Darren's Property Portfolio Diary

Darren197001

Long time lurker here. Just never put in the effort to register.

There seems to be a lot of guessing going on on both sides here, so I was going to post a log kind of thing when I get enough posts to open a thread.

I was into investment property from 1997 to 2005.

Over the last year I have started building a new portfolio again and keep monthly records for each property.

I'll just post up the updates for each month for a typical one as I update my own records.
It will help people see what goes into running it and what the real costs and benefits are for a real example.

I won't go into the reasons I think things are picking up as they are my own analysis and are no more valid than anyone else's here for or against. They are just my opinion based on my own experiences over time. Either I am right or I am wrong, but I think i am right obviously.

I'll start the thread when I get some more posts up.

Monty Burnz

Darren197001 wrote: »

I was into investment property from 1997 to 2005.

Commercial property or residential? Apartments or houses?

Why did you start in '97 and exit in '05?

am i bovvered

Darren197001 wrote: »

Long time lurker here. Just never put in the effort to register.

There seems to be a lot of guessing going on on both sides here, so I was going to post a log kind of thing when I get enough posts to open a thread.

I was into investment property from 1997 to 2005.

Over the last year I have started building a new portfolio again and keep monthly records for each property.

I'll just post up the updates for each month for a typical one as I update my own records.
It will help people see what goes into running it and what the real costs and benefits are for a real example.

I won't go into the reasons I think things are picking up as they are my own analysis and are no more valid than anyone else's here for or against. They are just my opinion based on my own experiences over time. Either I am right or I am wrong, but I think i am right obviously.

I'll start the thread when I get some more posts up.

The best of luck to you .... a difficult task on this forum trying to have a factual-level debate. I have tried twice in the past. Too many posters interested in point scoring and victrionics on both sides of the fence.

lawnmower_man

Darren197001 wrote: »

Long time lurker here. Just never put in the effort to register.

There seems to be a lot of guessing going on on both sides here, so I was going to post a log kind of thing when I get enough posts to open a thread.

I was into investment property from 1997 to 2005.

Over the last year I have started building a new portfolio again and keep monthly records for each property.

I'll just post up the updates for each month for a typical one as I update my own records.
It will help people see what goes into running it and what the real costs and benefits are for a real example.

I won't go into the reasons I think things are picking up as they are my own analysis and are no more valid than anyone else's here for or against. They are just my opinion based on my own experiences over time. Either I am right or I am wrong, but I think i am right obviously.

I'll start the thread when I get some more posts up.

which locations are you invested in , broadly speaking ?

Darren197001

Started in 97 when we moved in together. We had a house each and we rented one instead of selling it just in case. Also having studied economics at university I thought I was a genius economist at that stage. Turns out economics isnt as simple as that after all

So then we built up a portfolio adding an apartment or house every year until 2004, with my brother and his wife as equal partners. No commercials.

In 2005 they separated so we decided to sell everything. We figured we had ridden the wave as far as it could be ridden at that stage anyway. My opinion at the time was that there was one last surge in house prices to come with the maturity of SSIAs. €40,000 per couple with nothing else to do with it than invest in property. I figured that would lift prices ovr the tipping point and they would fall after that.
I wont pretend i knew anything about a world crash or banking crisis, or how bad it would eventually get. I was partially right, but also very lucky the way things turned out. And got very very lucky with the capital appreciation.

During that time 1997 to 2005 I learned the letting business very well, so have tweaked my strategy for this time.

1 : 1 bed apartments are the way to go for yield.

2 : Dublin is the only place where its happening for several years yet. I wouldnt even take a property for nothing in some counties.

3 : 1 bed properties in nice areas where they can be bought cheap enough and rented for a good price are what i'm going for. Swords would be an example, and where the property I will be posting about is based.

4 : Capital appreciation and taxes are something you cannot control, so leave it out of your evaluations as much as you can. Yield is the important factor. Always go for the best yield you can get.

5 : Do not go into property without being diversified otherwise also.

6 : If the yield is not performing, put the property up for sale right away.

7 : No rent allowance under any circumstances. Experience has thought me this.

8 : I have an agent who I used before will look after the properties for 8%. I dont need to do anything. In practice though they come to me with a price for a repair and I either get my own guy or tell them to go ahead. They used to charge 12% for the same service before.

9 : Get a loan, even if you dont need it for the property. You can always pay it off if it becomes the better option.

Thats just to answer a couple of questions. I am deliberately being a bit vague because I want this log to be about the facts and figures, not about what I think will happen vs what someone else would do.
I'll post my figures, everyone else can argue with each other if they want.

I'll be posting something like this (Maybe in a bit more detail) -

January (these ones are just made up numbers and comments. I'll get the real ones from my notes)
Rent received €750.
Mortgage interest paid €100.
Repairs €0
Building Management charge for Jan : €50
Agents fee : €100
Property Taxes : €0

Profit : €500

Issues : Tenant gave notice to move out on 1st March. Agent notified to have another tenant for that date.

Something along those lines. I want to hit a sweet spot between giving enough info to show the facts and giving too much personal or unneeded info.
Its just an idea for now. Some might find it useful or not. I was just asked by a friend to do it on boards, so I said OK.

