Letting an apartment

john1963

hi folks,
I have just purchased an apartment in santry as an investment property. I am wondering am I better to use letting/management agent to let it or should I do it myself?....I don't want lots of hassle but would like it to self finance
thanks

cruizer101

Not to sound harsh but considering you bought the property specifically as an investment to rent out would you not have looked into what your options were, advantages and disadvantages of both, before buying.

john1963

either option would not stop me buying. I am just looking for people's experiences

MarkAnthony

john1963 wrote: »

hi folks,
I have just purchased an apartment in santry as an investment property. I am wondering am I better to use letting/management agent to let it or should I do it myself?....I don't want lots of hassle but would like it to self finance
thanks

Renting out places is hassle. It just depends if you want to spend about 5 - 10 hours doing viewing, vettings and ads yourself or want to spend upwards of €500 getting someone else to do it.

You can then hand over 10% of the rent to have an agent field phone calls or again do it yourself. I chose to do it myself, the only disadvantage is people can somethimes be more comfortable with an agent.

I don't want to sound harsh but why did you buy a in a declining market? How on earth have you not done the maths to see if it will self finance or not? I'd get some proper advice if I were you, it will pay for itself many times over.

john1963

MarkAnthony wrote: »

Renting out places is hassle. It just depends if you want to spend about 5 - 10 hours doing viewing, vettings and ads yourself or want to spend upwards of €500 getting someone else to do it.

You can then hand over 10% of the rent to have an agent field phone calls or again do it yourself. I chose to do it myself, the only disadvantage is people can somethimes be more comfortable with an agent.

I don't want to sound harsh but why did you buy a in a declining market? How on earth have you not done the maths to see if it will self finance or not? I'd get some proper advice if I were you, it will pay for itself many times over.

why do you think its a declining market. I bought for cash (have only paid booking deposit so far) I will get a 3 % return rather than nearly nothing on deposit......the apartment was 180k...I estimate it will give me an income of 500 euro most months and in 20 years I am sure it will have increased in value.

MarkAnthony

john1963 wrote: »

why do you think its a declining market. I bought for cash (have only paid booking deposit so far) I will get a 3 % return rather than nearly nothing on deposit......the apartment was 180k...I estimate it will give me an income of 500 euro most months and in 20 years I am sure it will have increased in value.

Dublin is stagnant with apartments declining from the headline stats.

180K in Santry is what a 2 bed? 1200 a month rent?

Assuming you've a fairly good job to have €180K sitting about, less 53% tax leave you with around €600 a month, or €7200 a year. One set of tenants trashing the place taking you a year to get out will run you about €20K. Hopefully everything goes swimmingly you're making around your 3% projection, I make it 4% actually.

Maybe I'm worng but a manged investment portfolio should make quite a bit more than that with significantly less risk. Perhaps the lads/lasses in investments and pensions have done the maths.

If you're only at booking deposit stage you've every reason to get proper advice before commiting yourself.

john1963

MarkAnthony wrote: »

Dublin is stagnant with apartments declining from the headline stats.

180K in Santry is what a 2 bed? 1200 a month rent?

Assuming you've a fairly good job to have €180K sitting about, less 53% tax leave you with around €600 a month, or €7200 a year. One set of tenants trashing the place taking you a year to get out will run you about €20K. Hopefully everything goes swimmingly you're making around your 3% projection, I make it 4% actually.

Maybe I'm worng but a manged investment portfolio should make quite a bit more than that with significantly less risk. Perhaps the lads/lasses in investments and pensions have done the maths.

If you're only at booking deposit stage you've every reason to get proper advice before commiting yourself.

well its approx. 3% allowing for management fees and property tax. in terms of a managed fund its hard to get advice....you could lose the lot. Not having borrowed I can take my time and try to get good tenants but there is always a risk . in years to come my kids can have the apartment. the apartment itself was 360k new. I would never expect it to reach that again but in the long term it should increase somewhat. i have another house rented out and the tenants are great. rent on time, never complain and the house is spotless. I suppose I do think maybe I am mad to buy but interest rates are so low...maybe 0% soon or even into the minus

MarkAnthony

Look after it yourself op spending money on an agent and losing control of who rents the place is not a good idea imo.

