My name is Rob and I've been looking to find a local forum for landlords and other property investors for a while and I believe I finally stumbled upon one. I'm 18 and looking to get into R.E investing and wondered if any of you have any advice for doing so within Ireland?
I've been watching many videos on R.E and gathered as much information as possible from forums like BiggerPockets but a lot of these gurus are based in the States and I'm wondering would basic strategys like "house hacking" and "BRRRR" work here in Ireland almost as well?
Firstly, well done at thinking about investments at 18 - I wish I had that attitude at that age !!
The Irish market is different in 2 major respects in my view - banking arrangements and tenancy rights. These make the kind of strategies you see in other markets difficult to replicate here.
Irish banks insist on high LTV ratios for non-buy to own mortgages. They also charge high interest rates. Finally, most of them don't really do interest only mortgages, and insist on capital repayments. Take BRRRR (Buy, renovate, rent, re-finance, repeat - I hope I got that right). When you need 40% deposit plus cost of acquisition, and you have to make capital repayments on a mortgage with rates over 5%, its hard to make that strategy work, as you wont be able to extract enough equity from your first property to refinance and repeat - especially when you are making capital repayments on a mortgage.
Even if you get past the finance issues, the regulatory environment makes becoming a landlord very risky. If you end up with a rogue tenant, the potential costs are massive. There's lots of horror stories on that side in other posts on this forum.
Overall, Ireland is not an attractive location for a budding RE investor.
Do you have cash to buy without mortgage ? For BTL you are looking at 20% deposit plus all the extras
First time buyer so yea I have enough money for the 10% down payment and yeah I've taken into account closing costs, renovation costs and other things like that.
Thanks for the reply, I'll be taking that into account.
And do you have an income that would make you a candidate for the 90% mortgage?
So your not investing your buying PPR thats differnet. Looks like your all set.
If your just starting out, I would recommend looking at house hacking. It’s better and more financial efficient if you get yourself your own place first and let out some of the rooms in it. At least that way you don’t pay rent, your receiving tax free rent and your paying down equity in your first home.More importantly, you also avoid the mess of the tenancy regulation and have much more control. After you get your own ppr down to a reasonable level then you can start saving for the next one. The first 1 or 2 are always the longest,most time consuming and slowest to get off your feet but once you get going, it’s basically rinse and repeat. There will be bumps along the way and it’s a long game mentality so don’t expect to get rich in the next 20years from it. You will probably be in your 50’s before you really reap the rewards for it but then you should have a nice cushion while others will still be doing their day job with no side hustle.
Exactly man. On top of increasing the equity by having my tenants pay down my mortgage, I'm also going to renovate it and generate more 'sweat equity' while generating cash flow and yeah my plan is to rinse and repeat and slowly work my way up to apartment complexes. Also just out of curiosity, are you an experienced investor yourself and if so, how long have you been investing for? @Fol20
By PPR I'm assuming you mean Principle Place of Residence? And yea, the idea of "house hacking" pretty much means I buy a multi-family property (in this case a duplex) I then rent out 1 unit of the duplex and have the other unit to myself while my tenant pays down my mortgage and other side expenses while I essentially live for free while also generating cash flow.
PPR is principle private residence. PPRs are exempt from CGT. A duplex is one unit otherwise it won’t qualify for rent a room relief and will be subject to CGT on the portion not your PPR. As a 19 yr won’t having a family in your own home not kill the vibe..imaging bringing a girl home to your pad only to meet “your family” that’s not your family. And will a family want to live with a 19 yr old. And what happpends when the tenant ( by the way if you qualify for rent a room relief they are not your tenant) stops paying rent and refuses to leave, wrecks your gone and takes two years through rtb and courts with solicitor and barrister costs to get out.
I would seriously suggest that you get employment in the field for a few years to learn the way the market operates before considering investing!
Careful with renovations. They may help for the type of clientele you appeal to but in terms of equity increase. It may not add that much. Maybe if you spend 10k on it it might add max of 5k. Yes I am an experienced invester