EDIT : I forgot to add.
Where I am now. Bought 3 1-bed apartments in Dublin since Jan. All rented and performing more or less the same as each other. I'll only be posting a log for one of them, because I dont want to have to put too much work into this. Partners with my brother on this again. Plan to buy another one each year until we decide enough is enough or that the ship has sailed. Yields are excellent right now, and if they go below 6% then we stop.

Duggys Housemate

Darren197001 wrote: »

EDIT : I forgot to add.
Where I am now. Bought 3 1-bed apartments in Dublin since Jan. All rented and performing more or less the same as each other. I'll only be posting a log for one of them, because I dont want to have to put too much work into this. Partners with my brother on this again. Plan to buy another one each year until we decide enough is enough or that the ship has sailed. Yields are excellent right now, and if they go below 6% then we stop.

You interest is low, so is that a interest only loan?

EDIT: sorry the figures were fake, will ask more later.

Darren197001

I'l be posting up this kind of stuff.
I copied it from my google docs account so it might not be formatted properly. I'll proof read it later, but have to go out for now.

Short explanation first and then to the numbers.

Swords
1 Bed - 52 Sq M (Large 1 bed - Would not buy smaller than 45 Sq Meters for 1 Bed anyway)

1 Bed advantages. Higher rent per unit. Lower fees. Lower maintenance (Less painting, less bathrooms, less doors, heaters, beds, wardrobes, windows etc). Easier to let.

Sale agreed Nov 2011 and bought Jan 2012 for €95,000 (incl Costs (which which are not very high these days))

Monthly rent €775
Tenants were already present and very happy. They could move to a much smaller place for slightly less money at this time, but i dont think they will.

Furniture is all good, normal for rental stuff, but if you had to stock up an empty 1 bed apartment from scratch i costs about €1000. I would prefer if we had the unfurnished model in Ireland, but we dont. Until most people want to rent unfurnished there is no point trying to let unfurnished as you will lose out on most of the market.

If you had to wait on a tenant after buying, that could be a factor but tbh, if it takes you time to find a tenant to move in, you have bought in the wrong area. I always aim for zero vacant periods, unless its Christmas week. Agent should be able to roll people in and out, or you have the wrong agent. Already had the agent tested on this a couple of months ago with another apartment and he had someone in the same day, so he passed.

I expect this one to give an annual yield of close enough to 10% for the foreseeable future.

Took a mortgage of 70000 for 30 years at 4%
My 70000 is in an account earning more than that (dirt is a factor though).
It can be transferred at any stage if the advantage is no longer in having it set up that way. I always get a term as long as possible, but it doesnt really matter as I doubt this mortgage will be lasting the full term anyway.
Its for tax purposes.
Interest is about €230 a month at the moment.
Remember my 70k is earning me interest minus dirt.
Of the 70k borrowed, only 25% of it is costing me interest. So this should make me better off.

Property taxes i'll also calculate at the end of the year (Currently €300 estimated)

Also remember I will have to pay tax on any profit too, but no point giving you my tax situation. Everyones will be different.

I'll fix all those rough figures at year end when statements and taxes are done, but the figure I give should be within a few %.



Jan 2012
Rent : 775
Interest : 230
Complex Management fee : 50 (€600 per year)
Repairs €0
Agents fee : €62


Profit : €433

Notes : Tenant asked for rent reduction of €75 per month. Current price is good for this property, so instructed agent to tell tenant they can give their notice if they feel they have to. To refuse reduction and ask them next month if they are staying.


Feb 2012
Rent : 775
Interest : 230
Complex Management fee : 50 (€600 per year)
Repairs €0
Agents fee : €62


Profit : €433

Notes : Agent Asked tenant if they had decided to stay on and they are staying.


Mar 2012
Rent : 775
Interest : 230
Complex Management fee : 50 (€600 per year)
Repairs €0
Agents fee : €62


Profit : €433

Notes :


Apr 2012
Rent : 775
Interest : 230
Complex Management fee : 50 (€600 per year)
Repairs €0
Agents fee : €62


Profit : €433

Notes :


May 2012
Rent : 775
Interest : 230
Complex Management fee : 50 (€600 per year)
Repairs €0
Agents fee : €62


Profit : €433

Notes :


Jun 2012
Rent : 775
Interest : 230
Complex Management fee : 50 (€600 per year)
Repairs €0
Agents fee : €62


Profit : €433

Notes : Formed an opinion of tenants. I think they are good tenants and am happy with them. They are not chancers and are very reasonable and listen to reason also. Also agent is doing very good job. Rarely has to contact me on this one.

daltonmd

Darren197001 wrote: »

Hi Darren, great information, I've asked the mod to split the thread as It deserves a thread of it's own.

Can I also ask about the tax implications on the profit? If you don't mind?

Thanks

Darren197001

daltonmd wrote: »

Hi Darren, great information, I've asked the mod to split the thread as It deserves a thread of it's own.

Can I also ask about the tax implications on the profit? If you don't mind?

Thanks

Well my tax will be different to everyone elses.
Im getting help from an accountant friend to structure expenses etc so that I can get the max tax relief from them.
There are no fit out costs yet with this apartment as all the furniture etc is already there, but the accountant says he can put a sum in for it and get deductions. THe form is quite simple to fill in yourself, but I just need him to explain a couple of things peculiar to this situation to me. I'll take care of it at year end, but for now assume there is no deduction available.

