Becoming a landlord

allibastor

Would anyone recommend to become a landlord?

I find myself in a position to buy a house or two in areas I wouldnt live myself, but have massive rental potential.

Is it worth the hassle?

Michael D Not Higgins

No, is my short answer. There's better ways to invest your money and you can invest in REITs if you want to get your money in property.

Shelflife

NO !!

Its a pain in the arse even when things are running smoothly. The returns IMO are poor in relation to the risks involved.

allibastor

allibastor wrote: »

.........

Is it worth the hassle?

Depends on your luck with tenants.

I've a property rented out since 2006, haven't stepped foot in the place since, consistently rented out with no issue.

If I hadn't paid over the odds for it the situation would be a dream, even considering I bought in the boom it's working out quite well as conceptually what I paid for it was acceptable to me at the time and I didn't have the benefit of a crystal ball.

You can buy a property now for €150k that can be rented for €10k/annum.
Realistically over 10/20 years will the property drop in value from now? Personally I don't think so.

there might be better "investments" but if you don't encounter nightmare tenants I don't think property buy to let is too bad a proposition at the moment.

castle2012

I just got out of it . Lucky escape . My tenants payed me when it suited them . Example payed me for December in January. There excuse was they had a great Christmas and ran a bit short on cash. Like I could tell the bank that . Also when I sold the house this year they stole the table and chairs from the house . I would run a mile . There is much easyer ways of making money . The government treat landlord s like the a charity organization

allibastor

The house I am looking at for the price it is going for would be re-couped within 11 years of rental.

I know some who argue both sides of the coin, but just thought I would own the house or 2 within the next 15 years outright with all investment paid back.

athtrasna

allibastor wrote: »

The house I am looking at for the price it is going for would be re-couped within 11 years of rental.

I know some who argue both sides of the coin, but just thought I would own the house or 2 within the next 15 years outright with all investment paid back.

Allowing for tax? Maintenance? Non paying tenants? Damage caused by tenants?

Another former landlord here. Run a mile

mickoneill31

allibastor wrote: »

Would anyone recommend to become a landlord?

I find myself in a position to buy a house or two in areas I wouldnt live myself, but have massive rental potential.

Is it worth the hassle?

Pop out Excel (or your spreadsheet of choice).

Put in all of your expenses in running a property. e.g. insurance, maintenance etc.
With a spreadsheet you can put in scenarios of assuming the property is rented out for 3 months, half a year or all year.
Don't forget the taxes & allowances.
e.g. depreciation on furniture, tax relief on mortgage interest (if you have any) and USC, PRSI charges.

Once all that data is in you can see easily how much you'll be making in different scenarios.

I was in a position similar to you last year. When I did all of that, I gave up on the idea. If everything goes well the return (for me) was small. If I got a crappy tenant it'd blow any profit out of the water.

MarkAnthony

allibastor wrote: »

I find myself in a position to buy a house or two in areas I wouldnt live myself, but have massive rental potential.

This is (potentially) pretty telling. Let's assume you don't mean it's a bit rural for you or the property is too small. What else would you be willing to have your tenants put up with that you wouldn't? A poor state or repair? Bad neighbours? Lack of amenities?

You've already seemed to indicate given your 11 year prediction on paying off the entire cost of the property that you're unlikely to invest in bringing and keeping it to a good standard. Landlords frequently get the tenants they deserve.

Either you genuinely have found fantastic areas for investment that have been over looked by people that don't use boards.ie as a primary research tool or something has gone amiss in your business plan. You really need to think long and hard on whether you're suited to providing a service, of the most personal kind, to people or would you be better off with a more hard nosed investment opportunity?

NIMAN

I became an accidental landlord back in 2010.

I ended up with a guy I knew as my tenant and he was no bother at all. He never complained and decorated etc at his own cost.

But I still sold up a couple of years later, I was glad to get rid of it tbh. Nothing to worry about and having to add money to rent to make the mortgage repayments and then a tax return every year as well.

Just not worth the hassle imho.

jimmii

It's a lot harder and more expensive that most people think especially if you believe some of the things they write in the papers!

It's a pain in the arse unless you find a bullet proof property and a perfect Tennant!

lima

Most landlords on here seem to have had issues, they are always going on about them

I'm sure there are many many people who have had no hassle at all

Nothing is for free so a little bit of effort to maintain an asset that you can eventually pay off seems like a good idea if you can, as long as you do a bit of homework

Go for it, and good luck

NIMAN

Even with a great tenant, like I had, I was never guaranteed he would stay long term. That was my greatest fear.