MarkAnthony wrote: »

Renting out places is hassle. It just depends if you want to spend about 5 - 10 hours doing viewing, vettings and ads yourself

Some may see it as hassle others might see it as a bit of evening work. I quite like the idea of managing a property or two on the side along with my day job.

john1963

Lindsey Prehistoric Viewpoint wrote: »

Look after it yourself op spending money on an agent and losing control of who rents the place is not a good idea imo.



Some may see it as hassle others might see it as a bit of evening work. I quite like the idea of managing a property or two on the side along with my day job.

yes I might do that... thanks

MarkAnthony

Lindsey Prehistoric Viewpoint wrote: »

Some may see it as hassle others might see it as a bit of evening work. I quite like the idea of managing a property or two on the side along with my day job.

Quite, I keep chickens, doesn't save me any money, but then my chickens aren't likely to cost me thousands and potentially land me in arbitration hearings.

As with any hobby, be aware of the risks.

john1963

MarkAnthony wrote: »

Quite, I keep chickens, doesn't save me any money, but then my chickens aren't likely to cost me thousands and potentially land me in arbitration hearings.

As with any hobby, be aware of the risks.

did you have difficulties with tenants??

MarkAnthony

john1963 wrote: »

did you have difficulties with tenants??

I've been lucky, but been hanging around here for a while, poor sods!

Having said that returning to your original question I do it myself and even the slightest twinge in my gut and it's a no.

john1963

MarkAnthony wrote: »

I've been lucky, but been hanging around here for a while, poor sods!
don't understand... whose has been hanging around here?

Having said that returning to your original question I do it myself and even the slightest twinge in my gut and it's a no.

yes I agree 100% who has been hanging around? your tenants?

filbert the fox

john1963 wrote: »

hi folks,
I have just purchased an apartment in santry as an investment property. I am wondering am I better to use letting/management agent to let it or should I do it myself?....I don't want lots of hassle but would like it to self finance
thanks

First get some paper quotes from property agents - just watch out for the small print. If they get you suitable tenants then pay them a once off fee and get registered with the PRTB.

MarkAnthony

john1963 wrote: »

yes I agree 100% who has been hanging around? your tenants?

I've been hanging around this forum and seen a few horror stories.

People crapping into black plastic bags was a particualr 'favourite'.

lima

Why are some people on here so negative to people who are looking at getting into letting out their apartments?

Good on you OP for buying and best of luck mate

It's not that much effort managing really.

The apartment market is Dublin is not declining. I have recently purchased and another apt is on sale now in the same place for 50k more. There are no apts being built and soon it's going to be all that young people can afford.

I'd gladly pay 10-15% of the rent received to pay an agent to look after my place. That way you don't need to worry that much about it.

john1963

lima wrote: »

Why are some people on here so negative to people who are looking at getting into letting out their apartments?

Good on you OP for buying and best of luck mate

It's not that much effort managing really.

The apartment market is Dublin is not declining. I have recently purchased and another apt is on sale now in the same place for 50k more. There are no apts being built and soon it's going to be all that young people can afford.

I'd gladly pay 10-15% of the rent received to pay an agent to look after my place. That way you don't need to worry that much about it.

thanks for that. I agree. the apartment I bought is 50% of the price it was new. I don't need to resell until I want to so there is a chance of capital appreciation as well as rental income. yes the idea of an agent is attractive

MarkAnthony

lima wrote: »

Why are some people on here so negative to people who are looking at getting into letting out their apartments?

Good on you OP for buying and best of luck mate

It's not that much effort managing really.

The apartment market is Dublin is not declining. I have recently purchased and another apt is on sale now in the same place for 50k more. There are no apts being built and soon it's going to be all that young people can afford.

I'd gladly pay 10-15% of the rent received to pay an agent to look after my place. That way you don't need to worry that much about it.