And the way the mortgage is structured I will get get tax relief on the interest. There is a trade off here between how much I leave on deposit and how much I leave outstanding on the mortgage, because there is Dirt to be taken off the deposit interest and I will get 75% of the interest to knock off the rental profit.
If there are tax changes to stop me doing this, then it could be enough to get me out of property investment altogether.

Really I'm trying to beat (by a long way) what I would get with money just being on deposit in the bank.

Roughly it should look something like this for a month, but rolled up over a year.


Rent received - 775

Expenses.

Interest 75% of 230 = 172
Complex Management fee : 50
Agents fee : €62

Repairs = 0 (These should average out to about €100 PM from past experience, but they come in lumps)
Capital costs = 0 (If there were any it would be 12.5% of them)


So 775 - 172 - 50 - 62 = €492 that I will have to pay tax on.


Hopefully I'll get that down some more, but I have to pay NPPR and other property tax. And the PRTB fee of course which you cant deduct (though nobody understands why as it is an expense and in the end it will just get passed on regardless in the rent when rents pick up, though it cant be done yet).

Then the taxes from all the properties are rolled into one to offset against each other. You can see how it gets complicated and that my tax situation is completely different to anyone else. Thats why you cant wrap it up until you do your accounts, which will be done for October 2013 for this year.

What I want is the least amount of work for the maximum gain. I am already diversified and am only going into property again becasue the yield is very good.

Outsourcing everything. Aiming for an average of 4 hours work a month at this stage, shared with my brother Though this one is in my name. Its easier to buy two or four and have half owned by each of us than the red tape involved in being joint owners on the two or four.
The work for us should now be mostly just phone calls.

We are expecting to bank a nice sum per year from this property for our outlay of about €25,000, with hardly any work to do ourselves. But profits will be left in a "Property account" to cover repairs and expenses as they come up, until that property is sold. Then we can either divvy up the profit or pony up our losses.

I didnt really want to get into this much detail as you can see how it gets very complicated when individually tailored. It really is different for everyone, and I might be missing a few things off the top of my head. But since I havent really started the log yet, what harm.

gurramok

Darren197001 wrote: »

Started in 97 when we moved in together. We had a house each and we rented one instead of selling it just in case. Also having studied economics at university I thought I was a genius economist at that stage. Turns out economics isnt as simple as that after all

So then we built up a portfolio adding an apartment or house every year until 2004, with my brother and his wife as equal partners. No commercials.

In 2005 they separated so we decided to sell everything. We figured we had ridden the wave as far as it could be ridden at that stage anyway.

Darren, how did you(or as a couple) afford buying apartments every year till 2005, banks trigger happy in lending?

And how have ye afforded to buy since then, cash buyers or mortgages with big deposits to satisfy bank lending rules?

housetypeb

Darren
you don't seem to be allowing for
NPPR 200/year = 16 euro /month
Household charge,100/year === 8euro/month
Insurance 300/year? ======= 25/euro

Darren197001

gurramok wrote: »

Darren, how did you(or as a couple) afford buying apartments every year till 2005, banks trigger happy in lending?

And how have ye afforded to buy since then, cash buyers or mortgages with big deposits to satisfy bank lending rules?

This is like a look back into my childhood

There were 4 of us in it at the start and we were comfortable.
All 4 of us had bought our own houses already at the start.
We all come from the same area, more or less and I suppose we were all taught to save from a young age as there was no money around.

We first started trying to work in the 80's. All spent time abroad and here on the dole, so didnt want that again.

Then getting good jobs helped i guess. I always found it funny when we were earning the same money as our peers and that our peers seemed to have no money left at the end of the month and we would have at least one of our full wage packets, even after paying the mortgage. And we had the same lifestyle as our peers too. Yet they always had huge credit card bills.

We were very good at spotting bargains and never took anything but the yield into account.

The biggest mistake we made was to pay off the PPR ahead of time with over payments. Should have left it running for the tax relief over the years.

The banks were very strict when we started, so wouldnt loan us too much at first, and then we started making money, so didnt actually need mortgages again after that. But we learned to take them anyway, especially when we found out you could get trackers, long time before most people knew about them.

When we finally exited we made a lot of money, but the real killing came on on the capital appreciation. Like winning the lottery a few times over. Pure luck. Probably dont have to worry about money again, but still, even now we dont just waste money.

We dont have to worry about financing now at all. The banks are used by us for accounting tricks to reduce tax liability.

I suppose we have a knack and like the whole investment way of making money, markets, pensions, deposits and now feel there is profit in property again, so back to that too. Is all we know know as we gave up our 9-5 jobs a while ago.

We just decided that now is a similar situation to when we started. Property has been through the mill. Most people agree that it looks bleak. People are happy to rent. They are where our profit will come from.
The 1 - beds are the excellent yielders by a long way, and it wont be long before other investors are competing for them, they already are, so we are in to get some at good prices. Then people will just have to move on to the 2 - beds and so on.

One thing that is very strange though that we were talking about a while ago to do with the dole.
A couple on the dole now can get how much a month? Mortgage on that apartment I am posting about is €360 a month. Wouldnt get that in my day Yes I know you have to come up with 25k first and get the mortgage, but still its a crazy situation.

Darren197001

housetypeb wrote: »

Darren
you don't seem to be allowing for
NPPR 200/year = 16 euro /month
Household charge,100/year === 8euro/month
Insurance 300/year? ======= 25/euro

As I said, I will take care of them in the year end accounts. They will change, im sure of that. Insurance is included in the management fee.

