Opportunity to buy after landlord passed away?

NeptunesMoon · 23-10-2020 10:32pm #1

Ive been renting the same place in south dub for over 10 yrs, rent has pretty much stayed the same, 600eur a month for my own 19m2 place with my own front and back door, shed and parking space part of a block. They could probably have gotten about 1200 pretty easy in recent years. I know Ive been lucky the landlord wasnt greedy and in fairness, ive been a great tenant, rent paid on time evry time and did any basic maintenance myself, paying for materials etc and maybe phoned the landlord 2/3 times with issues in all those years.

the property is now going thru probate after the landlord died and its been left to the kids, who i believe all have their own homes and sound like they are all comfortable.

the landlord actually got the place valued about a year ago and it was said to be worth about 165k, but i was speaking to somebody and they said that value will depend on the buyer. that any investor looking to buy it, can only rent it at 4% more than the €600 i was getting and it would only make sense to invest in it if it was around 100-120k, then in terms of an ideal place to live, the area is great, but the design of the place isnt, mainly the fact that the "bedroom" is too small to fit even a single bed in, without blocking one of the 3 doors it has, so ive been on a sofa bed all these years.

it'd be good for short term letting, or airbnb, but at the moment im not sure will people be looking to enter that industry?

the guy was also saying that i could be at a good advantage to buy if they are eager to get it over and done with, that as soon as they give me notice, it'll be 224 days before i need to move and they might worry what will happen the market in that time and that they cant advertise it or show it until im gone?

i dont think i could justify 165 for it and not sure many will, but close to 100 maybe.

so im wondering is there any legalities that are on my side that would give me an advantage at the start of that notice period to perhaps put in an offer so they dont have to wait and deal with it later?

are there any loopholes that potential buyers/investors could go through to get around not being able to rent it for more than 600+4% and increasing only 4% over the next years on that would make them still see it as a good investment?

just wondering how realistic 165 is and then again how realistic closer to 100 is for me if i can get myself in a position to be able to put in an offer. right now i prob wouldnt get approved for a mortage of even 100, but id be able to pay it back no prob as itd prob be around 600 anyway?

cheers for any help on this!

Gumbo · 23-10-2020 11:25pm

When you say it’s 19 Sq. M, what are you renting?
A room, an annex, ???

Do you want to buy the whole house or just your annex?

Fol20 · 23-10-2020 11:42pm

If rent hasn’t been increased in 10 years. They can increase the rent by 40pc or an extra 240e which sounds like it’s still a good bit below market rate.

It sounds like you want to have all the benefits. Valued at 165. Yet you think it might be lucky to have it for 110-120 due to rent so now you would pay 100k???

If I was the owner. I would remove you. Spend 10-20k to make it possible to rent at highest rent possible along with increasing the value back up to 165.

jimmycrackcorm · 24-10-2020 12:20am

NeptunesMoon wrote: »

I
the landlord actually got the place valued about a year ago and it was said to be worth about 165k, but i was speaking to somebody and they said that value will depend on the buyer. that any investor looking to buy it, can only rent it at 4% more than the €600 i was getting and it would only make sense to invest in it if it was around 100-120k, then in terms of an ideal place to live, the area is great, but the design of the place isnt, mainly the fact that the "bedroom" is too small to fit even a single bed in, without blocking one of the 3 doors it has, so ive been on a sofa bed all these years.

it'd be good for short term letting, or airbnb, but at the moment im not sure will people be looking to enter that industry?

You have several hopeful assumptions. Apart from the fact that the rent increases are based on how long since the last rent review, a new owner can give you the required statutory notice to leave.

Anyone buying will have a long-term view so the short term aspects of Covid won't bother them so much.

If the landlord got it valued at 165k then you can be sure that the inheriting owner(s) will get an equivalent valuation so there's not much hope for you to assume you can put in such a low offer.

