Getting 2nd mortgage to buy 2nd property

Iscreamkone

You need to talk to a mortgage broker. They will do the maths for you. A good broker will bust a gut to get you a 2nd mortgage and thus get his fee.

There is good money to be had in renting property that comes to market with no RTB restrictions (like your first property).

You might have to delay your move until your earnings increase plus you have a bigger deposit for property 2. Being a landlord isn’t for everyone - make sure you know about the pitfalls.

I like your ambition and entrepreneurial spirit.

FrankC21

What will be the best investment options for us. Who want to invest. Now that we are still in our early 30s. That we can harvest by the time we reach 50s.

Business? Maybe? Holiday home abroad like the one mentioned.

shimadzu

OP I think you need to make more progress in paying off your current mortgage as the max borrowings you can have on your income at the minute is ~315K, you can revisit the idea of owning a rental property in the future when you are in a better financial position.

For you to purchase a second property with a value of ~350K you would need a ~70K deposit, a 25 year mortgage for the remaining amount will have monthly payments of approx. 1.6K. Keeping in mind that you will have repairs, maintenance, property taxes, insurance on two properties and 52% of the rent will be heading in the direction of the tax man, you also have to consider that you will be paying ~210K in interest on that mortgage over 25 years. It would probably take 45-60 years of rental income from your current property to cover the cost of the new property not including your deposit.

o1s1n

https://www.boards.ie/discussion/comment/121897009#Comment_121897009

One thing to remember though is that 500,000 in 2008 would be worth more than 500,000 in 2024. So yes, the figures might nearly look similar but we'd need to exceed the 2008 prices to actually achieve parity.

Some online inflation calculators I'm looking at are saying about 17-18% beyond 2008 prices.

XsApollo

https://www.boards.ie/discussion/comment/121896595#Comment_121896595

You can’t tell the bank that, whether the bank takes Rental income into consideration is up to them.

PTSB did take a % of rental income into consideration for me back then.

sportsfan90

https://www.boards.ie/discussion/comment/121896920#Comment_121896920

What investment books suggested this if you don't mind me asking?

holliehobbie

Why do you have debts with savings of 1400 per month? And a lodger paying €500 a month? You shouldn’t have any debts surely? Also a few pointers about buying a house in Spain. The Spanish government do not like foreigners buying property there. If you think tax is bad in Ireland you’ll be in for a shock when you sell a property in Spain!

Buddy Bubs

https://www.boards.ie/discussion/comment/121898099#Comment_121898099

Ladybird must have published those books. Property isnt diversified at all.

I've no problem with people buying property as part of a portfolio but there's plenty who have been burnt badly

Jim2007

https://www.boards.ie/discussion/comment/121896920#Comment_121896920

Are you really tell us that you are oblivious to all the people that were wiped out during the last crash?

Jim2007

https://www.boards.ie/discussion/comment/121897009#Comment_121897009

But that is only half the storey.... most balanced portfolios recovered within about 18 months of the crash and have been growing for the past 16+ years while many property owners are just about getting back to square one. Everything that happened in the last Irish property crash has happened before and will happen again and the Irish market is overheating right now. So something like a major war in Europe or else where could send the world economy into a spin and heaven knows where it could end up.

FrankC21

Debt was from home improvement loan we took out when we got the property to furnish it. It will finish next year.

Soon as the loan finish, will free up about €600+ and will go on top of our monthly savings. I think at the moment we're not in a position to apply for 2nd mortgage.

However, i am glad that i put this out here, i have got very good points which will help me make decisions for the future. Thanks very much.

Jim2007

https://www.boards.ie/discussion/comment/121897098#Comment_121897098

You need to start by recognising your limitations, because if you don't all you will find yourself doing in your 50s is struggling to pay down massive debts.

• You talk about doing research, but from your posts it seems in reality it is all directed at confirming an existing view. If you were doing objective research into investing and financial risk, then of course you'd have come a cross lots of reputable articles highlighting the risks of failing to diversify etc...
• You have a very limited view of property investing and management in Ireland, let alone to start investing in a foreign property market
• What skills or knowledge to you have that might be used in setting up a business? And here again on average about 90% of businesses fail for one reason or another.

Nobody can tell you what the right investment will turn out to be in 30 years time. But what I can tell you right now is that you need to put an awful lot more effort into learning about investing and finance risk before making a move. And based on what you have posted, you are most likely close to being over extended in the event of a financial crisis.

sammye333

my 2 cents. Just keep saving all the extra cash. your payment will increase in 2025 , so it wont be 850 anymore.

I paid off my mortgage early buy going on a variable and throwing extra cash at it.

you mentioned a few times that the house cost 260k. that will be nearly 400k by the time you have paid the bank off. people tend to forget this part.

SupaCat95

I echo what everyone else is saying, thread carefully. Also wonder why all the other landlords are running out of the business. Be aware of what future government amendments to the constitution are on the cards.

Jim2007

https://www.boards.ie/discussion/comment/121902138#Comment_121902138

I think there is a distinction to be made between landlords who are in the business of letting property and accidental landlords who bought a property thinking it would be easy money. I don't know any professionals, if you want to call them that, who have left the market in recent times but then these people have a different perspective and objective.

I would not be terrible worried about amendments to the constitution etc... as there will be time to act and they are a single events. It is the sudden sharp sock of something like a war which impacts market value, the borrower's income and the financial institution at the same time that is of most concern as there will be little warning and very little that can be done to mitigate the risk.

SupaCat95

Well before the last recession, I had a "buddy" and Mrs, cock sure of themselves, power couple, 5 years into their first mortgage, took on a second house as an in vestment. Given it was a lot of work and tenants were a pain in the hole. They made it work. They doubled their money. With no idea that the recession was on the way (I lacked financial literacy at the time), I suggested they sell both houses and rent a month before the financial collapse. They were so sure of themselves they bought in again to a town house converted to flats. Within 2 years everything had failed, his career was on the rocks, she couldnt pass professional exams. I think they were bipolar (hi highs and lo lows type).

I couldnt understand why they were flipping out over 0.75% rate increase. I do now.

Tenants are a pain in the hole, late rent, rows, rows with neighbours, maintenance, insurance, tax, bins, mould, the list goes on and on. A Landlords lot is not a pleasant one especially if ye in mortgage.

Find out about the next proposed ammendment to the constitution. Dont blame me I didnt propse it or write it but its on the way.

SupaCat95

@holliehobbie Deal with the Spanish government or local government? Absolutely NO way they make Irish tax laws pallitable and planning permission reasonable.

First there is 30% tax at either end when you buy/sell a house in Spain. There is no planing protection , if the goverment want to route a road in your direction, unless you pay them to redirect. You wouldnt get it from mafia.