The_Conductor

Darren- I've moved your posts and responses into their own thread, as I feel its warranted. I named the thread 'Darren's Property Portfolio Diary'- if you'd like this changed, please PM me.

Kind regards,

Shane

Darren197001

smccarrick wrote: »

Darren- I've moved your posts and responses into their own thread, as I feel its warranted. I named the thread 'Darren's Property Portfolio Diary'- if you'd like this changed, please PM me.

Kind regards,

Shane

Sounds good to me. Theres probably not too much I can add now anyway, so i'll come back every now and again and when i'm updating my monthly spreadsheet.

lawnmower_man

Darren197001 wrote: »

Started in 97 when we moved in together. We had a house each and we rented one instead of selling it just in case. Also having studied economics at university I thought I was a genius economist at that stage. Turns out economics isnt as simple as that after all

So then we built up a portfolio adding an apartment or house every year until 2004, with my brother and his wife as equal partners. No commercials.

In 2005 they separated so we decided to sell everything. We figured we had ridden the wave as far as it could be ridden at that stage anyway. My opinion at the time was that there was one last surge in house prices to come with the maturity of SSIAs. €40,000 per couple with nothing else to do with it than invest in property. I figured that would lift prices ovr the tipping point and they would fall after that.
I wont pretend i knew anything about a world crash or banking crisis, or how bad it would eventually get. I was partially right, but also very lucky the way things turned out. And got very very lucky with the capital appreciation.

During that time 1997 to 2005 I learned the letting business very well, so have tweaked my strategy for this time.

1 : 1 bed apartments are the way to go for yield.

2 : Dublin is the only place where its happening for several years yet. I wouldnt even take a property for nothing in some counties.

3 : 1 bed properties in nice areas where they can be bought cheap enough and rented for a good price are what i'm going for. Swords would be an example, and where the property I will be posting about is based.

4 : Capital appreciation and taxes are something you cannot control, so leave it out of your evaluations as much as you can. Yield is the important factor. Always go for the best yield you can get.

5 : Do not go into property without being diversified otherwise also.

6 : If the yield is not performing, put the property up for sale right away.

7 : No rent allowance under any circumstances. Experience has thought me this.

8 : I have an agent who I used before will look after the properties for 8%. I dont need to do anything. In practice though they come to me with a price for a repair and I either get my own guy or tell them to go ahead. They used to charge 12% for the same service before.

9 : Get a loan, even if you dont need it for the property. You can always pay it off if it becomes the better option.

Thats just to answer a couple of questions. I am deliberately being a bit vague because I want this log to be about the facts and figures, not about what I think will happen vs what someone else would do.
I'll post my figures, everyone else can argue with each other if they want.

I'll be posting something like this (Maybe in a bit more detail) -

January (these ones are just made up numbers and comments. I'll get the real ones from my notes)
Rent received €750.
Mortgage interest paid €100.
Repairs €0
Building Management charge for Jan : €50
Agents fee : €100
Property Taxes : €0

Profit : €500

Issues : Tenant gave notice to move out on 1st March. Agent notified to have another tenant for that date.

Something along those lines. I want to hit a sweet spot between giving enough info to show the facts and giving too much personal or unneeded info.
Its just an idea for now. Some might find it useful or not. I was just asked by a friend to do it on boards, so I said OK.

EDIT : I forgot to add.
Where I am now. Bought 3 1-bed apartments in Dublin since Jan. All rented and performing more or less the same as each other. I'll only be posting a log for one of them, because I dont want to have to put too much work into this. Partners with my brother on this again. Plan to buy another one each year until we decide enough is enough or that the ship has sailed. Yields are excellent right now, and if they go below 6% then we stop.

swords seems like an unusual place to buy a one bed , surely the obvious choice for the appartment market is the city centre or therabouts , swords strikes me as three bed semi suburbia

Darren197001

lawnmower_man wrote: »

swords seems like an unusual place to buy a one bed , surely the obvious choice for the appartment market is the city centre or therabouts , swords strikes me as three bed semi suburbia

We could get a much better yield in Swords than the city center. The ones we looked at in the city center that had similar yields were tiny and would have been tossed out if someone had a choice of those ones or another slightly bigger one for the same rent. We did find a good one in the city center eventually, but Swords will still have a higher yield than it.

We're not married to Swords either. Its whatever turns up thats going to have the highest yield. Swords is a big town with a huge population and a huge catchment area in terms of employment.

And we got a big apartment (which puts it up the pecking order when a tenant has a choice) for a good price. They'll go for the biggest one given close enough rents. This is important if you dont want empty periods.

Its very hard to find a big 1-bed in the city center now with the yield required.

I just find people I trust, who are locals and ask them for information. Swords seems like its very far out, but its not at all. People who dont know or work in the area wont be interested anyway and cant be convinced its a good place to live. Those who do know the area are very happy to live there.

I've let property in Swords before and it has always been the highest yielding or thereabouts.

Dont depend on DAFT to tell you whats empty for long periods. My agent leaves properties up on daft for years, so he can just use the same ad to rent other apartments he deals with in the same complex. This works well for apartments.

We made the mistake of going out of Dublin to get the yields from 2003, but lucked out when we left the market shortly after and didnt get hammered as we probably should have done.