I'm not sure how it is a liveable property if as you say one of three doors are blocked by a single be, or why a room has three doors. If it is an annexe of a larger property then it's likely to be viewed like that instead of an independent saleable property by the new owner.

Still no harm in making an offer... you could be in luck, but just don't assume.

Jimson · 24-10-2020 12:26am

Is it a granny flat your renting or what is it?

NeptunesMoon · 24-10-2020 12:30am

its not a room or an annex, its like a small studio/bed sit, but its own address and eircode, own front door etc, part of a bigger building with other dwellings, each their own address.

The rent actually increased by more than 4% in the 2nd quarter of 2018 to 600. does that put me in a better position again then?

im seeing if theres any point in me giving this more thought, i never considered it until the guy I was speaking to explained how they might be happy just to get it sold asap rather than waiting 224 days for me to move.

If the rent can't be increased, what would be the point in the owner spending money to rent it at a higher amount if they'd easily get the max they could rent it for if it's just 4% on top of waht I'm paying?

its being willed between kids, so I'm not sure they'd be interested in renting or not sure they'd be interested in doing it up.

on the chance they would rather just sell it instead of waiting out the notice period before they can do anything, what position would i be in competing with potential investors?

cheers

Jimson · 24-10-2020 6:01am

I think its a pipe dream, if the place is worth 165K there not getting to let it go for 100K even if you stay the 222 days.

Since its South Dublin someone will happily pay the 165K and renovate the whole building for another 120K and try flip it for a profit or a builder will do it themselves and renovate it a cheaper price and flip it then or live it in it.

The owners might be happy either to keep the current tenants there and keep renting out the places there.

dubrov · 24-10-2020 6:44am

The new owners might sell to you slightly cheaper given the likely quicker sale and easier transaction.

However, I think we are talking in the 0-10% range and it would be very unlikely you would get anything near the 40% off you are hoping for

NeptunesMoon · 24-10-2020 8:05am

Jimson wrote: »

and renovate the whole building for another 120K and try flip it for a profit.

This isnt an option, the other dwellings are all seperately owned, the owners of mine literally just own this 19m2 dwelling and pay a small management fee to the management company for the maintenance of the grounds/bins etc and that's it.

Yes, it's definitely a long shot that they'd go to 100, but maybe 120 or so the guy I was talking to was saying?

I'm more just looking for advice on any legalities that would be on my side, such as not being able to rent it for more than 4% to any new tenants whether it's the current owners renting it out, or an investor looking to buy it to rent it out (meaning they wouldn't see the value to do so at 165k if they can only get 600 per month?). Are these rules very tough to get around , or are there easy loopholes that would allow either the current owner, or new owner to rent it out for 1,200 within a few weeks of buying it?

Fol20 · 24-10-2020 8:30am

NeptunesMoon wrote: »

its not a room or an annex, its like a small studio/bed sit, but its own address and eircode, own front door etc, part of a bigger building with other dwellings, each their own address.

The rent actually increased by more than 4% in the 2nd quarter of 2018 to 600. does that put me in a better position again then?

im seeing if theres any point in me giving this more thought, i never considered it until the guy I was speaking to explained how they might be happy just to get it sold asap rather than waiting 224 days for me to move.

If the rent can't be increased, what would be the point in the owner spending money to rent it at a higher amount if they'd easily get the max they could rent it for if it's just 4% on top of waht I'm paying?

its being willed between kids, so I'm not sure they'd be interested in renting or not sure they'd be interested in doing it up.

on the chance they would rather just sell it instead of waiting out the notice period before they can do anything, what position would i be in competing with potential investors?

cheers

Ok. Given that your last rent increase was in 2018. The highest they can increase it by is 12pc( so very little). I would still remove you as one of the exemptions is if it’s left idol for 2 years, you can set the rent at whatever you want. Given that the rent can be doubled along with. Probate sales taking a long time to sell, it would make sense to do this.