Plus add to this, I now don't need to worry about water tanks bursting, roof coming off in storms, break-ins, fires etc etc. Well not in 2 properties anyway.

Barely Hedged

athtrasna wrote: »

Allowing for tax? Maintenance? Non paying tenants? Damage caused by tenants?

Another former landlord here. Run a mile

Where was the property?

athtrasna

Barely Hedged wrote: »

Where was the property?

Can't see how that's relevant in any way. I was asking the OP questions based on their assertion that eleven years of renting would clear the purchase debts

Barely Hedged

athtrasna wrote: »

Can't see how that's relevant in any way. I was asking the OP questions based on their assertion that eleven years of renting would clear the purchase debts

Were talking about property and location isn't important?

lcwill

Depends on your personal situation - your profits and the risk you are exposing yourself to are determined by many different things which vary from person to person: your marginal tax rate, how big a deposit you can put down, your ability to self manage and do all repairs or if you need to pay an agent, what share of your net worth is going to be tied up in an illiquid asset, how big an emergency fund you can set aside, the likelihood of needing to sell within the next 10 years etc.

Don't rush into it. Educate yourself, think about the alternatives that are out there, and what your long term goals are, listen to the Property Podcast, then make an informed decision based on your own evaluation of wheter property is a suitable investment for you.

Some people have gotten very wealthy through property investment, some have lost everything. Only part of this is down to bad luck with tenants, and I would say that most of it is down to how well they thought it through before buying, the systems they put in place to deal with the risks, and whether property investment was part of a coherent plan for their own lives and their own money.

athtrasna

Barely Hedged wrote: »

Were talking about property and location isn't important?

You asked about my property though. Not the OP's

filbert the fox

allibastor wrote: »

The house I am looking at for the price it is going for would be re-couped within 11 years of rental.

I know some who argue both sides of the coin, but just thought I would own the house or 2 within the next 15 years outright with all investment paid back.

With respect, there are no certainties in this game. The current form is for the powers that be to interfere in the market. Landlords have been dumped on with Property tax (which is supposed to pay for local services the landlord will never use), USC, Prsi, Prtb, reduced rate of interest allowance, more stringent standards , etc. Now there's talk of Rent fixing.

I sincerely hope that you realise the implications, for example - if you need to buy a washing machine and a suite of furniture you won't be able to recoup your entire outlay for 9 years.
You will probably pay 52% tax on "profits".

If I had the deposit to afford two properties I'd have a much longer think about it.... in New Zealand with a couple of beers and some chilli prawns....

jared_pain

contrary to public opinion , tenants have terrific protection in this country , its extremely difficult to evict someone who is wrecking the place , let alone not paying you any rent

on paper , it still looks like a good return , especially in places like limerick where housing is still so cheap despite a large population

jared_pain

it nearly always makes no sense to borrow to buy a BTL , id only ever buy with cash as property doesnt rise in value over the long term as much as stocks and is a lot more expensive to maintain

if you getting less than 6% after paying your mortgage , you would be better investing in stocks which pay 5% dividend per anum , those giant companies are likely to appreciate more in twenty years than your apartment

gordongekko

No mention of taxation once in this thread yet. Run a mile. I'd you do things by the book all you are doing is working for your tenants and Michael Noonan.

mickoneill31

gordongekko wrote: »

No mention of taxation once in this thread yet. Run a mile. I'd you do things by the book all you are doing is working for your tenants and Michael Noonan.

Yeah there was. In my post. You're right though about who the landlord is working for.
All the tinkering that Alan Kelly is doing these days isn't going to change the fact that 52% of any profit is going straight to the government. Like any business I suppose. But if you add up LPT, insurance, maintenance, taxes then the risks from bad or non paying tenants it's no wonder smaller landlords are getting out of it.

vagazzled

I could buy a 3 bed house in a certain estate 2 miles from me- it's a council estate- for 99k. (as cash buyer)
Rent it out @ 1k x 12. "Sure i'd make it back in 8 yrs 3 months!" Not really , as I'd have to pay 50/52% tax on my 1k so double that time frame.Also, as others have said, your other costs as a LL and LL insurance.
The estate is known locally for a few murders over the last few years, shootings, drug dealing, and 'outsiders' being run out of the place- their children being picked on, their windows broken, cars stolen. Somewhere I wouldn't live myself. It's a pity that a few families can ruin an estate for everyone.
If it's somewhere you wouldn't live yourself, you might find your tenants get sick of it also for whatever reason (rural, rough etc) and up and leave, leaving you with the cost of an empty property plus redecorating and re-letting costs and HASSLE.
Not to mention the overhanging dread of over-holders - both working and RA.

filbert the fox

filbert the fox wrote: »

I sincerely hope that you realise the implications, for example - if you need to buy a washing machine and a suite of furniture you won't be able to recoup your entire outlay for 9 years.
You will probably pay 52% tax on "profits".

