Getting a second mortgage, rent out first home

barnabyjones77 · 14-07-2023 06:22PM

https://www.boards.ie/discussion/comment/120851124#Comment_120851124

What is the interest rate differential on a rental property compared to standard? Can you get a fixed term?

J_1980 · 14-07-2023 06:52PM

Always keep your property.

wealthy people in Ireland always own multiple ones and thanks to the general left wing sentiment expect further population in increases and favourable rental market (as a landlord).

Caranica · 14-07-2023 07:05PM

https://www.boards.ie/discussion/comment/120852139#Comment_120852139

You've clearly never had nightmare tenants. The day we sold our rented property was one of the happiest days of my life

3DataModem · 15-07-2023 12:25PM

I've done in multiple times OP. It was the "done thing" in the late 90's early 2000's to keep your old gaff when you moved and rent it out.

It can be a good idea, but depends on the details;

Think about what rent you get. Then half that for tax. Then knock about 20% off that for maintenance and other costs. Then deduct the mortgage. The result is probably negative and that's OK if you can afford it. If that amount is less than the amount you are clearing off your mortgage each month then you are making money (although it won't feel like that).
Get a letting agent. Get a letting agent. Get a letting agent. "But you can do it yourself" you'll say. "Why waste 10% of the rent". Next time you are snuggled up on a Sunday night of a bank holiday and you've had a glass and a half of wine think about what would happen if your phone rang with a burst pipe. Get a letting agent. My advice is get one (a) who does a lot of lettings locally and (b) is local.

DubCount · 15-07-2023 01:59PM

https://www.boards.ie/discussion/comment/120854225#Comment_120854225

I agree with the agent point.

On the financial side, you need to be able to sustain being able to pay the mortgage if you have a void period or if your tenant stops paying or falls behind in rent etc.. The question is can you afford the mortgage even if you are not receiving any income for a period.

herbalplants · 15-07-2023 06:01PM

https://www.boards.ie/discussion/comment/120854225#Comment_120854225

Also, maybe that Sunday you are snuggle up with a glass of wine, your agent is also snuggled up with a glass of wine and won't answer his phone in an event of burst pipe.

o1s1n · 15-07-2023 06:06PM

https://www.boards.ie/discussion/comment/120852008#Comment_120852008

Up to 7.5% at the moment, so twice the house interest rate.

No fixed options available no :(

newmember2 · 15-07-2023 06:08PM

https://www.boards.ie/discussion/comment/109977686#Comment_109977686

HAP rent is not guaranteed, if the tenant ceases making their contribution to the council, the council will cease paying the landlord

They changed that no, or has the change not been implemented yet?

3DataModem · 15-07-2023 09:16PM

https://www.boards.ie/discussion/comment/120855666#Comment_120855666

Yeah OP don't get a **** agent.

JCN12 · 16-07-2023 08:10AM

Irish people just don't learn seemingly. 🤔

barnabyjones77 · 17-07-2023 10:46AM

https://www.boards.ie/discussion/comment/120855684#Comment_120855684

Ugh. That's a game changer. I'm on a 2.3% fixed at the minute, which i took out about2 years ago and i know the going rate is higher now. I naively thought the same principles would apply for a 2nd mortgage and id be able to fix around 3 or 3.5%. Anything over 4% probably wouldn't make sense income v outgoings wise.

In my experience as a renter, agents are fairly useless too. I'd be optimistic i could source good tenants and manage it myself. My apartment is beside a hospital so I'd be hoping for some trustworthy doctors or nurses. Again, maybe I'm very naive based on some "renter nightmare" stories on this!

o1s1n · 17-07-2023 10:58AM

https://www.boards.ie/discussion/comment/120861834#Comment_120861834

Do keep in mind that the interest on your BTL mortgage is 100% tax deductible though.

So yes, it's painful seeing the mortgage amount increasing with the rates going up and the rental income staying relatively unchangeable due to rent pressure zone limitations - however once the end of the year hits and you are doing your tax returns, you can knock absolute lumps off of the amount of tax owed with the mortgage interest relief.

whacker1982 · 16-08-2023 11:19PM

Thinking of going down this road myself, only difference is to relocate abroad, and rent out my home and second mortgaged house and only pay 20% tax on the properties

Vinny Cleary 25 · 17-08-2023 09:17AM

https://www.boards.ie/discussion/comment/109985279#Comment_109985279

That’ll be raided in the future to keep paying teachers their cushy pensions, entitlements and salaries.

Put the extra money into a pension plan. Especially if your employer is paying contributions.

DubCount · 17-08-2023 11:06AM

https://www.boards.ie/discussion/comment/120988604#Comment_120988604

Where are you emigrating to that you will only be paying 20% tax on your profits?

You would need to pay Irish tax first, then be assessed for tax in your new country of tax residence taking a credit for any Irish tax paid (assuming its somewhere with a standard double tax treaty with Ireland). Not many places where you will have a job and a marginal tax rate of 20% on additional income.

I also assume you are aware of requirements on your tenants to withhold tax on rent payments if you become a non0resident landlord.

Getting a second mortgage, rent out first home

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