It’s not about the kids being interested in renting. It’s about whatever the new owner wants and since your rent is so low relative to what can be achieved. It makes it easier to try for an exemption. If you were middle of the road. Then it might be a toss up between the two.

I think as others have said. No harm in putting in an offer as you have nothing to loose. You just need to be realistic as you are right most people that inherit want an easy transaction but you will be lucky to get 10-20pc off. Not 40-50pc.

BrokenArrows · 24-10-2020 8:31am

You don't really have anything to lose.
Make an offer of what you think it's worth to you.

Baby01032012 · 24-10-2020 9:29am

It’s unlikely an investor will buy it given the rent cap. And I doubt owners would sell it at low enough price to give any investor a return. You can have it valued yourself however the owners are unlikely to sell at the kind of discount that you are thinking of. There’s a strong market there despite the pandemic.

Gael23 · 24-10-2020 9:35am

The only reason I would consider this is if I was in a position to buy the whole building. I would just take advantage of the 224 days notice and move on

Sleeper12 · 24-10-2020 9:52am

If I was to buy it as an investment then I would buy it. Doing substantial work eliminates the 4 percent rule.

So on the down side an inverter could put you out, do it up & get double the rent. An investor will want maximum rental

Baby01032012 · 24-10-2020 10:34am

Sleeper12 wrote: »

If I was to buy it as an investment then I would buy it. Doing substantial work eliminates the 4 percent rule.

So on the down side an inverter could put you out, do it up & get double the rent. An investor will want maximum rental

Doing it up is no longer a valid reason. There are strict rules around substantial refurb, many of which are not open to apartments such as increasing floor area, changing layout to increase accommodation.

Graham · 24-10-2020 10:38am

I thought the definition was "substantial change in the nature of the property".

OP, for what it's worth I'd expect a small property on Dublin's south side to generate some interest at the price points you're talking about.

Not massive interest but enough to pull the rug from under particularly low offers.

NeptunesMoon · 24-10-2020 12:06pm

cheers everyone...

Fol20, what do you mean try for an exemption? An exemption for what?

everyone, I repeat, the whole building is not for sale! the building this property is a part, has about 10 individual dwellings, all with different owners, some of the owners live here, some rent their properties out. but all the owner of my place has, is the 19m2 unit I live in.

Given that it's part of a bigger building, there's nothing that can be done structurally to make it any bigger and it's not ideally designed internally either, with a fireplace in the centre, messing up any opportunity for redesigning the whole place more efficiently as I believe this is a structural support for the entire building and property above, believe me, I've thought how it could be redesigned as I'd love a proper bed instead of a sofa bed, but there's not room for a single bed, let alone a double. I'm here because it's affordable and a good location, if I had 300k to buy a place, I'd rather put more into a proper place to live than 1XX into this and have a lot left over for other ****. Not big enough for a bed and not big enough for a small table to eat at without it being in the way, so I eat most meals at my computer desk lol

So there doesn't really appear to be any loopholes to get around the 4% cap from what I see above? even "substantial change" is said not to be enough anymore, and substantial change isn't really even possible with this place anyway.

So I'd be hoping the kids it was left to, want the least hassle possible and would like to just get it over and done with and sold to allow me put in an offer that they might consider rather than waiting 224 days to go through the selling procedure, dealing with estate agents, viewings and all that.?

pc7 · 24-10-2020 12:10pm

Just talk to them op, see what happens. With the low rent you’ve been paying and the fact you could afford to buy it, do it. Alternatively you’ll have to buy elsewhere or keep renting, you won’t get somewhere so cheap again.

24-10-2020 12:11pm

Sure make an offer and see what happens.
None of us can tell you what they are thinking.

Jimson · 24-10-2020 12:17pm

Okay have the full picture now, you could always ask but I don't think they would come down 50K for the sake of 222 days. Theyd be mad to.

Do you even know if there definitely planning on selling it?

Would you be willing to lose out on 50K for the sake of 222 days? I know I wouldn't.

