Investment Property???

Calipo79

We are in the lucky position of almost having secured approval for an investment property - hoping to get either a 2 bed apart or a 3 bed house. We are thinking of buying in Maynooth, Kilcock or Celbridge and renting the house out. We haven't really done a hugh amount of research on this as yet and are only starting to do proper research now. Obviously we are looking at cost of property and rental yield but I'm conscious we need to also take the following into account : tax on rent, cost of furniture, cost of solicitors, property tax etc

Any thoughts on whether this would be a good investment and what else should we look into? Also any guidelines on tax on rent and other costs would be appreciated

pooch90

Please buy my house in the thread below and rent it to us! Tipperary is great

D3PO

Calipo79 wrote: »

Any thoughts on whether this would be a good investment

with zero figures on cost and yield how on earth could somebody answer that for you ?

quadrifoglio verde

Calipo79 wrote: »

We are in the lucky position of almost having secured approval for an investment property - hoping to get either a 2 bed apart or a 3 bed house. We are thinking of buying in Maynooth, Kilcock or Celbridge and renting the house out. We haven't really done a hugh amount of research on this as yet and are only starting to do proper research now. Obviously we are looking at cost of property and rental yield but I'm conscious we need to also take the following into account : tax on rent, cost of furniture, cost of solicitors, property tax etc

Any thoughts on whether this would be a good investment and what else should we look into? Also any guidelines on tax on rent and other costs would be appreciated

Once your willing to accept that it can take years to get a non paying tenant out, work away!
Also you haven't really done a huge amount of research Is this 2006 again :eek:
Start by reading the rta 2004 and speaking with your accountant re the tax issues. You will pay tax at the higher rate of tax on the income as well, If as I'm guessing you already pay the higher rate. Then there's prsi and USC on it I think.

AfterHrsProp

quadrifoglio verde wrote: »

Once your willing to accept that it can take years to get a non paying tenant out, work away!
Also you haven't really done a huge amount of research Is this 2006 again :eek:
Start by reading the rta 2004 and speaking with your accountant re the tax issues. You will pay tax at the higher rate of tax on the income as well, If as I'm guessing you already pay the higher rate. Then there's prsi and USC on it I think.

Yes your correct concerning the income tax that you pay but you only pay the higher rate of tax on the income above your expenses if you earn above 32k per annum already.

I've private messaged the OP a table I came across previously which gives a good insight into the things someone needs to take into consideration if they are thinking of buying an investment property. If anyone else would like this table, just pm me. Thanks

AfterHrsProp

quadrifoglio verde wrote: »

Once your willing to accept that it can take years to get a non paying tenant out, work away!
Also you haven't really done a huge amount of research Is this 2006 again :eek:
Start by reading the rta 2004 and speaking with your accountant re the tax issues. You will pay tax at the higher rate of tax on the income as well, If as I'm guessing you already pay the higher rate. Then there's prsi and USC on it I think.

Also it doesn't take years to get a non paying tenant out, this process usually takes about ten months only if all other avenues have been exhausted. The risk of something like this can be greatly reduced if due diligence is applied, for example, previous tenancy references are checked, work references are checked.

emeldc

AfterHrsProp wrote: »

Also it doesn't take years to get a non paying tenant out, this process usually takes about ten months only if all other avenues have been exhausted. The risk of something like this can be greatly reduced if due diligence is applied, for example, previous tenancy references are checked, work references are checked.

If the tenant plays hard ball and uses all their rights of appeal, sick notes, adjournments etc, it can easily take 18 months and more to get them out. But most of the scrotes just abandon the place after 5 or 6 months but not before dismantling the gaff. Not trying to put you off OP :rolleyes:.

Little Miss Cutie

OP, I would really have to question why anyone would want to become landlords. Not just you but anyone that has to take mortgage to finance it.

In all likelihood your mortgage repayments will include a capital element which is not tax deductible and there is a restriction on the allowable interest. So most likely you will be paying tax on income you receive and topping up the mortgage.

In my opinion, there is going to be further to changes to the tax structure to move the rental market towards a professional business rather than LL with one or two properties.

Personally if I could afford to fund a rental property monthly I would either just save that money or invest in a low risk pension which would be more tax advantageous.

Just my opinion and not meant to be disrespectful to the OP.

murphaph

Calipo79 wrote: »

We are in the lucky position of almost having secured approval for an investment property

Erm, you know there are thousands of people out there who wish they'd never been approved for their investment mortgages.

Sorry, but your lack of any research before going out to get financing approved sort of scares me on your behalf.

You need to take this stuff very seriously. You will be a landlord. It is a risky thing to be. Little legal protection. Can you pay that mortgage for a year or 2 when your tenant decides to stop paying rent and over hold the property?

It is not some passive investment that just gives you a return. Are you ready for that?

desertcircus

What are you hoping to get from this? If you're looking to build a nest egg for retirement, then you could be better off putting the money in question into a pension fund. Depending on your age, you may be able to claim tax back on the lot - almost doubling your investment at a stroke if you're at the higher rate.

handlemaster

The OP just needs to work the figures, if that all adds up and he/she is happy with the risk then fire ahead. There are alot of people on Accomodation & Property who think Landlords rob the tenant blind and have a big fat bank account so if your lacking the confidence to go ahead just read some of their posts. Been a Landlord is very easy ;-) ..... NOT

MouseTail

If you want to invest in Irish property and have the cash, would you consider a REIT? You get the exposure to the market without the tax penalties or the hassle.

ffactj

OP a friend of mine was telling me (though its around 2 years ago now he was telling me so im a bit sketchy on the detail) that he has an investment property and there is a company in Dublin who he lets it to on a 5 year contract.
They then let it out to tenants.
He was saying he gets about 20% below the market rate and just forgets about the property altogether. He gets a report on the condition and tenants every 3 months or so, as well as a report if the rent has been increased/decreased.
After the 5 years (i think he has only a year or two left now) he either renews for another 5 years or just takes over the current tenants, or he can take vacant possession.

It sounds kind of like the ras scheme, but without the owner needing to take responsibility for the tenants, and without social welfare tenants. Sort of a fire and forget approach.

He doesnt even have to spring for furniture, decoration, repairs, white goods or anything like that. Its all in the 20% he gives up. I assume the 20% covers this and a profit for the company.

At the time, I was talking to him the rent was €800PM and he got €600PM. I think when he started the rent was €600 and he was getting €450. He probably gets more now that rents are going up too.

When i see him again i'll ask for more detail.

Cuddlesworth

Calipo79 wrote: »

We are in the lucky position of almost having secured approval for an investment property - hoping to get either a 2 bed apart or a 3 bed house. We are thinking of buying in Maynooth, Kilcock or Celbridge and renting the house out. We haven't really done a hugh amount of research on this as yet and are only starting to do proper research now. Obviously we are looking at cost of property and rental yield but I'm conscious we need to also take the following into account : tax on rent, cost of furniture, cost of solicitors, property tax etc

Any thoughts on whether this would be a good investment and what else should we look into? Also any guidelines on tax on rent and other costs would be appreciated

Good luck. Only two pieces of advise I would give you is to factor in the riskof earnings lost. You could end up with a 30k 1 year deficit(1 year rent lost and damages) if you end up with bad tenants. Due diligence can mitigate this risk but it can happen with any type of tenant. In slower markets(since this is a long term investment), rents can go down as well as up and the property could lie empty for extended periods between lets.

And factor in the possibility the value of the house could tank in value, locking you into a arrangement that you no longer want a significant part in. Some tenants can be extremely taxing for some landlords.