Theres really not much more I can add, but that different people will have different strategies to me. Whatever works for you is best.
If you think you can do better in the city center then go for it. I know I cant, but I still want to be letting in the city center so as not to have all my eggs in the one basket either, so to speak.

Im just going to post up the odd post from now on. Already i've spent more time typing on boards this month than I spend on my portfolio

indiewindy

Darren197001 wrote: »

Well my tax will be different to everyone elses.
Im getting help from an accountant friend to structure expenses etc so that I can get the max tax relief from them.
There are no fit out costs yet with this apartment as all the furniture etc is already there, but the accountant says he can put a sum in for it and get deductions. THe form is quite simple to fill in yourself, but I just need him to explain a couple of things peculiar to this situation to me. I'll take care of it at year end, but for now assume there is no deduction available.





[/B]

t

So, your accountant is recommending that you put in a bogus figure on your tax return

Darren197001

indiewindy wrote: »

So, your accountant is recommending that you put in a bogus figure on your tax return

Why do people always assume you are doing something illegal when you say you are trying to lower your tax liability?

He is trying to find out if the tax situation can be improved. If it cant it cant and nothing changes. There will be nothing illegal. Its just something which may provide a lower taxable amount if its possible.

Definitely no more posts for a while from me now. Its starting to get argumentative, which is not what I wanted. I'll look in again in a few weeks.

lawnmower_man

Darren197001 wrote: »

We could get a much better yield in Swords than the city center. The ones we looked at in the city center that had similar yields were tiny and would have been tossed out if someone had a choice of those ones or another slightly bigger one for the same rent. We did find a good one in the city center eventually, but Swords will still have a higher yield than it.

We're not married to Swords either. Its whatever turns up thats going to have the highest yield. Swords is a big town with a huge population and a huge catchment area in terms of employment.

And we got a big apartment (which puts it up the pecking order when a tenant has a choice) for a good price. They'll go for the biggest one given close enough rents. This is important if you dont want empty periods.

Its very hard to find a big 1-bed in the city center now with the yield required.

I just find people I trust, who are locals and ask them for information. Swords seems like its very far out, but its not at all. People who dont know or work in the area wont be interested anyway and cant be convinced its a good place to live. Those who do know the area are very happy to live there.

I've let property in Swords before and it has always been the highest yielding or thereabouts.

Dont depend on DAFT to tell you whats empty for long periods. My agent leaves properties up on daft for years, so he can just use the same ad to rent other apartments he deals with in the same complex. This works well for apartments.

We made the mistake of going out of Dublin to get the yields from 2003, but lucked out when we left the market shortly after and didnt get hammered as we probably should have done.

Theres really not much more I can add, but that different people will have different strategies to me. Whatever works for you is best.
If you think you can do better in the city center then go for it. I know I cant, but I still want to be letting in the city center so as not to have all my eggs in the one basket either, so to speak.

Im just going to post up the odd post from now on. Already i've spent more time typing on boards this month than I spend on my portfolio

not sure i agree but its an interesting perspective

i see plenty of very well finished appartments going for less than 100 k in santry , santry is no further from the city than swords , granted it doesnt have as good of transport

lawnmower_man

indiewindy wrote: »

So, your accountant is recommending that you put in a bogus figure on your tax return

yeah , thats what the man said joe higgins

Man007

Fair play darren this is exactly what this forum needs some factual info from someone like yourself instead of the armchair econonimists who will have you believe the world is about to end and who won't listen to reasoned arguments.

I'm not saying the market is picking up or it isn't but great idea for a thread and I will watch with interest.

Monty Burnz

Man007 wrote: »

Fair play darren this is exactly what this forum needs some factual info from someone like yourself instead of the armchair econonimists who will have you believe the world is about to end and who won't listen to reasoned arguments.

Yes. Those people are nothing like the 'bubble is back!' people who post no evidence and don't respond to any arguments, and are such a nice breath of fresh air. Only instead of an armchair, those economists are most like posting from inside a very quiet estate agent's office... :rolleyes:

RATM

lawnmower_man wrote: »

not sure i agree but its an interesting perspective

i see plenty of very well finished appartments going for less than 100 k in santry , santry is no further from the city than swords , granted it doesnt have as good of transport

Is this the type of place you're referring to in Santry ?
http://www.daft.ie/searchsale.daft?id=620076

If so stay away- that particular development has its problems. It is Santry Cross which is really the top of the Ballymun Road and can be a rough area at times- you'd have difficulty finding tenants there. Also a lot of apartments in that area are lying empty, this is despite that DCU is only down the road.

Darren is right with Swords though. I've a few friends out that way and it really is a kind of a satellite town of Dublin. There is a big shopping center, cinemas, good pubs and restaurants, etc. You could live your whole life in Swords and never have a real need to go to the city. Although it is much further from the city center than somewhere like Santry that doesn't matter so much mainly because the majority of people in Swords work in Swords too. The airport alone provides employment for over 5,000 people. That means there are a lot of people in transient type jobs like waiting tables, bar work, baggage handlers, air hostesses, often these bunch of people are more likely to be renters. On top of that you've also a lot of people working in Swords Business Park- Hertz run their entire European operation out of there and have 1,100 staff on site with another 50 announced late last year. Again many of the jobs in there are likely to be held by people who rent- the call center workers speak every possible European language. There are Germans, French, Italians, Spanish, Czechs, etc in abundance and most of them are just here for a few years renting before they move on home or elsewhere.