The cost of the washing machine can be deducted from your tax bill, it will cost you nothing if you are paying tax on your rental income.

filbert the fox wrote: »

If I had the deposit to afford two properties I'd have a much longer think about it.... in New Zealand with a couple of beers and some chilli prawns....

Personally I'd rather buy and manage a few properties than go anywhere near New Zealand or anywhere else for that matter. What a total waste of money that would be.

Personally I would very much favour buying property to let as a means of investing than shares or long term bonds etc. Especially with the terrible savings interest rates at the moment. It's always something you can run yourself and maximise your profits and there is more of a guatenteed return from renting out property than shares imo. You are getting a return every month also rather than sitting for years with shares or bonds. If I had/have the money in futue property would be my first port of call in desirable locations where profits can be maximised.

Renting to students is another option, guratened rent every year, place doesn't have to be kept to a high standard and you can set the rent fairly high and you will get it.

Michael D Not Higgins

gordongekko wrote: »

No mention of taxation once in this thread yet. Run a mile. I'd you do things by the book all you are doing is working for your tenants and Michael Noonan.

5 posts above yours mention tax.

filbert the fox

Heath Clean Misfortune wrote: »

The cost of the washing machine can be deducted from your tax bill, it will cost you nothing if you are paying tax on your rental income.

I didn't claim otherwise. All I said was that the rules require that you claim it back at 12.5% per annum.

Heath Clean Misfortune wrote: »

Personally I'd rather buy and manage a few properties than go anywhere near New Zealand or anywhere else for that matter. What a total waste of money that would be.


You must be anti-antipodoean. And anti travel too. The OP must have about €48,000 to get a mortgage for more than one property. One tenth of that will get a very nice month in the Southern Hemisphere with plenty of frills. Just to take the air and contemplate the advice on here.;)

filbert the fox

filbert the fox wrote: »

You must be anti-antipodoean. And anti travel too. The OP must have about €48,000 to get a mortgage for more than one property. One tenth of that will get a very nice month in the Southern Hemisphere with plenty of frills. Just to take the air and contemplate the advice on here.;)

I've no interest in travel really, particularly to the Southern Hemisphere. I've to be forced to go to Spain for a weeks holiday (and even that I try to get out of) never mind going further for longer.

I'd see spending a cent of that 48k travelling as a waste.

lima

OP could buy then move to NZ and rent them out, he'd only be paying 20% tax on the rent then

ianobrien

OP, I was contemplating something similar to you two years ago, when I moved for work. I had a property in a suburb of Cork, near the two universities, hospital, etc and in a perfect location for renting. After doing the sums and allowing for a few months where I was getting no rent & reasonable damage tenants do (I had family members who were landlords before so I knew what could happen), I left the property empty rather than renting. It worked out cheaper and easier to leave it empty rather than renting. It's all changed now, as I sold up.

NIMAN

I know a few folk renting out properties too for cash, and with that then I am sure being a landlord is a great job. No tax to pay.

However it also brings its own issues, like a huge bill and fines if Revenue ever discover it, and nothing like a p1ssed off tenant to grass you up. Also, if a dispute starts between you and your tenant, then there will be little comebak as you can't really approach any authorities if you weren't declarig the income you were getting.

As I have said before, I wouldn't do it. If I had enough to buy 1 or 2 houses for cash, I'd find somewhere else to invest my money than becoming a landlord.

ianobrien

ianobrien wrote: »

I left the property empty rather than renting. It worked out cheaper and easier to leave it empty rather than renting.

There is no way on earth it was cheaper not to rent it. Even paying tax at 51% on every cent you make from it it's still 49% more than leaving it idle. Even with repairs etc (which can all be off set against tax remember) there is no way it was better financially not to rent it out.

ianobrien

Heath Clean Misfortune wrote: »

There is no way on earth it was cheaper not to rent it. Even paying tax at 51% on every cent you make from it it's still 49% more than leaving it idle. Even with repairs etc (which can all be off set against tax remember) there is no way it was better financially not to rent it out.

