Investment Property Rental Advice - Vacant Property Grant Approved for 70'OOO euro

shane9

In 2023 I was in the fortunate position to be able to purchase my first property - a three-bedroom home. This property had been vacant for a period of two plus years before I purchased it.

After months (and months) of putting together documentation and jumping through loops for the council, I have received approval from the council for a grant of 70’000 euro to renovate the property.

In total I will be putting in approximately 120k euro to completely renovate the home – the 120k euro is made up of 50k euro offered by the bank as part of the mortgage for renovations/home improvements and of course the 70k euro from the grant. The work will hopefully be completed by a one-stop-shop building contractor. This will hopefully bring the home from a BER rating of E to a minimum BER rating of B2.

This is all fantastic, but here is the issue!!!! For anyone who has researched the grant online, I’m sure ye have heard of the extreme backlash the government have received for the difficult conditions of the grant – the MAIN issue being that the council do not reimburse you the 70’000 euro until there is proof (transfer of funds/payment for work) that you have paid the contractor in full for the works completed.

I, like many many other people across the country do not have 70k cash lying around to throw at renovating a home. However, the council will not pay over the money until they receive proof of payment for the works being completed? I don't want to be left with paying crazy interest rates on a personal loan while I wait for the council to pay out the 70k.

Does anybody have any advice on what my options are here in terms of financing this 70k until the grant comes through? Has anybody else who has gotten the grant approved had the same issue? All advice is hugely appreciated thank you!

FOR CONTEXT: A family member sold me the property for 130k - purchased it as 130k for a 3 bedroom property in the current market is almost unheard of & prices are only continuing to rise. I was aware that the property would be eligible for the 70'000 euro grant. Therefore overall I should be getting great value for a property that is going to be a minimum of a B3 rating. The LTV is greater than 80% as I'm a first time buyer. All going to plan with financing the property, once the property is completed renovations it will be worth approximately 250k considering the total renovations will amount to 120k. Just need to figure out the funding of the 70k part is all and come to agreement with the building contractors

3DataModem

"Crazy interest rates" ... considering the overall deal you are doing, another 7-10k on interest financing seems a small price to pay to make this happen. You are turning a 180 investment into 250k. How long is the work?

ballyharpat

could you get the mortgage/loan from the bank, use that for the first 50k, then either save up or get a loan for 20k to pay the builder for the next phase, then you have 70k paid, get a receipt from the builder to say that it's paid, then get your grant, and continue on working or maybe the builder might give you a little leeway on 40k, if he can trust you, while waiting for the grant to come through.

shane9

https://www.boards.ie/discussion/comment/121801831#Comment_121801831

Very fair, thanks for your comment! I am hoping that the works won't take any longer than 8-12 weeks as I am going through a developer who usually only builds housing estate development, he will have all contractors lined up for me.

ted1

get a loan from the credit union

70k for 12 months will cost less than 3k. For 6 months less. Borrow enough to pay the repayments

if you got the property for less than

market value. , there’s a good chance revenue will come after you looking for a tax on the “gift” been the difference betweeen purchase price and actual value

C3PO

I get your frustration but I can also see that it is reasonable for the authorities to ensure that the work has been done before paying over what is a generous grant! My brother is availing of the full grant at the moment too and is using a personal loan to cover the temporary shortfall!