Unless you're in a luxary penthouse in Ballsbridge thats a text book bubble.

As for 10-15% in fees, if it's no hassle why pay someone 10%-15% of the rent?

People are down on it becuase this is the exact mess we got ourselves into last time. The only way is not up, as long as you go into it with your eyes open have at it, it's our/the OP's money. For goodness sake though don't think it's some licence to print money with no effort, it's not.

MarkAnthony

The last three months in Dublin according to the CSO have been flat. 0.0, +0.4, -0.4 with last month down.

All indicators in Dublin are of a declining market at the moment, with supply forcing down prices.

People will not waste they're 'First time buyer' deposit break on an apartment in general, which is why rents are bouyant.

lima

MarkAnthony wrote: »

The last three months in Dublin according to the CSO have been flat. 0.0, +0.4, -0.4 with last month down.

All indicators in Dublin are of a declining market at the moment, with supply forcing down prices.

People will not waste they're 'First time buyer' deposit break on an apartment in general, which is why rents are bouyant.

Actually, in my case I am an FTB and I now pay e850 on a mortgage instead of e1500 on equivalent rent. I got a good deal as it was worth more than double in the boom.

Rents are high because there is a lack of available rental properties.

There are a lack of rental properties because there is a lack of properties to buy.

Property prices are rising because there is more competition to buy from the small pool of available properties.

Apartment prices are up 5% this year.

filbert the fox

There are a lack of rental properties because there is a lack of properties to buy.

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Among other things e.g. the prohibitive nature of the taxation system whereby landlords are effectively paying half their rent in tax.

john1963

There is a risk with every investment. If I get rental return of 3% its far better than leaving it in the bank. If prices drop in the future I can buy another one and split the difference.....

zac8

3% on an apartment in Santry is a woeful return.

john1963

Cost 180k. Rent 1200. Less tax etc is about 500 per month so slightly over 3 %....I would love a higher return. Any suggestions?

dubrov

Tax isn't 100% of profits.

I assume you mean roughly half price for a tax compliant landlord

athtrasna

dubrov wrote: »

Tax isn't 100% of profits.

I assume you mean roughly half price for a tax compliant landlord

No I don't. If the LL's tax bill before deductions is 6k for example, that bill is reduced by allowable deductions, bringing down the total tax due. Letting costs are deductible in full, reducing the tax bill.

dubrov

john1963 wrote: »

Cost 180k. Rent 1200. Less tax etc is about 500 per month so slightly over 3 %....I would love a higher return. Any suggestions?

The problem is everyone is thinking the same right now. Look across Europe and property (and all assets in general) has soared due to low interest rates and a recession.

Eventually economies will start moving again, other opportunities to invest will arise and interest rates will increase. The money will leave assets and go into other things.

dubrov

athtrasna wrote: »

No I don't. If the LL's tax bill before deductions is 6k for example, that bill is reduced by allowable deductions, bringing down the total tax due. Letting costs are deductible in full, reducing the tax bill.

I am pretty sure you make the deductions before tax.

E.g. Income is 10,000
Less deductions (including Letting agent fees, interest etc.) leaves say 6,000.
You pay tax on this.
So if letting agent fees were 1,000 and you did the work yourself, taxable income would be 7,000.
The difference in net income would be the tax paid on the additional 1,000.

Otherwise, it would be a farce and letting agents would be millionaires

athtrasna

dubrov wrote: »

I am pretty sure you make the deductions before tax.

E.g. Income is 10,000
Less deductions (including Letting agent fees, interest etc.) leaves say 6,000.
You pay tax on this.
So if letting agent fees were 1,000 and you did the work yourself, taxable income would be 7,000.
The difference in net income would be the tax paid on the additional 1,000.

Otherwise, it would be a farce and letting agents would be millionaires

You may be right, back in my LL days I paid an accountant to sort my returns - also tax deductible

MarkAnthony

lima wrote: »

Actually, in my case I am an FTB and I now pay e850 on a mortgage instead of e1500 on equivalent rent. I got a good deal as it was worth more than double in the boom.