They might even Air BnB it. They might decide to keep it if they kids starting college and sell it then afterwards.

They might offer it to you at a higher rent.

Who knows unless you ask. Just cause you live there, they are not going to knock 50 K off the asking price. That is insane and not going to happen.

There probably thinking how do we increase the rent on this guy or how can we feck him out as soon as possible.

Just cause you live there why would they give you a discount? An estate agent will look after all the viewings if they go down that route.

Fol20 · 24-10-2020 12:23pm

NeptunesMoon wrote: »

cheers everyone...

Fol20, what do you mean try for an exemption?
So there doesn't really appear to be any loopholes to get around the 4% cap from what I see above? even "substantial change" is said not to be enough anymore, and substantial change isn't really even possible with this place anyway.

Don’t let it for 2 years. Then you can let it at whatever amount you want. Probate might take a year to two years to complete so by the time it’s actually going to be let again it again. They will be able to let it at full rate(double current rent)

the_syco · 24-10-2020 3:25pm

NeptunesMoon wrote: »

then in terms of an ideal place to live, the area is great, but the design of the place isnt, mainly the fact that the "bedroom" is too small to fit even a single bed in, without blocking one of the 3 doors it has, so ive been on a sofa bed all these years.

Where do the 3 doors lead to? The bedroom sounds more like a hallway!

NeptunesMoon wrote: »

Given that it's part of a bigger building, there's nothing that can be done structurally to make it any bigger

NeptunesMoon wrote: »

and it's not ideally designed internally either, with a fireplace in the centre, messing up any opportunity for redesigning the whole place more efficiently as I believe this is a structural support for the entire building and property above

Look to see if you can place a pillar where the fireplace is currently?

Markcheese · 24-10-2020 3:42pm

Can you get it valued now ? ( A realistic value ) , get your finances together , put in a realistic offer ( that accounts for a quick sale,and no hassles to the family and see what happens,
be very careful to be as diplomatic as possible, it's probably a stressful time for the family ...and wills and property splitting can be extra stressful , ( how many family disputes have you heard of over wills ? ) , Someone in the family will want it dealt with quickly, someone will be giving out if they thought they were going to be down a fiver ...
Basically what ever you do ,don't come across as if you're taking advantage of the fact that you've been on a good number for a good few years .... Their own accountant or solicitor will clue them into the realities pretty quick ....

NeptunesMoon · 25-10-2020 12:45am

cheers again!

No I'm not sure if they are definitely going to sell it or not, I'm guessing so and from speaking to the child who was named on the will along with another one I haven't spoken to, that sounds like what will happen.

Don’t let it for 2 years. Then you can let it at whatever amount you want. Probate might take a year to two years to complete so by the time it’s actually going to be let again it again. They will be able to let it at full rate(double current rent)

But probate is happening now, and I don't believe they have the authority to give notice until it's actually in their ownership legally? So they would need to be waiting 224 days plus 2 years to rent it out at a higher price I would have thought?

the syco there's a doorway beside the kitchen (the door has bene removed) which leads to the "bedroom", the toilet/shower room is accessed through the "bedroom", and then at the back wall of the "bedroom" is the door to the back yard.

I don't know enough about architecture and engineering to be sure, but from what I've heard before, there are certain structural chimney/fireplace set ups that just can't be interfered with, even if it was, I can't see it giving that much more space to allow a more comfortable living arrangement.

The main thing is, I don't even have 100K to make a serious offer at that, I'd need to apply myself to even get 100K available to me on time, and even that could be a stretch. I'm not trying to low ball here, Im just seeing if there may be any hope that if I were to somehow get that together, that I could be in with a chance

Curious1002 · 25-10-2020 9:56am

Hi, I may not help you with your main question but I noticed something that I think will help you and others to understand the 4% RPZ rent increase rule. Yes, you are right that currently the rent may go up annually only 4% but there are some exemptions especially for those who have not increased rents for a very long time, like in your case.
4% of your current rent is €24 but dont think that your rent my only go up to €624. Since your landlord has not increased your rent for a very long time he (his family) can use the RTB rent calculator to see how much they can increase your rent by.
Here is the link: https://www.rtb.ie/calculator/rpz
I added some sample figures and dates based on your initial post and got a new allowed rent of €720, which is 20% higher than your current one. Next year they can increase it further 4% of €720 and continue the 4% every year from then on.