Well, it was, allowing for furniture (I had bedromm 3 as a home office), carpets (I had cream ones and they wouldn't last pi$$ing time), loss of two months rent a year (based on past experience) and other initial costs. The break even point for clearing initial set up costs was a few years. Another cost was cleaning and maintenance. As I would not be local, I would have to pay others to do it, further eating into income.

Family members were landlords for years (having gotten out of it five years ago) so I based my costings for damage/maintenance off their figures.

ianobrien

ianobrien wrote: »

Well, it was, allowing for furniture (I had bedromm 3 as a home office), carpets (I had cream ones and they wouldn't last pi$$ing time), loss of two months rent a year (based on past experience) and other initial costs. The break even point for clearing initial set up costs was a few years. Another cost was cleaning and maintenance. As I would not be local, I would have to pay others to do it, further eating into income.

Family members were landlords for years (having gotten out of it five years ago) so I based my costings for damage/maintenance off their figures.

Fair enough but I still don't believe your figures are accurate or you were willing to put far too much into setup costs etc. The absolute minimum is all that's needed. I'd be shocked if a place was vacant for a week never mind two months and get good tenants so damage and repairs aren't an issue.

I'd have let the house exactly as it was, no set up costs required.

Tarzana2

Heath Clean Misfortune wrote: »

The cost of the washing machine can be deducted from your tax bill, it will cost you nothing if you are paying tax on your rental income.

Not true.

Say your rental income for the year is €10,000. You buy a washing machine for, say, €400.

If you didn't subtract the €400 from the income, your tax bill would be:

€10,000 x .51 = €5,100

If you did subtract the €400 from the income, your tax bill would be

€9,600 x .51 = €4,896

Difference: €204, so you don't get appliances for free via deduction from income.

ballyharpat

I came on here a few years ago asking for advice/experiences regarding renting…… I received practically the same responses as the op…. I bought anyway, then I bought bother, and another, 3 rental properties later, and I am making a good income. I charge below market rent, I fix things as soon as they break-so I avoid large repair bills. I accept rent allowance-meaning, yes-I'm tax compliant.

The hardest thing for me, is having to pick up the rent every two weeks, )

Go for it op, if you are half capable of doing anything, you are cable of being a responsible landlord that can turn a profit-in the right area.

hytrogen

Looking at the market prices the last while & the mood of most landlords & contributors here I'd say hold off until the next crash happens. Meanwhile rent a room out of your own home & see if you get the buzz for it then..

ianobrien

ianobrien wrote: »

Family members were landlords for years (having gotten out of it five years ago) so I based my costings for damage/maintenance off their figures.

Just to add to this in over 6 years renting in 3 different places if I added up the repair and maintenance of bill for all three LL's while I've been in the house it would barely come to
1000 euro. Nothing really in the grand scheme so you severely exaggerate how much you might have spent in repairs etc.

hytrogen wrote: »

Looking at the market prices the last while & the mood of most landlords & contributors here I'd say hold off until the next crash happens. Meanwhile rent a room out of your own home & see if you get the buzz for it then..

In fairness there is no comparison with renting a room in your house. Having someone living in your house is a much bigger deal on your life and day to day living than having people you might not see from one end of the year to the next living in a house you rent out.

Electric Sheep

Heath Clean Misfortune wrote: »

Just to add to this in over 6 years renting in 3 different places if I added up the repair and maintenance of bill for all three LL's while I've been in the house it would barely come to
1000 euro. Nothing really in the grand scheme so you severely exaggerate how much you might have spent in repairs etc.

Could you just picture the house Nox would be renting out? 4th hand everything, and him telling you that you are lucky to get it...

Electric Sheep

Electric Sheep wrote: »

Could you just picture the house Nox would be renting out? 4th hand everything, and him telling you that you are lucky to get it...

4th hand everything?

I'm talking about houses I've been renting in and the only significant expense any of my LL's have had is to replace an electric shower and that's in 6 years.

Other than that a leaky tap or two, a replacement blind and a washing machine repair (replace a seal) are about it in over 6 years.

There is no need to spend heaps of money preparing a house for letting. Most likely most stuff will be there already and anything that's needed can be replaced with something cheap but fit for purpose.

grass_grower

Heath Clean Misfortune wrote: »

The cost of the washing machine can be deducted from your tax bill, it will cost you nothing if you are paying tax on your rental income.



Personally I'd rather buy and manage a few properties than go anywhere near New Zealand or anywhere else for that matter. What a total waste of money that would be.