As far as I know the IDA or Enterprise Ireland recently announced an industrial park dedicated to food manufacturing businesses only. The idea is that they are near to the airport so they can export efficiently. Also that international buyers can fly in and do business with a lot of companies within the same area. If it takes off it should bring another couple of thousand manufacturing jobs to the area, again a lot of these people are likely to be renters, at least for the first few years.

daltonmd

Darren197001 wrote: »

Why do people always assume you are doing something illegal when you say you are trying to lower your tax liability?

He is trying to find out if the tax situation can be improved. If it cant it cant and nothing changes. There will be nothing illegal. Its just something which may provide a lower taxable amount if its possible.

Definitely no more posts for a while from me now. Its starting to get argumentative, which is not what I wanted. I'll look in again in a few weeks.

Just put them on the ignore list and keep posting. Don't rise to it. If they won't want to accept that the posts are for information only then that's their lookout.

I'm just really interested in can you make money, because it's really easy for people to give their views (myself included) then look at the facts. And I also think it's really important that investors make money, are seen to make money because that's what attracts other investors.


I've always thought that one beds were nice little earners, I know a lot of people from Swords who are very happy there, buzzing, great CC links, shopping, Airport, so a lot of airport workers.

indiewindy

Darren197001 wrote: »

Why do people always assume you are doing something illegal when you say you are trying to lower your tax liability?

He is trying to find out if the tax situation can be improved. If it cant it cant and nothing changes. There will be nothing illegal. Its just something which may provide a lower taxable amount if its possible.

Definitely no more posts for a while from me now. Its starting to get argumentative, which is not what I wanted. I'll look in again in a few weeks.

There is a huge difference between tax avoidance and putting fake figures on a tax return. Your initial post clearly suggested that your accountant was recommending claiming expenses that were not occured, how that can be seen as avoidance is rather unusual.

The_Conductor

Guys- if you want to discuss tax avoidance versus tax evasion and what they entail- we have a taxation forum, which has very specific rules governing discussions like this. The accommodation and property forum- is not an appropriate venue for a discussion of this nature- so please drop it, now.

Duggys Housemate

He did say he would put a figure for expenses on furniture on an already furnished apt. Anyway, small beans.

My question is the length of the mortgage. Darren seems to be 50 ish. Is the 30 year mortgage just because he already has money?

Marcusm

indiewindy wrote: »

There is a huge difference between tax avoidance and putting fake figures on a tax return. Your initial post clearly suggested that your accountant was recommending claiming expenses that were not occured, how that can be seen as avoidance is rather unusual.

It helps if you read Darren's posts:

"There are no fit out costs yet with this apartment as all the furniture etc is already there, but the accountant says he can put a sum in for it and get deductions"


He acquired a furnished apartment; the cost of acquisition will need to be split between the apartment and the furniture. He will get a 12.5% capital allowance/tax relief on the amount attributed to the furniture.

The inherent bias existing in someone who assumes the worst despite the relative openness of the OP concerning his actions must lead to a fairly bleak outlook on life.

indiewindy

Marcusm wrote: »

It helps if you read Darren's posts:

"There are no fit out costs yet with this apartment as all the furniture etc is already there, but the accountant says he can put a sum in for it and get deductions"


He acquired a furnished apartment; the cost of acquisition will need to be split between the apartment and the furniture. He will get a 12.5% capital allowance/tax relief on the amount attributed to the furniture.

The inherent bias existing in someone who assumes the worst despite the relative openness of the OP concerning his actions must lead to a fairly bleak outlook on life.

not really, agree with everything o.p wrote except one issue, you can check over on askaboutmoney, have checked this out when doing my own calculations, . Yields on 1 beds do make sense for investors at the moment and if you keep an eye on daft you see them go very quickly, in the right locations of course and the o.p comes across as some-one who knows what their at

Zamboni

Nice idea for a thread. Will follow with interest.

bear_hunter

interesting project OP

was wondering , was stoneybatter ever on your radar for investing ?

eclectichoney

Nice thread OP. Just wondering where you are getting 4%+ AER on your savings?

Thanks

kkelliher

Darren197001 wrote: »

Insurance is included in the management fee.

Just to be carful on this issue as alot of people get caught out.

The building in an apartment complex situation is covered by the management fee. Landlord contents and liability as an owner of a rented property is not covered by the management fee and therefore you should have a separate policy for this.

jmayo

Darren197001 wrote: »

Why do people always assume you are doing something illegal when you say you are trying to lower your tax liability?

He is trying to find out if the tax situation can be improved. If it cant it cant and nothing changes. There will be nothing illegal. Its just something which may provide a lower taxable amount if its possible.

Some people see tax avoidance as tax evasion.
There is a difference and there is nothing wrong with writing off expenses encurred or finding ways of lowering one's tax liability.

Darren197001 wrote: »

Definitely no more posts for a while from me now. Its starting to get argumentative, which is not what I wanted. I'll look in again in a few weeks.

BTW good idea for a thread.
Can I ask one thing ?
If your partners relationship hadn't broken up circa 2005, do you think you would have still sold off your investments or would you have held on ?

Man007 wrote: »

Fair play darren this is exactly what this forum needs some factual info from someone like yourself instead of the armchair econonimists who will have you believe the world is about to end and who won't listen to reasoned arguments.

