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Buying 1 bedroom aparment for letting purposes- Ballymun or Tallaght Square?

  • 17-12-2019 9:51pm
    #1
    Banned (with Prison Access) Posts: 112 ✭✭ John1648


    Dear Board.ie contributors, here comes a kind request to you to critique such an investment idea:

    I am a cash buyer, looking at buying a first one of two/three properties in Dublin for letting purposes. I am looking at the lower end of the budget properties, which seem to me to produce a better yield.

    The calculation is like this: 1200-1300 EUR monthly rent, purchase price - 150 000 EUR.

    I am currently looking at 3 apartments in Ballymun (Linnbhla, and Shangan Hall) and Tallaght (Square area, 3 mins from LUAS), 1-bedroom, 40 - 50 sq.m., in pretty good shape, furnished.

    Would such rents be realistic, for these apartments? Would it be easy to find tenants in the current market?

    Would it too be risky, in the sense that these apartments risk to sit empty in the event of a recession?

    Many thanks!


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Comments

  • Registered Users Posts: 3,818 ✭✭✭ Darc19


    Tallaght (square) is far more developed and plenty of work locally esp in the hospital.

    Ballymun however has the airport, so plenty of demand in both areas.

    I think Tallaght slightly shades it as there's plenty of stuff on the doorstep.


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    Thank you for the views, much appreciated!

    Just to mention that I am a cash buyer, not requiring a mortgage, so am not affected by the interest aspects. Plus, I currently reside abroad (moved after the 2009 recession), so the withholding income tax is only 20%, and no PRSI tax either.

    My math would look like this, on the Irish rental income:

    1300 EUR monthy rent = 15 600 EUR yearly
    Minus allowable expenses= 1000 management fee; 1250 EUR the letting agency fees, insurance 250
    Minus local tax 250

    Net yearly income= 12, 850. This means no USC (as income lower than 13 000), and no PRSI tax. Gross tax = 2570. Minus tax credit of 1650= 920 EUR income tax.

    Net yearly income= 11 930 EUR. Which gives a net yield of 8%.

    So the only question is Tallaght Square or Ballymun?


  • Banned (with Prison Access) Posts: 1,625 ✭✭✭ Millionaire only not


    John1648 wrote: »
    Thank you for the views, much appreciated!

    Just to mention that I am a cash buyer, not requiring a mortgage, so am not affected by the interest aspects. Plus, I currently reside abroad (moved after the 2009 recession), so the withholding income tax is only 20%, and no PRSI tax either.

    My math would look like this, on the Irish rental income:

    1300 EUR monthy rent = 15 600 EUR yearly
    Minus allowable expenses= 1000 management fee; 1250 EUR the letting agency fees, insurance 250
    Minus local tax 250

    Net yearly income= 12, 850. This means no USC (as income lower than 13 000), and no PRSI tax. Gross tax = 2570. Minus tax credit of 1650= 920 EUR income tax.

    Net yearly income= 11 930 EUR. Which gives a net yield of 8%.

    So the only question is Tallaght Square or Ballymun?


    Only question is the headache, go invest ur money somewhere else and have a life!
    Why would u draw that grieve on urself for ?


  • Registered Users Posts: 17,961 ✭✭✭✭ Del2005


    Was either property rented before and what was the rent?


  • Registered Users Posts: 394 ✭✭ HcksawJimDuggan


    John1648 wrote: »
    Thank you for the views, much appreciated!

    Just to mention that I am a cash buyer, not requiring a mortgage, so am not affected by the interest aspects. Plus, I currently reside abroad (moved after the 2009 recession), so the withholding income tax is only 20%, and no PRSI tax either.

    My math would look like this, on the Irish rental income:

    1300 EUR monthy rent = 15 600 EUR yearly
    Minus allowable expenses= 1000 management fee; 1250 EUR the letting agency fees, insurance 250
    Minus local tax 250

    Net yearly income= 12, 850. This means no USC (as income lower than 13 000), and no PRSI tax. Gross tax = 2570. Minus tax credit of 1650= 920 EUR income tax.

    Net yearly income= 11 930 EUR. Which gives a net yield of 8%.

    So the only question is Tallaght Square or Ballymun?

    Two points to note on your tax calculation:
    - LPT is not allowed as a tax deductible expense
    - Non residents receive nil tax credits


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  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    Only question is the headache, go invest ur money somewhere else and have a life!
    Why would u draw that grieve on urself for ?

