Buying from Australia

hilaryBB

Hello...

Im a 24yo Irish citizen living in Australia. I have been here for the last four years but i am not yet a resident. I recently started thinking about buying an investment property in Ireland. It would be my first time buying, getting a mortgage and being a landlady with the intention to sell at some point. I am not eligible for a mortgage here and even if i was i would rather buy in Ireland because like everything else here, property prices are out of control. I first need too see if i could get a mortgage from an Irish financial institution but in the mean time any one has some advice or intelligent opinions I would love to hear it. Cheers

Mrs OBumble

How much deposit do you have?

Why do you want to buy a property?

hilaryBB

Mrs OBumble wrote: »

How much deposit do you have?

Why do you want to buy a property?

I think in 20 years time the property market will have recovered from the recession and by that stage il have a nice profitable house to sell. That's mainly why I want to buy in Ireland. I could come up with five grand or ten grand for the deposit.

Zamboni

hilaryBB wrote: »

I think in 20 years time the property market will have recovered from the recession and by that stage il have a nice profitable house to sell. That's mainly why I want to buy in Ireland. I could come up with five grand or ten grand for the deposit.

Just to take the purchase price into isolation and leave all other factors (eligibility, earnings, etc)
You want to buy a house in Ireland as an investment, by getting a mortgage with a deposit of 10k, that will be rented out - So that means you are looking at a total purchase price at around €40k with AIB.
Where are you planning on buying?

hilaryBB

Zamboni wrote: »

Just to take the purchase price into isolation and leave all other factors (eligibility, earnings, etc)
You want to buy a house in Ireland as an investment, by getting a mortgage with a deposit of 10k, that will be rented out - So that means you are looking at a total purchase price at around €40k with AIB.
Where are you planning on buying?

I wanted some opinions on where to buy actually, I am very flexible, but I want to be smart about it and buy in an area of growth and somewhere easy to rent out.. I was thinking of Wicklow just because it's close to the capital and has the coast and mountains, nice landscape, easy access routes etc.. I am very open to suggestions at this point.

hfallada

I can't understand your logic for buying the house. You hope to make a profit in 20 years? You are nearly better off buying low risk stocks with a good dividend like a bank ( not an Irish one ) or a food company. Even an index like S&P 500. You are just buying a house because you want in the hope you might make a profit(you will, but making a decent return along the way is far more important).

unattendedbag

I sincerely doubt it's possible to get a mortgage from an Irish bank while living in Australia. 10k won't get you too far anyway. Have you thought about maintenance? Who will run the property when you are so far away? Will you have to hire a rental agent. There are cheap apartments around ballymun, finglas, tallaght that may be got for less than 100k but they need upkeep and it'd be a better cash investment.

My suggestion is use the higher pay rates and job opportunities out there to your advantage. I've heard many stories of lads working their asses off for 2 years in the mining industry and coming home with over €200k cash to build/buy their own house.

hilaryBB

hfallada wrote: »

I can't understand your logic for buying the house. You hope to make a profit in 20 years? You are nearly better off buying low risk stocks with a good dividend like a bank ( not an Irish one ) or a food company. Even an index like S&P 500. You are just buying a house because you want in the hope you might make a profit(you will, but making a decent return along the way is far more important).

I have zero interest in stocks nor do I want to start putting money into something I am not knowledgeable in. I want to buy a house in Ireland to have roots there, to have it as a safety net and to get my foot in the property ladder at a time when the cost is low. Also having a rental return on a house hopefully gaining value every year, given the choice between buying a property in Australia or Ireland I am going with Ireland.

Zamboni

Ok so €40k purchase price in Wicklow.

There are six properties for sale less than €50k.
Are any of these what you had in mind?

http://www.daft.ie/searchsale.daft?s%5Bcc_id%5D=c4&s%5Ba_id%5D=&s%5Bmnp%5D=25000&s%5Bmxp%5D=50000&s%5Bmnb%5D=1&s%5Bmxb%5D=&s%5Bmna%5D=&s%5Bmxa%5D=&s%5Bpt_id%5D=&search=1&s%5Ba_id_transport%5D=0&s%5Bsearch_type%5D=sale&s%5Badvanced%5D=1&s%5Brefreshmap%5D=1

hilaryBB

unattendedbag wrote: »

I sincerely doubt it's possible to get a mortgage from an Irish bank while living in Australia. 10k won't get you too far anyway. Have you thought about maintenance? Who will run the property when you are so far away? Will you have to hire a rental agent. There are cheap apartments around ballymun, finglas, tallaght that may be got for less than 100k but they need upkeep and it'd be a better cash investment.