I think you have it ar**ways.
Usually the reasoned arguments have been coming from the bears who believe the market has a bit to fall yet and that there will be no great recovery as claimed by others.
You may call the bears armchair economists, but some might say a lot of it is common sense what with the way the economy and market has been.

As pointed out by others, there have been a fair few posters who have been talking up the property market, but refuse to give any concrete reasons for doing so.

Duggys Housemate

jmayo wrote: »

Some people see tax avoidance as tax evasion.
There is a difference and there is nothing wrong with writing off expenses encurred or finding ways of lowering one's tax liability.

In this case it was evasion.

As pointed out by others, there have been a fair few posters who have been talking up the property market, but refuse to give any concrete reasons for doing so.

Darren's posts are fairly informative. Thinking of getting in myself.

bear_hunter

jmayo wrote: »

Some people see tax avoidance as tax evasion.
There is a difference and there is nothing wrong with writing off expenses encurred or finding ways of lowering one's tax liability.



BTW good idea for a thread.
Can I ask one thing ?
If your partners relationship hadn't broken up circa 2005, do you think you would have still sold off your investments or would you have held on ?



I think you have it ar**ways.
Usually the reasoned arguments have been coming from the bears who believe the market has a bit to fall yet and that there will be no great recovery as claimed by others.
You may call the bears armchair economists, but some might say a lot of it is common sense what with the way the economy and market has been.

As pointed out by others, there have been a fair few posters who have been talking up the property market, but refuse to give any concrete reasons for doing so.

while i agree that property market may have further to fall , when yields of over 6% are available, this in itself offers a compelling investment , the so called experts are predicting that the appartment market ( even in dublin ) has further to fall but if someone can buy a one bed for around 100 k and look forward to 750 euro per month rent , thats 9% per year gross , hard to call its a poor shot

murphaph

Duggys Housemate wrote: »

In this case it was evasion.

If he bought a 90k apartment furnished then some of that 90k went on....furniture, which is a capital expense and he can depreciate it over the 8 years @12.5% p.a.

It is not only legal, it is fair. The furniture won't last forever and it is an expense when it needs replacing.

Duggys Housemate

murphaph wrote: »

If he bought a 90k apartment furnished then some of that 90k went on....furniture, which is a capital expense and he can depreciate it over the 8 years @12.5% p.a.

It is not only legal, it is fair. The furniture won't last forever and it is an expense when it needs replacing.

Hmmm, maybe. Fair enough, avoidance then. And who can talk about avoidance who has a pension fund?

D3PO

Darren197001 wrote: »

I won't go into the reasons I think things are picking up .

I was interested until I read this. You are already pre empting the future and therefore have a skewed perception.

makes this thread no more use than anybody elses opinion from either side of the fence

murphaph

D3PO wrote: »

I was interested until I read this. You are already pre empting the future and therefore have a skewed perception.

makes this thread no more use than anybody elses opinion from either side of the fence

He's going to post up his figures each month for all to see. Everyone has a position on the property market but this guy is actually in it and can see how it's performing on a small scale. The thread is not about the market at large anway, just about the OP's portfolio

D3PO

murphaph wrote: »

He's going to post up his figures each month for all to see. Everyone has a position on the property market but this guy is actually in it and can see how it's performing on a small scale. The thread is not about the market at large anway, just about the OP's portfolio

But how can you view this as a microcosm of the irish property market.

high level figures mean nothing to be honest. Just becasue somebody is turning a "profit" monthly doesnt mean anything.

I notice some massive massive things people are missing.

a) asset value. Is it depreciating
b) how much was paid for the property, how much was his deposit. if you dont know how can you work out the yield.

if you dont know the yield how can you properly judge if its a good investment. just because your turning a profit doesnt make it a good thing.

murphaph

D3PO wrote: »

But how can you view this as a microcosm of the irish property market.

high level figures mean nothing to be honest. Just becasue somebody is turning a "profit" monthly doesnt mean anything.

I notice some massive massive things people are missing.

a) asset value. Is it depreciating
b) how much was paid for the property, how much was his deposit. if you dont know how can you work out the yield.

if you dont know the yield how can you properly judge if its a good investment. just because your turning a profit doesnt make it a good thing.

a) Too much interest was placed on asset value in the past. Landlords were more speculators than anything else. The OP is focused on yield, where all pro landlords should be focused. So long as the asset delivers the required yield, the value of the asset is less relevant. It could plummet of course, but the OP would see his yield drop off as tenants moved to cheaper property or bought themselves and he says he'll bail out if yield hits 6%.

b) He had the purchase price in cash, but he took out a mortgage to take advantage of current tax law, not because he needed funding. He keeps the full purchase price on deposit earning more interest than he pays in mortgage interest. He can pay down the loan at any time if tax code changes make it more appealing to do so.

It's an interesting thread to me as someone who rents out a residential property anyway.

Zab

What is the tax incentive that made OP get the mortgage? I see mortgage interest relief but this only appears to apply to your primary residence, and I assume can't be applied to multiple properties anyway.

D3PO

Zab wrote: »

What is the tax incentive that made OP get the mortgage? I see mortgage interest relief but this only appears to apply to your primary residence, and I assume can't be applied to multiple properties anyway.

