Torn between two houses....

joejoem

Ok Im torn.... On one hand I can have a two bed house in one of Dublins best & most expensive area's (I will be getting quite a good deal) with a mortgage I can just about afford, or I can wait and see what happens with another 8 bed house which has come one the market which is 100k more than I can afford at the moment and it will probably go up another 100k before its sold and then 50k refurbishment, but I could get a monthly rental of about 2500 a month which would leave me with the same mortgage as the first property, but if I hold out I could loose both. Both would get simialar capital appreciation. Im friggin torn!

Bluehair

joejoem wrote:

another 8 bed house which has come one the market which is 100k more than I can afford at the moment and it will probably go up another 100k before its sold and then 50k refurbishment

Seems like you've answered your own question in a way. You mention rent but can you handle the mortgage repayment on your own if (when) there's a couple of months a year with no rental income? Can you cope as interest rates rise?

MorningStar

joejoem wrote:

100k more than I can afford at the moment and it will probably go up another 100k before its sold and then 50k refurbishment, but I could get a monthly rental of about 2500 a month which would leave me with the same mortgage as the first property, but if I hold out I could loose both.

The renting idea is not a bad idea and if you really love the house it could be worth it. If you think it will cost 50k refurbishment it will probably cost twice that. Unless you have developed a house before or actully involved in the building trade it will be more work than you think.
Tennants in your house is a pain. Lived in a house where I was responsible for the other flats and they were constatantly breaking things that I had to fix.

It is not an easy option to rent and you would have to do it for years. You also have to pay tax on rental income over a certain amount!

gamer

U can earn upto 7200 per year under rent a room scheme if u a living in the house ,go a euro over 7200 and u pay tax on the whole lot,most investors go 4 interest only mortgage payments are lower than standard mortgage,,u only pay interest due on the mortgage,u can save on renovation by doing some work yourself,there is always building materials 4 sale in buy and sell bricks,wood etc less than half shop price.if u r buying , a large victorian style house 3 story it WILL go up in value after renovation ,u cud always sell it after 2 years if u find the mortgage is too much to bear.see revenue.ie for info on stamp duty rates and rent a room scheme.you can rent more than 1 room tax free ,there are various tax reliefs avaidable, ie u can set a proportion of mortgage payments against rental income,ie get tax relief on mortgage payments,sounds like u need to do alot of research,banks are now giving out buy to let mortgages first 5years interest only paid, do google.ie search buy to let ireland.

chump

I'd buy the 2 bedroom house in good area

MorningStar

gamer wrote:

, a large victorian style house 3 story it WILL go up in value after renovation ,u cud always sell it after 2 years if u find the mortgage is too much to bear

There is no guarantee the house will go up in value. It may be likely but not certain. If it's of any age even after a surveyors report some shocks may appear that cost a lot and/or take a long time. It's one thing if it's your home but if you need the rooms to be rented for income it is a problem.
Look at any of the property development TV shows and you will see there is always a problem.
The governement have been rumbling about property tax etc.. which means things could change and effect you drastically on a large house.
You would need to do a lot of research and take a large risk to buy the big house. It could be worth it but it is not easy and it has it's risks

Beruthiel

chump wrote:

I'd buy the 2 bedroom house in good area

me too
less of a headache
on so many levels