My suggestion is use the higher pay rates and job opportunities out there to your advantage. I've heard many stories of lads working their asses off for 2 years in the mining industry and coming home with over €200k cash to build/buy their own house.

Ok well I have looked at property prices and I wouldn't be buying in Dublin anyway. Mining is great if your of the right criteria for the job. That's not for me though and I don't wish to come home and build a house. I would use an agent for maintenance and management.

Pro Hoc Vice

hilaryBB wrote: »

I have zero interest in stocks nor do I want to start putting money into something I am not knowledgeable in. I want to buy a house in Ireland to have roots there, to have it as a safety net and to get my foot in the property ladder at a time when the cost is low. Also having a rental return on a house hopefully gaining value every year, given the choice between buying a property in Australia or Ireland I am going with Ireland.

If you manage to buy a house, your tennant will have to deduct 20% of the rent at source and remit to the tax man. The income is not only taxable but you will have to pay PRSI. You do understand that you will in fact be making a profit for the bank and in all likelihood be subsidising a tennants Accomodation. In my opinion even a rental income return of 10% you will have to subsidise because of interest payments and tax issues. Not to take into account the issues with bad tennants and if their is any problems with the propert or fixtures or fittings. BTW the interest payments are only allowable at 75%. So if you get €1000 rental income and pay €1000.00 in interest, you will have to pay tax on €250 plus you would need to check out PRSI situation.

But in reality you will find it almost impossible to get a bank loan in your situation.

The_Morrigan

hilary, non resident lending is the exception rather than the norm.
Couple of points:
If any bank were to lend to a non resident for an investment property you would have to be earning a seriously large salary (in excess of 75K Euro, maybe higher depending on the bank).
Loan would only be 75% of the purchase price, so 5-10K in deposit won't get you far as you'll need 25% of the purchase price.
There are also costs on top of this - legal costs for the purchase; rental costs (PRTB, Maintenance, tax); professional fees (letting agent, accountant); property costs (property tax, management fees).


Have you factored any of this into your plan?

marathonic

Pro Hoc Vice wrote: »

But in reality you will find it almost impossible to get a bank loan in your situation.

This!

I have a brother in Australia looking into purchasing at home before his return. Even with a good deposit and a house that represents better security to the bank than any €40,000 dive, it's nigh on impossible. With PTSB, he'd be able to get a mortgage IF his income was more than the Australian equivalent of €100,000.

Even locals are having difficulty securing mortgage and you will be encountering a lot of additional hurdles including:

• You are non-resident and more difficult to chase for arrears
• You don't have much of a deposit
• The level of deposit suggests your income isn't what an Irish bank would call significant

phormium

The only advice I could give you is forget this plan, it won't work for many reasons.

aido79

hilaryBB wrote: »

Hello...

Im a 24yo Irish citizen living in Australia. I have been here for the last four years but i am not yet a resident. I recently started thinking about buying an investment property in Ireland. It would be my first time buying, getting a mortgage and being a landlady with the intention to sell at some point. I am not eligible for a mortgage here and even if i was i would rather buy in Ireland because like everything else here, property prices are out of control. I first need too see if i could get a mortgage from an Irish financial institution but in the mean time any one has some advice or intelligent opinions I would love to hear it. Cheers

I think you have spent too much time in the Aussie sun to be honest. Unless you are on a really good salary in Australia then I don't really see how you would be able to pay rent in Australia and pay a mortgage in Ireland that you have a minute chance of getting. Even now with house prices as low as they've been for years you would struggle to find anything that is close to rentable for less than 100k so my best advice would be to keep saving until you have at 25ķ+ for a deposit before you consider approaching a lender.

Electric Sheep

hilaryBB wrote: »

I have zero interest in stocks nor do I want to start putting money into something I am not knowledgeable in. I want to buy a house in Ireland to have roots there, to have it as a safety net and to get my foot in the property ladder at a time when the cost is low. Also having a rental return on a house hopefully gaining value every year, given the choice between buying a property in Australia or Ireland I am going with Ireland.

Good Lord, are people still swallowing the "foot on the property ladder" line?

The_Conductor

Keep saving- get a proper deposit together- and when you manage to find a job in Ireland and want to come home- do so- and even then wait- after you've been permanent in a job in Ireland for a year- and are certain you intend to stay here- then start looking.