    I get the point about the headache...

    Alas, I need to work on the basis of options at hand. 8% yield, only achievable in Dublin...

    In a Paris suburb where I live now, I would get approx. 3 % - and do you know the French tax and bureaucratic system, as well as the crazy tenants protection laws?


    If I knew a place better that Dublin, I would choose to buy there...

    Sitting on 150 k EUR and doing nothing with it at all, also calls for some thinking on options...


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    Del2005 wrote: »
    Was either property rented before and what was the rent?

    Yes, they were rented. One for 1200, the others for 1085 and 1100. All are now up to a 4% increase


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    Two points to note on your tax calculation:
    - LPT is not allowed as a tax deductible expense
    - Non residents receive nil tax credits

    Yes, agree on LPT, did not deduct it.

    4 different tax advisers confirmed to me that Irish and other EU nationals are entitled to tax credit on their Irish sourced income. Pro rata of course to their non-Irish income, but this is fine, it is taken into account.

    Plus revenue.ie says the same on tax credit for non residents, on their website and in their Guide 45.01.01.

    I had doubts on this, but all say the same - tax credit is available.


  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,461 Mod ✭✭✭✭ pc7


    From Santry to Whitehall there are plans for 1000’s of apartments to be built, some underway, some at planning stage. The market may get saturated but Santry better address than Ballymun for renting if market does flood.


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    pc7 wrote: »
    From Santry to Whitehall there are plans for 1000’s of apartments to be built, some underway, some at planning stage. The market may get saturated but Santry better address than Ballymun for renting if market does flood.

    Ok, thank you!

    Are these 1000 / thousands built for renting out, buy-to-let, or just normal sales? I mean, they will not necessarily impact the rental market towards decreasing the prices.


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  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,461 Mod ✭✭✭✭ pc7


    John1648 wrote: »
    Ok, thank you!

    Are these 1000 / thousands built for renting out, buy-to-let, or just normal sales? I mean, they will not necessarily impact the rental market towards decreasing the prices.


    Well that's for you to do your homework, a friend showed me a link (think it was Social Democrats) highlighting all apartments in planning on going in area, it was pretty grim.


  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,461 Mod ✭✭✭✭ pc7


    They sent this on, this is the current in progress/planning for apartments in the area.


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    pc7 wrote: »
    Well that's for you to do your homework, a friend showed me a link (think it was Social Democrats) highlighting all apartments in planning on going in area, it was pretty grim.

    Thank you!

    This would speak then against Ballymun ...


  • Registered Users Posts: 815 ✭✭✭ hognef


    John1648 wrote: »
    Thank you for the views, much appreciated!

    Just to mention that I am a cash buyer, not requiring a mortgage, so am not affected by the interest aspects. Plus, I currently reside abroad (moved after the 2009 recession), so the withholding income tax is only 20%, and no PRSI tax either.

    My math would look like this, on the Irish rental income:

    1300 EUR monthy rent = 15 600 EUR yearly
    Minus allowable expenses= 1000 management fee; 1250 EUR the letting agency fees, insurance 250
    Minus local tax 250

    Net yearly income= 12, 850. This means no USC (as income lower than 13 000), and no PRSI tax. Gross tax = 2570. Minus tax credit of 1650= 920 EUR income tax.

    Net yearly income= 11 930 EUR. Which gives a net yield of 8%.

    So the only question is Tallaght Square or Ballymun?

    I'm not familiar with the tax laws in your current country (France?), but do you know for sure there's no tax implications there?


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    hognef wrote: »
    I'm not familiar with the tax laws in your current country (France?), but do you know for sure there's no tax implications there?

    I checked that too. There is a bilateral tax agreement between the two countries. The Irish income is taxed in Ireland, and is largely exempt. I will not pay double tax on it, in France


  • Registered Users Posts: 10,814 ✭✭✭✭ denartha


    Can you buy an apartment in tallaght 3 minutes to the square for 150k?


  • Registered Users Posts: 30,654 ✭✭✭✭ listermint


    denartha wrote: »
    Can you buy an apartment in tallaght 3 minutes to the square for 150k?

    Probably not in reality.


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    denartha wrote: »
    Can you buy an apartment in tallaght 3 minutes to the square for 150k?

    Overall, for a couple of months now, this is a buyer's market. There are even lower prices, I have seen. Brexit uncertainty rightly so is having an impact on prices, and speed of selling. 2018 is over ...