I hope this clarifies your rent level.

NeptunesMoon · 25-10-2020 11:12am

Thanks for the link, given my last rent increase was 2018, I've checked the dates and the max mine can go up to if they were to give notice immediate, was I think €664, then the max they could get say if they gave me 224 days notice now and got a new tenant at the end of 2021, would be €686, so still pretty low for a place valued at €165K I'd think for any investor?

Fol20 · 25-10-2020 11:21am

NeptunesMoon wrote: »

Thanks for the link, given my last rent increase was 2018, I've checked the dates and the max mine can go up to if they were to give notice immediate, was I think €664, then the max they could get say if they gave me 224 days notice now and got a new tenant at the end of 2021, would be €686, so still pretty low for a place valued at €165K I'd think for any investor?

As mentioned already. For an investor,given the rent is very low. They would more than likely leave it empty for 2 years and then get 1200.

NeptunesMoon · 25-10-2020 11:30am

yea thats an option for them, but an option an investor would be interested in compared to other properties i wonder? like they are losing out on 28k rent in those two years compared to buying somewhere else where the rent was at current rates if it was 1200

Fol20 · 25-10-2020 11:30am

NeptunesMoon wrote: »

cheers again!

But probate is happening now, and I don't believe they have the authority to give notice until it's actually in their ownership legally? So they would need to be waiting 224 days plus 2 years to rent it out at a higher price I would have thought?

Good question, i dont know if they can give notice now or until they have ownership. If i was the son/daughter, i would more than likely ask my solicitor can i start the eviction process now if im the executer of the will and use my solicitor to send the notice on the family behalf. Just to be clear though, i dont know if that is possible.

I have come across some investors that have done this exemption before they sell as it does devalue the property especially if they are 50pc or more below market value so although you might view it as leaving money on the table and not getting 7200 for 2 years.. Investors do not look at something from a short term point of view, its generally long term and if they can double their cashflow rather than grinding away for the next 13-14years to get it up to 1200. Its worth it from a admin/stress level of increase rent every year and especially when you consider the opportunity cost of doing gradually increase instead of one large increase after only 2 years.

NeptunesMoon · 25-10-2020 11:35am

Yeah I can't see anyone having the legal authority to serve eviction until probate is complete, but maybe there's ways for them to do so, but maybe I would have been served it already if so.

On your other point about investor, I actually replied between your last two posts, but I was thinking its the investor losing out on 28k, as opposed to 14k, compared to putting that investment into another property where the rent was at market rate, so I'm still not sure is it a wise choice for an investor who is looking to make a quick return

the_syco · 26-10-2020 2:50am

NeptunesMoon wrote: »

the syco there's a doorway beside the kitchen (the door has bene removed) which leads to the "bedroom", the toilet/shower room is accessed through the "bedroom", and then at the back wall of the "bedroom" is the door to the back yard.

Room leads to bathroom, kitchen and back yard. I'd call it a hall. Sounds like you got a studio which had no bedroom?

Pkiernan · 26-10-2020 9:33am

Fyi, no terminations may be served whilst emergency covid measures are in effect.

So, youre 224 days is now really at least 250.

If the legislation is extended, then so will your notice period.

I

NeptunesMoon · 26-10-2020 10:45am

thanks, i'd say it'll be a while before they serve notice anyway as its only been a few months since they passed away.

the syco, have a look at the plan here:

I think the measurements may be off, the estate agent said 19m3 where'as the 7.5x3 would make it a little bigger.

the yard can also be used as a private/off street parking space by the way.