FYI- 40k won't even buy you a hovel in Wicklow- most properties in this sort of price range aren't structurally sound- some may even be without roofs. It would cost you a minimum of another 40-50k, ontop of the purchase price, to bring the property up to building specs and minimal renting requirements.

You've already been warned about the tax implications- a straightline 20% of gross rental income + PRSI- and then all your costs ontop of this. Given your budget- the sums really don't add up- and its not even a close run thing- the sums are nuts.

Keep saving- who knows what you'll want to do in a few years time- you seem to have seriously rose tinted ideas of coming back here and everything being hunky dory- I wish I was as confident as you are in the future of our little country- but I'm not.

Pro Hoc Vice

Electric Sheep wrote: »

Good Lord, are people still swallowing the "foot on the property ladder" line?

I know it just shows collective amnesia is real, I'm hearing it more and more online and in real life. Buying a house is great if it adds up but I'm hearing more and more of these tiger type ideas.

Mrs OBumble

Where are your family? Why are they not sufficient roots in Ireland for you, at the age of 24?

How do you know that you will ever return to Ireland?


(I'm not being mean: I did make sure that I had a property in my home country before I went travelling. But that meant I didn't travel 'til I was 40.)

hilaryBB

Mrs OBumble wrote: »

Where are your family? Why are they not sufficient roots in Ireland for you, at the age of 24?

How do you know that you will ever return to Ireland?


(I'm not being mean: I did make sure that I had a property in my home country before I went travelling. But that meant I didn't travel 'til I was 40.)

I have family in Ireland, it's home at the end of the day. Thanks for your input.

hilaryBB

Pro Hoc Vice wrote: »

I know it just shows collective amnesia is real, I'm hearing it more and more online and in real life. Buying a house is great if it adds up but I'm hearing more and more of these tiger type ideas.

Maybe people talking about these 'tiger type ideas' have the means to be talking about it for all you know I could be a millionaire getting the opinions of an Irish resident. and the ones that don't, well maybe they're the types who are not going to squashed into little recession minded government repressed robots, are still dreaming.

hilaryBB

aido79 wrote: »

I think you have spent too much time in the Aussie sun to be honest. Unless you are on a really good salary in Australia then I don't really see how you would be able to pay rent in Australia and pay a mortgage in Ireland that you have a minute chance of getting. Even now with house prices as low as they've been for years you would struggle to find anything that is close to rentable for less than 100k so my best advice would be to keep saving until you have at 25ķ+ for a deposit before you consider approaching a lender.

Thanks for you opinions. There are actually plenty of rentable properties dotted around the country for less then 100k.

johnnyskeleton

hilaryBB wrote: »

Maybe people talking about these 'tiger type ideas' have the means to be talking about it for all you know I could be a millionaire getting the opinions of an Irish resident. and the ones that don't, well maybe they're the types who are not going to squashed into little recession minded government repressed robots, are still dreaming.

Well you are asking about a mortgage and said you could maybe get 5-10k as a deposit.

If your question was "I'm a millionaire and I want to buy a good house in Ireland" people would give you advice orientated to that.

The banks will usually look at the following:
1. Banking history with the bank;
2. Where the deposit comes from eg savings rather than a gift;
3. Work history, permanency of job, having assets in the jurisdiction;
4. Purpose of the loan.

Also, someone has to view the property before buying, and that person should be you.

So people really don't mean any disrespect, they are only pointing out how difficult a proposition it is.

hilaryBB

Electric Sheep wrote: »

Good Lord, are people still swallowing the "foot on the property ladder" line?

It's a term which can describe buying your first property. What's that got to do with swallowing a 'line'?

aido79

hilaryBB wrote: »

Thanks for you opinions. There are actually plenty of rentable properties dotted around the country for less then 100k.

You're welcome. Yes it is possible to buy a house for less than 100k...but unless you can get a decent deposit together and convince a bank in Ireland or Australia to give you a mortgage they may as well be selling for millions of euro. I'm guessing you're on a 457 visa in Australia as you don't have PR. Australian banks are very reluctant to lend to people on temporary visas and usually look for a 20 percent deposit for mortgages and are even more reluctant to lend for overseas purchases. Have you been in contact with a bank in Australia? It sounds to me like this is something you haven't really looked into much or thought about very well to be honest.

Mr.Fred

Forget about mortgages and whether its possible.

40k in Wicklow you must be joking it's my home county and I refused to pay the inflated prices caised by the influx of dubs looking for cheaper homes close to the city.