Rents are high because there is a lack of available rental properties.

There are a lack of rental properties because there is a lack of properties to buy.

Property prices are rising because there is more competition to buy from the small pool of available properties.

Apartment prices are up 5% this year.

And they were up a ridiculous amount the previous year, we all knew it was a sharp correction / potential bubble. The market this year is turning because of the new CB rules. I'm not predicting a massive crash but apartments will reduce this year.

You bought before the New CB rules Lima, your sale was, how do we put this, well documented here

zac8 wrote: »

3% on an apartment in Santry is a woeful return.

To be fair OP is calculating that NET. Not that I'm suggesting this is a sound investment
I got a slap for that suggestion on tax deductions but I think someone has clarified it lower down so suffice it to say it's not free, just substantially reduced. Fact remains though why pay someone any money if what you want to do i manage a property.

newacc2015

john1963 wrote: »

Cost 180k. Rent 1200. Less tax etc is about 500 per month so slightly over 3 %....I would love a higher return. Any suggestions?

Rent of €1200 is far too cheap. I would be thinking closer to €1400-1500 depending on condition and furnishing. Go to Ikea and furnished with their mid range products. Paint it modern colours eg Grey and not magnolia

athtrasna

newacc2015 wrote: »

Rent of €1200 is far too cheap. I would be thinking closer to €1400-1500 depending on condition and furnishing.

Location is an issue that brings it down slightly, not exactly central. €1200 is a median rent looking at the 2 bed apartments available on Daft in Santry at the moment. They go from 1050-1400

Fol20

john1963 wrote: »

hi folks,
I have just purchased an apartment in santry as an investment property. I am wondering am I better to use letting/management agent to let it or should I do it myself?....I don't want lots of hassle but would like it to self finance
thanks

As you only have one rental property, i would use management agency to manage your property. Although they will charge about 10pc and any work that needs to be done will be higher when using them, for the hassle and convenience when its only one property, its a no brainer.. plus everything they charge you is expansible so either way it will knock off a bit your tax bill.

lima

MarkAnthony wrote: »

And they were up a ridiculous amount the previous year, we all knew it was a sharp correction / potential bubble. The market this year is turning because of the new CB rules. I'm not predicting a massive crash but apartments will reduce this year.

You bought before the New CB rules Lima, your sale was, how do we put this, well documented here

To be fair apt prices have shot up in the cite centre and southside, I agree there is a serious bubble there. Look at how much they are in for e.g Milltown, e450k for a 2br is insane. These will surely go down in value but there are places where apts are still going for 250k - nice places on the northside - these will probably go up

Your account has only been on here for 8 months or so - who were you before

MarkAnthony

lima wrote: »

To be fair apt prices have shot up in the cite centre and southside, I agree there is a serious bubble there. Look at how much they are in for e.g Milltown, e450k for a 2br is insane. These will surely go down in value but there are places where apts are still going for 250k - nice places on the northside - these will probably go up

Your account has only been on here for 8 months or so - who were you before

A couple of people at this stage. The addiction is strong.

john1963

Its all a risk....I bought a house in cavan in 1998 for 46000 punts....sold it in 2008 for 173000 euro.....it was for sale a few months ago for 75k and didn't sell. Highest offer was 62k. Who knows where we are in the cycle now....but 180k for a 2 bed in santry seems like a good deal to me.....but I might be wrong. I might be very wrong!!!

john1963

Its all a risk....I bought a house in cavan in 1998 for 46000 punts....sold it in 2008 for 173000 euro.....it was for sale a few months ago for 75k and didn't sell. Highest offer was 62k. Who knows where we are in the cycle now....but 180k for a 2 bed in santry seems like a good deal to me.....but I might be wrong. I might be very wrong!!!

lima

MarkAnthony wrote: »

A couple of people at this stage. The addiction is strong.

Don't let the addiction get to you lol

Barely Hedged

Tax deductible does not equal free. It means you only discount the same percentage as you're effective tax rate