HBC08 · 26-10-2020 10:58am

NeptunesMoon wrote: »

yea thats an option for them, but an option an investor would be interested in compared to other properties i wonder? like they are losing out on 28k rent in those two years compared to buying somewhere else where the rent was at current rates if it was 1200

If you're currently paying €600 a month then they would lose out on €14400 in two years.They could use that time to do it up in no hurry and under no real time constraints.They then could rent it out at market value forever more, it's a no brainer in my opinion.

dubrov · 26-10-2020 11:03am

HBC08 wrote:

If you're currently paying â‚¬600 a month then they would lose out on â‚¬14400 in two years.They could use that time to do it up in no hurry and under no real time constraints.They then could rent it out at market value forever more, it's a no brainer in my opinion.

They'd be down a lot more if they left it empty and refurbed over 2 years. Probably 20k plus refurb costs. They just wouldn't get that back with the increased rent.

An investor would likely just increase the rent as quick as possible. Given a likely recession soon, I'd say they'd be up to market rent in a few years.

HBC08 · 26-10-2020 11:22am

dubrov wrote: »

They'd be down a lot more if they left it empty and refurbed over 2 years. Probably 20k plus refurb costs. They just wouldn't get that back with the increased rent.

An investor would likely just increase the rent as quick as possible. Given a likely recession soon, I'd say they'd be up to market rent in a few years.

It would take a good few years at 4% increase to get to market value (the market value would also be climbing over this time) In my opinion the scenario I described would be the optimal one for owners/investors.For example lets say spend 20k on a refurb and lose out on approx 15k rent,that's approx 35k and the place ready to rent in 2 years.They recoup the 35k in less than 3 years at market value.5 years from now that's paid for itself and you have a newish refurbished property.
It would take a lot longer going up 4% a year and you would still need to do the refurb at some stage.Like I said it's a no brainer.

spaceHopper · 26-10-2020 11:25am

Reading your first post you seem to be trying to maxmise your advantages againt the family of the dead LL. If you were them would you negosiate under those cirmcunstaces so dial that back.

I would approach it like this, you will need to talk to the bank and find out howmuch you can borrow and over how long, what deposit you need and then there's home and life insurtance. Is the property mortgable.....

I reckon with a 25 year mortgage you would be looking at less than 750 a month, assuming a 20% deposiot, they would want that on a studio. Lets say to an investor it's worth 130 and to an owner it's work 165 then offer some where in the reagon of 147 that's mid way and leave it with them. They then have to weight up employing an estage agent and paying them commision or quiock simple sale.

NeptunesMoon · 26-10-2020 11:48am

spacehopper, as I said, I'm not even sure id be able to pool anything together to get even 100K I don't have anywhere near 16k savings if it's 10% deposit, and definitely nowheree near 32 if it's 20%... add to that, I'm even doubting I'd get approval for a mortgage for 100k, let alone 50% more than that. This is me trying to see what options are available to allow me to stay in the home I've been in over 10 years and what my competition may be and should i even get my hopes up at all, im not some capitalist trying to add to my property portfolio or get on the property ladder, im just trying to secure somewhere to live.

Fol20 · 26-10-2020 1:07pm

NeptunesMoon wrote: »

On your other point about investor, I actually replied between your last two posts, but I was thinking its the investor losing out on 28k, as opposed to 14k, compared to putting that investment into another property where the rent was at market rate, so I'm still not sure is it a wise choice for an investor who is looking to make a quick return

Renting is longer term is if there is value there, investors will bid. It may not achieve the exact going rate given it rental yield however the figures you showed are a little off as that is gross.

My assumption here is that their tax rate is 52pc and CGT is 33pc.

So if they left it idol for 2 years, thats a net opportunity cost of 14k. If the seller dropped the value by around 10-12k, that makes up the difference they are down while they also dont need to deal with tenants for 2 years as well as an added bonus.