Mortgage Interest (75%) of it can be written off against tax. So i.e 4% interest OP is essentially paying 1% interest.

if he can earn more after dirt deduction with the cash on deposit it makes more sense to have the mrotgage write off thye interest against tax and earn more off the deposit.

its clever, not something most would be in a position to do but if you were its the right strategy.

D3PO

murphaph wrote: »

a) Too much interest was placed on asset value in the past. Landlords were more speculators than anything else. The OP is focused on yield, where all pro landlords should be focused. So long as the asset delivers the required yield, the value of the asset is less relevant. It could plummet of course, but the OP would see his yield drop off as tenants moved to cheaper property or bought themselves and he says he'll bail out if yield hits 6%.

b) He had the purchase price in cash, but he took out a mortgage to take advantage of current tax law, not because he needed funding. He keeps the full purchase price on deposit earning more interest than he pays in mortgage interest. He can pay down the loan at any time if tax code changes make it more appealing to do so.

It's an interesting thread to me as someone who rents out a residential property anyway.

agree yield is more important. didnt read enough to see point B. Right strategy by the OP of course but I see dont see the value of the thread.

what does it show or prove ? It doesnt prove that property investment is right in the current market or wrong all it does is allow the OP show he has made good or bad investments nothing more.

in the grand scheme of things it has no value in helping people from any more educated opinion on the general market.

Zab

D3PO wrote: »

Mortgage Interest (75%) of it can be written off against tax. So i.e 4% interest OP is essentially paying 1% interest.

if he can earn more after dirt deduction with the cash on deposit it makes more sense to have the mrotgage write off thye interest against tax and earn more off the deposit.

its clever, not something most would be in a position to do but if you were its the right strategy.

Okay, so this is something you put on your tax return in order to reduce your tax due, rather than the scheme I linked above. I assume most aren't in a position to do it as it requires you to have enough cash to buy the property in the first place.

Darren197001

Jul 2012
Rent : 775
Interest : 230
Complex Management fee : 50 (€600 per year)
Repairs €0
Agents fee : €62


Profit : €433

Notes : Rent was late this month. Ulsterbanks fault.

Darren197001

Just a quick update.
I'll answer a couple of questions from the previous posts just before I go off on my hols.

lawnmower_man wrote: »

not sure i agree but its an interesting perspective

i see plenty of very well finished appartments going for less than 100 k in santry , santry is no further from the city than swords , granted it doesnt have as good of transport

I used to live in Santry. Santry is a place you can sleep in. Not really a place to live in. Just my opinion. You couldn't spend a couple of weeks in Santry without having to go into the city center. There are other places where you could.

bear_hunter wrote: »

interesting project OP

was wondering , was stoneybatter ever on your radar for investing ?

I did look befiore, but I didn't come across anything there to give me the yield I want at the time.

kkelliher wrote: »

Just to be carful on this issue as alot of people get caught out.

The building in an apartment complex situation is covered by the management fee. Landlord contents and liability as an owner of a rented property is not covered by the management fee and therefore you should have a separate policy for this.

Contents are not a concern for me. I always look at the block policy to see if public liability is covered. I've never seen it not covered. If I did find one where it wasn't covered, i won't invest in it. Sloppy management.

eclectichoney wrote: »

Nice thread OP. Just wondering where you are getting 4%+ AER on your savings?

Thanks

Lots of places will do this.

jmayo wrote: »

Can I ask one thing ?
If your partners relationship hadn't broken up circa 2005, do you think you would have still sold off your investments or would you have held on ?

An interesting one. We had decided that if we saw any shock to the US or UK economies that we were going to get out straight away because they would be sure to ripple through to Ireland. Everything does, from doughnut shops to coffee shops. Increasing in the US -> Increasing in Ireland and so on.

At the time we got out we had not seen these shocks yet, but we would have seen them coming before they hit Ireland. If they hit Ireland first - well that would have been a disaster for us wit that plan because we would have been too late then.

Now part of our exit strategy is that if we ever make 30% capital gain on any property we sell it regardless of whether we think it will get better or not. It will be a long time before that happens though

Duggys Housemate wrote: »

He did say he would put a figure for expenses on furniture on an already furnished apt. Anyway, small beans.

My question is the length of the mortgage. Darren seems to be 50 ish. Is the 30 year mortgage just because he already has money?

I hope I have a long way to go before I'm 50
But I see a lot of posts on the internet of people asking will they get a mortgage. There is only one entity that can answer that question. The one you are asking for the mortgage.
My niece asked everyone would she get a mortgage before Christmas and I just told her to ask the bank. She got it. She is a secretary in a logistics company and her boyfriend is a driver. I didn't think they would get it, but there you go.

Now off to get some sun on my bones for a few weeks.

People have asked why I am doing this.
My reasons for doing this is to diversify my current portfolio and to make some money from a maximum of 4 hours work per month.

kkelliher

Darren197001 wrote: »

Contents are not a concern for me. I always look at the block policy to see if public liability is covered. I've never seen it not covered. If I did find one where it wasn't covered, i won't invest in it. Sloppy management.

Yur liability to your tenant as a result of injury caused by your property to the tenant is not covered by the block policy.

poker--addict

Darren may I ask, you come across as fairly well clued in and have educated yourself and understand the risk/yield of what your are doing. The price of the property you are looking are relatively low figures, is there a reason you didn't want to do this alone and got a partner?

Could you also give us your point of view on the yield you require and what influences it for you in swords?