Personally I would very much favour buying property to let as a means of investing than shares or long term bonds etc. Especially with the terrible savings interest rates at the moment. It's always something you can run yourself and maximise your profits and there is more of a guatenteed return from renting out property than shares imo. You are getting a return every month also rather than sitting for years with shares or bonds. If I had/have the money in futue property would be my first port of call in desirable locations where profits can be maximised.

Renting to students is another option, guratened rent every year, place doesn't have to be kept to a high standard and you can set the rent fairly high and you will get it.

there is a lot less guarentee of returns from a BTL than a high yielding dividend stock , vodafone , shell , bp , are unlikely to decide not to pay you one quater , your tenant might

not saying buy to lets are not an attractive investment , they are in many places still in this country but the risk is higher than in stocks as its a much less liquid asset

filbert the fox

NIMAN wrote: »

I know a few folk renting out properties too for cash, and with that then I am sure being a landlord is a great job. No tax to pay.

However it also brings its own issues, like a huge bill and fines if Revenue ever discover it, and nothing like a p1ssed off tenant to grass you up. Also, if a dispute starts between you and your tenant, then there will be little comebak as you can't really approach any authorities if you weren't declarig the income you were getting.

WTF?

Grass you up? Hello? where do you thing the money comes from to provide the infrastructure for services in this country?

Huge bills and fines are for people who don't do their civic duty as a punishment.....

allibastor

Just in response to a question posed earlier. I would live in the houses I am looking at, but they are in a different county than where I live now.

Not going to happen now anyway, the agency selling the house has been told to remove them from the market due to bank sale.

NIMAN

filbert the fox wrote: »

WTF?

Grass you up? Hello? where do you thing the money comes from to provide the infrastructure for services in this country?

Huge bills and fines are for people who don't do their civic duty as a punishment.....

I wasn't condoning anything, I was a full tax compliant LL myself.

hytrogen

Heath Clean Misfortune wrote: »

" Renting to students is another option, guratened rent every year, place doesn't have to be kept to a high standard and you can set the rent fairly high and you will get it. "


In fairness there is no comparison with renting a room in your house. Having someone living in your house is a much bigger deal on your life and day to day living than having people you might not see from one end of the year to the next living in a house you rent out.

Please explain to us all what the difference is to a lodger as opposed to a student renting a roomin a home since clearly my previous point was negated??

hytrogen

hytrogen wrote: »

Please explain to us all what the difference is to a lodger as opposed to a student renting a roomin a home since clearly my previous point was negated??

In was referring to renting a full house to a group of students not comparing taking in one student as a lodger compared to taking in a non-student as a lodger.

The point is that renting a room in your home means giving up your privacy, part of your home etc while renting a full property you need not see the people you are renting to from one end of the year to the next. Of course renting a room/rooms has the massive advantage of being tax free (up to 12k) and you can kick people out and not worry about the PRTB etc.

allibastor

Glad I didnt follow through after reading a lot of the posts on this thread

Barely Hedged

athtrasna wrote: »

You asked about my property though. Not the OP's

Yes because you mentioned non paying tenants and damages. Certain locations attract differing quality of tenants which can have a huge/no impact on these variables.

In stating the location you can allow the original poster the ability to compare what you're experience was relative to what they might encounter. It's not a trivial point

penana

Heath Clean Misfortune wrote: »

Renting to students is another option, guratened rent every year, place doesn't have to be kept to a high standard and you can set the rent fairly high and you will get it.

Is that the way you'd like your student children treated? A home that's not to a high standard, at a fairly high rent?

Shame on you! :mad:

lima

penana wrote: »

Is that the way you'd like your student children treated? A home that's not to a high standard, at a fairly high rent?

Shame on you! :mad:

That's just the way miser, tightar*ed Irish landlords think and feel they are entitled to offer

penana

penana wrote: »

Is that the way you'd like your student children treated? A home that's not to a high standard, at a fairly high rent?

Shame on you! :mad:

lima wrote: »

That's just the way miser, tightar*ed Irish landlords think and feel they are entitled to offer

Only a fool would pump money into a place that's going to be rented to students. I'm not saying it would be a shed, obviously it would be maintained to a safe standard etc but pumping money into expensive furniture, high quality flooring or other fixtures and fittings or high quality appliances only for them to be most likely damaged or broken.

Also nobody would be forced to live in the house either so if you weren't happy with it don't move in.

I never lived in rented accommodation as a student I lived at home but I saw from friends living in places rented to students they were mostly perfectly fine and livable but not up to the standard a professional would want.