If they ever sold the property, this cheaper price of 10-12k only costs them about 3k in tax vs 6k through PAYE normal tax if they were receiving rent.

Fol20 · 26-10-2020 1:17pm

dubrov wrote: »

They'd be down a lot more if they left it empty and refurbed over 2 years. Probably 20k plus refurb costs. They just wouldn't get that back with the increased rent.

An investor would likely just increase the rent as quick as possible. Given a likely recession soon, I'd say they'd be up to market rent in a few years.

For a place that size, id say your talking small money to make it look nice again, unless toilet needs to be completed gutted. Everthing else including the kitchen as it would be small but not cost too much.

it would take a lot longer than a few years to get it to market rent. The example below also disregards the fact that you also need to give 3 months notice on any increase so add an extra 3 months to every year increase as well:
2020 600
21 624
22 649
23 675
24 701
25 729
26 759
27 789
28 821
29 853
30 888
31 923
32 960
33 999
34 1039
35 1080
36 1123
37 1168
38 1215

To get to market rate of about 1200, it would take you up to 2042 give or take when you include another 54 months as part of the existing legislation to give 3 months on any increase.

The above also doesnt account for inflation at circa 1-2pc per annum so that will mean market rate will likely be more in 20 years as well.

As you can see, this is why it makes sense for any investor to leave it idol for 2 years as there is a serious amount of money on the table when it takes 2 decades to get it to market rate.

dubrov · 26-10-2020 1:24pm

HBC08 wrote: »

It would take a good few years at 4% increase to get to market value (the market value would also be climbing over this time) In my opinion the scenario I described would be the optimal one for owners/investors.For example lets say spend 20k on a refurb and lose out on approx 15k rent,that's approx 35k and the place ready to rent in 2 years.They recoup the 35k in less than 3 years at market value.5 years from now that's paid for itself and you have a newish refurbished property.
It would take a lot longer going up 4% a year and you would still need to do the refurb at some stage.Like I said it's a no brainer.

Market rents won't rise linearly. I'd expect it to take less than 10 years to catch it with an initial jump and subsequent 4% annual increase. Also factor in, if there is a recession/drop in rents, the cap will likely be removed.

I also can't see anyone doing a refurb on a place at well below market rent.

Most investors won't want the hassle anyway so it would likely sell to a singe owner occupier.

MrMusician18 · 26-10-2020 1:27pm

I think we need to rewind a bit here. Are we seriously suggesting that a studio flat that's a mere 19m2 is worth buying?

Such a tiny place might be ok as a short term rental, but to own and occupy - I think you'd need your head examined

kippy · 26-10-2020 1:30pm

OP you need to get your **** together either way.
If you don't have access to 150 - 180k you need to sort that out. That's your major stumbling block at the moment not some ifs and buts.

Del2005 · 26-10-2020 1:31pm

NeptunesMoon wrote: »

spacehopper, as I said, I'm not even sure id be able to pool anything together to get even 100K I don't have anywhere near 16k savings if it's 10% deposit, and definitely nowheree near 32 if it's 20%... add to that, I'm even doubting I'd get approval for a mortgage for 100k, let alone 50% more than that. This is me trying to see what options are available to allow me to stay in the home I've been in over 10 years and what my competition may be and should i even get my hopes up at all, im not some capitalist trying to add to my property portfolio or get on the property ladder, im just trying to secure somewhere to live.

What are your plans for the future? Do you plan to have children? Is it worth loosing your 1st time buyer status for a property that doesn't even have a functioning bedroom?

HBC08 · 26-10-2020 1:34pm

dubrov wrote: »

Market rents won't rise linearly. I'd expect it to take less than 10 years to catch it with an initial jump and subsequent 4% annual increase. Also factor in, if there is a recession/drop in rents, the cap will likely be removed.

I also can't see anyone doing a refurb on a place at well below market rent.

Most investors won't want the hassle anyway so it would likely sell to a singe owner occupier.