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    listermint wrote: »
    Probably not in reality.

    That would imply that was a scam add. I have in fact visited the place, personally... nobody else showed up for the public viewing...

    As I said, the market is changing. Boris is having an impact ...


  • Registered Users Posts: 30,654 ✭✭✭✭ listermint


    John1648 wrote: »
    Overall, for a couple of months now, this is a buyer's market. There are even lower prices, I have seen. Brexit uncertainty rightly so is having an impact on prices, and speed of selling. 2018 is over ...

    I'd put money down you won't get an apartment for 150k. Put money.

    180 k bottom perhaps.


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  • Registered Users Posts: 30,654 ✭✭✭✭ listermint


    John1648 wrote: »
    That would imply that was a scam add. I have in fact visited the place, personally... nobody else showed up for the public viewing...

    As I said, the market is changing. Boris is having an impact ...

    I know what the market is like and Boris has nothing to do with it.

    The central bank rules are doing their work


    And there are plenty of investors who don't visit the places. You won't pay 150 so don't base your figures off that. Be prepped for more and don't let it shock you


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    listermint wrote: »
    I'd put money down you won't get an apartment for 150k. Put money.

    180 k bottom perhaps.

    On one of the three apts the agent finally got an offer for 140, it was advertised for 150.

    I am thinking of buying it for 143. The seller is ready to take it out of the market, if no other offers come in ....

    But it is in Ballymun....


  • Registered Users Posts: 30,654 ✭✭✭✭ listermint


    John1648 wrote: »
    On one of the three apts the agent finally got an offer for 140, it was advertised for 150.

    I am thinking of buying it for 143. The seller is ready to take it out of the market, if no other offers come in ....

    But it is in Ballymun....

    I'm basing my assessment on the tallaght ones. Not ballymun. I'd imagine that price is achievable there. Various reasons.


  • Registered Users Posts: 10,814 ✭✭✭✭ denartha


    John1648 wrote: »
    On one of the three apts the agent finally got an offer for 140, it was advertised for 150.

    I am thinking of buying it for 143. The seller is ready to take it out of the market, if no other offers come in ....

    But it is in Ballymun....

    I asked about tallaght near the luas, not Ballymun where there is nothing transport wise.


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    listermint wrote: »
    I know what the market is like and Boris has nothing to do with it.

    The central bank rules are doing their work


    And there are plenty of investors who don't visit the places. You won't pay 150 so don't base your figures off that. Be prepped for more and don't let it shock you

    Thank you for these considerations!

    Noted.

    If the price goes above 155, no way I would buy, and not for the lack of funds. I could go up to 200k, this is not the point.

    180 would mean my yield would just be too low, why looking at Dublin then? I would find other use for the funds. There has to be a balance.


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    denartha wrote: »
    I asked about tallaght near the luas, not Ballymun where there is nothing transport wise.

    Sure, right. I meant that only one of the 3 apts got any offer at all, and it was the one in Ballymun.


  • Registered Users Posts: 5,715 ✭✭✭ SteM


    OP, the other posters are offering a fair assesment. I'd be shocked if the 1 bed in Tallaght Cross sold for €150k. A modern property, right beside the luas to town, college, hospital and shopping centre. It's being advertised at that price raise interest.


  • Registered Users Posts: 17,961 ✭✭✭✭ Del2005


    There's a huge amount of apartments being built, and even more with planning or going for planning, in Citywest. It's not that far from Tallaght and has good transport options to Tallaght and Dublin.


    There could be a reason why nobody is interested in a boom era apartment.


  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    Del2005 wrote: »
    There's a huge amount of apartments being built, and even more with planning or going for planning, in Citywest. It's not that far from Tallaght and has good transport options to Tallaght and Dublin.


    There could be a reason why nobody is interested in a boom era apartment.

    Perhaps, yes. Good point.


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  • Banned (with Prison Access) Posts: 112 ✭✭ John1648


    SteM wrote: »
    OP, the other posters are offering a fair assesment. I'd be shocked if the 1 bed in Tallaght Cross sold for €150k. A modern property, right beside the luas to town, college, hospital and shopping centre. It's being advertised at that price raise interest.

    Well, nobody else showed for the viewing ...

    On the other pages of the boards, the public is on the contrary, shocked that a 1 bedroom in Tallaght would cost 150 000 (as in - overpriced). These blocks were sitting empty in recession, a ghost quarter ... in 2013 they sold for 50 000 with a good deal of luck.


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