh together or stick with an existing property that can be adapted to suit your new life? And is it better to sell one of the houses, or put it on the rental market?
And how do you make these decisions without tearing your hair out - or tearing strips off each other?
Couples counsellor Tony Moore of Relationships Ireland is very matter of fact. In his experience, if you're both in a position to sell up and start over again, this is the least contentious thing to do.
"The best approach is to sell both properties and buy a joint one together. This advice is based on my experience of these type of issues being brought to Relationships Ireland," he explains.
"If your partner moves into your house, they may say it doesn't feel like their home. Also, it's important to note that unfortunately sometimes relationships fail and dividing property that wasn't purchased together can be fraught with difficulty."
With regards to merging belongings, Tony says it's difficult to do so without causing resentment.
"If you move into your other half's house or apartment, he or she will already have a place for their own items that will now have to be moved and that requires negotiating. It will be done, but I can assure you there will be some resentment.
"If we have lived on our own for a few years and are used to choosing what we like for ourselves, it can be very difficult to accommodate another's tastes. The resentments come around because we feel we are always 'giving in'.
"One half gets used to the other 'giving in' for a peaceful life but like a boomerang it can come back and hit you sooner or later."
However, there are many couples who would rather not enter into the housing market to such a degree at the moment and may own a property or two between them that would make the perfect roost - if they can agree on which home, that is. We all like to think we'd make such decisions with our head, rather than our heart, but it's often easier said than done.
"Economics and emotions are not good bedfellows," says Tony. "Many of us don't make judgments for sound economic reasons, so while we shouldn't bring emotions in to it we often do. My advice is that both parties need to listen carefully to one another about the emotional impact of renting or selling a property.
"This will help the inevitable 'blame game' when it arrives. A couple need to be able to compromise, which isn't easy."
Still, the economics of the situation can't be ignored. One property might be a far better rental prospect, while another might devalue over time. But finance expert Sinead Ryan says that the mortgage situation with both properties is the first thing to consider.
"If both are highly geared [borrowed against], than it may be a risky prospect if you expect both to pay long term. For too long, Irish people saw property as their 'pension', only to have its value wiped out as they neared retirement.
"In my opinion, it's best to judge each property on its own merits and live in the one that you like the best. This is your home, not an economic unit," she advises.
With regards to the remaining property, Sinead says you really need to assess the pros and cons; should you rent it out or sell up and use whatever equity you get against your principal private residence debt?
"Being a landlord is a messy business, especially for amateurs, and the associated costs can be onerous, like insurance and property tax.
"Make absolutely sure you could manage if you didn't have a tenant for, say, four months. If you can't pay the mortgage on it, perhaps it's not the business for you and when you sell it, you will have Capital Gains Tax to pay also, it's currently 33pc."
Being a landlord means incurring other costs; water charges, a higher interest rate on the mortgage because banks charge more for investments properties, agents and cleaning fees, maintenance and repairs.
"Income tax is payable on rent, so it's vital you run all the numbers before starting out. If it can't 'wash its face', to use the parlance, re-consider."
Sinead says it can make sense to sell up and buy together.
"If you both have one-bedroom apartments, for example, then living in one when you're together or perhaps starting a family, makes no sense long term.
"The main factor is indebtedness. If they both have hefty mortgages, work out what's left over when they are sold - is that enough as a deposit on the family home you would like?
"The main focus should be on the proposed family home, not the investment. Sort that, then you can make decisions on the other."
Case study: And baby makes three ...
Lorcan Carpenter, 39, and his wife Belinda, 36, pictured left, married in 2013 but both already owned properties themselves. He works in recruitment in Dublin, while she runs a glamping business in Co Carlow.
"When we met in 2010, I was living in Stoneybatter, Dublin 7, in a house I'd purchased several years previously and Belinda was living in her own home in Kilcullen, Co Kildare, in a three-bedroom house.
"It worked out well that way when we were first together and even newly married because we both have a great love of the country.
"We were in the city during the week and in the country on weekends and had the best of both worlds."
After the couple had wed, Belinda started her glamping business on an old farm between Tullow, Co Carlow and Shillelagh, Co Wicklow (theoldforgeglamping.ie).
They decided to rent out the cottage in Stoneybatter, a modified two-bedroom, and live in Kilcullen. Lorcan would commute to Dublin when required. What has really made the decision for them to stay in Kilcullen now, though, is that they had a baby daughter, Anna, last December.
Lorcan explained: "I can no longer have a pied-a-terre in Dublin as I need to be there every evening now to help with the baby, so I will need to finally buy a car and become a proper commuter.
"For us, it was the practicality of parenthood that cemented our decision and life is great in satellite towns.
"The bus from Kilcullen takes as long as the bus from Rathfarnham. In the long term, if it is possible to keep the second home in Stoneybatter, it should make sense for us financially.
"But I wouldn't like to move back to Dublin at this stage, my heart is set down the country."