I hadn't actually done the maths but another poster kindly did and 22 years is how long it would take to get to current market value
Imagine what the market value would be in 22 years time,do you think it would be more than the current €1200? i think it would be in my opinion!
So you can add on another decade or so,the above completely rules out your idea.
You can also throw into the mix that if you are relying on rents collapsing in Dublin and the cap being removed to make long term decisions you are in trouble.These things may our may not happen but you couldn't base a strategy on it.

the_syco · 26-10-2020 9:10pm

NeptunesMoon wrote: »

the syco, have a look at the plan here:

I think the measurements may be off, the estate agent said 19m3 where'as the 7.5x3 would make it a little bigger.

the yard can also be used as a private/off street parking space by the way.

The bank will send out an assessor to the property, and possibly deny the mortgage because I'm unsure if the total square footage of the apartment is large enough to be called an apartment?

NeptunesMoon · 07-02-2021 1:34am

Another question on this... if I somehow managed to buy this place, would I be able to rent it out at market rate at any stage because I've already lived here, or would I need to live here a further 2 years from the date of sale to be able to rent it at market rate?

Also, is there any way a friend or someone I trust who can get mortgage approval, could buy it through me so some how allow them to rent it at market rate?

Del2005 wrote: »

What are your plans for the future? Do you plan to have children? Is it worth loosing your 1st time buyer status for a property that doesn't even have a functioning bedroom?

No plans to have children, but I would love a bigger place, for socialising purposes, just to be able to ask people around without it feeling so crammed.

Good point about the first time buyer status, I didn't think of that!

the_syco wrote: »

The bank will send out an assessor to the property, and possibly deny the mortgage because I'm unsure if the total square footage of the apartment is large enough to be called an apartment?

How would anyone have gotten a mortgage for it in the first place though in that case, or how would anyone buy it if it went up for sale?

When did the "substantial change" clause come in with regards to having enough of a renovation to be able to rent it at market rate? Would redoing the floors and the kitchen cupboards and giving it a fresh coat of paint be enough for an investor to be able to then rent it at market rate?

Cheers again everyone!

Graham · 07-02-2021 1:46am

NeptunesMoon wrote: »

Another question on this... if I somehow managed to buy this place, would I be able to rent it out at market rate at any stage because I've already lived here, or would I need to live here a further 2 years from the date of sale to be able to rent it at market rate!

You are stuck with the RPZ limits unless there's been no tenancy for 2 years.

NeptunesMoon wrote: »

Also, is there any way a friend or someone I trust who can get mortgage approval, could buy it through me so some how allow them to rent it at market rate?

No, see previous answer.

NeptunesMoon wrote: »

How would anyone have gotten a mortgage for it in the first place though in that case, or how would anyone buy it if it went up for sale?

Cash buyer

NeptunesMoon wrote: »

When did the "substantial change" clause come in with regards to having enough of a renovation to be able to rent it at market rate?

A few years back.

NeptunesMoon wrote: »

Would redoing the floors and the kitchen cupboards and giving it a fresh coat of paint be enough for an investor to be able to then rent it at market rate?

Almost certainly no. The definition is something along the lines of a substantial change in the nature of the property. E.g. adding a bedroom, additional living space.

Some other changes or a combination of changes may qualify. The RTB has a guidance document with further detail.

Some other useful info here: https://www.rtb.ie/during-a-tenancy/rent-review-in-a-rent-pressure-zone-rpz/exemptions-to-the-rent-pressure-zone-rental-cap

NeptunesMoon · 07-02-2021 2:43am

cheers for all that, alright so I basically need to stop being a "tenant", and by buying it, I'm no longer a tenant, but can just continue on here for 2 years paying a mortgage instead of rent, and then after 2 years I'm free to do what I want, stay on or move somewhere else and charge the market value for this place to help me rent somewhere else for example?

Interesting about the substantial changes really, I don't think it's possible to do such changes on this property.

Opportunity to buy after landlord passed away?

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