Roughly how much would be earned from a monthly rent of €2,200 ?

circular flexing · 30-07-2020 6:57pm

St1mpMeister wrote: »

Would outsourcing this to an agency to manage offset some of these issues?

I'd probably want to meet the tenants to vet them before they moved in, but after that I could give it to an agency to manage.

The property is in a high demand area so I suspect no issues getting it rented.

Also just to be clear, the €500 per month is something I could pay myself without relying on the rent, so downtime between tenants is fine or having some periods where I end up with nothing due to repairs etc, but it's just a nice additional income for the times when it does work out.

Using an agency will just eat into your profit and won't really guarantee perfect tenants. Typical agencies will charge 8% of rent (or one month rent) and you would still have to pay for the repairs.

IMO if you have some money to invest long term then just invest in some mutual funds or ETFs. They come with less risk and are more liquid than a house.

ExMachina1000 · 30-07-2020 7:00pm

Pkiernan wrote: »

If you're already paying the marginal rate, then assume 53% tax on the income.

You can deduct mortgage interest if any, repairs, insurance and management company fees if applicable.

Highway robbery as they say. Nordic level taxation in return for 3rd world level public services

0gac3yjefb5sv7 · 30-07-2020 7:05pm

Samuel T. Cogley wrote: »

There have been brilliant times to get into the market and there will be again. Cash buyer at the depths of a recession especially if there is a break on CAT is one of them.

In a property bubble when evictions have been banned is not a good time to become a LL. The legislative backdrop has been getting worse for years hence why people advise prudence.

While worse than hell might be an exaggeration, it's a constant worry - even with good tenants and very stressful if you get someone who doesn't pay the rent and is probably trashing the place. Delinquent tenants exist in all segments of the market.

I'm open to correction on the legal costs but a full blown eviction taking 18 months is what €10K? Damage can be anyone's guess. Zero chance of recovery from the tenant. Fine if you've the cash flow and contingency fund but many people go into this with neither.

When property prices were low, so was rent. What about people who get good tenants too that have respect for the place and stay for years?

Samuel T. Cogley · 30-07-2020 7:10pm

MattS1 wrote: »

When property prices were low, so was rent. What about people who get good tenants too that have respect for the place and stay for years?

But you knew you were going to see capital appreciation.

I'd say the vast majority of tenancies are hassle free good tenants but it's always at the back of your mind and a risk. Unless you're getting into the game for other reasons one would assume you're looking for the best possible return on investment. Once risk is factored in - is property in the current climate the best investment? I can't answer that, but I would firstly be asking the question and secondly not relying on boards to find the answer.

Don't get me wrong Boards isn't a bad starting place but proper financial advice is a must.

St1mpMeister · 30-07-2020 7:32pm

circular flexing wrote: »

Using an agency will just eat into your profit and won't really guarantee perfect tenants. Typical agencies will charge 8% of rent (or one month rent) and you would still have to pay for the repairs.

IMO if you have some money to invest long term then just invest in some mutual funds or ETFs. They come with less risk and are more liquid than a house.

What's to say I don't?

The 2nd property for €500 pm isn't an investment, it would be a home. It's cheap because it's well out in the schticks. The 1st property is an investment.

I'm only estimating 2,200 per month.. I think in fact that my neighbours are paying 2,800.

If I get €500 out of that per month I'll be satisfied. I'm not in it for the money, it's just to ensure it's not left empty.

It needs to be rented rather than left empty. It's definitely not going to be sold as it's appreciating year on year.

Sheep Shagger · 30-07-2020 9:38pm

circular flexing wrote: »

Using an agency will just eat into your profit and won't really guarantee perfect tenants. Typical agencies will charge 8% of rent (or one month rent) and you would still have to pay for the repairs.

Agency fees are a fully deductible expense.

circular flexing · 30-07-2020 10:15pm

St1mpMeister wrote: »

What's to say I don't?

The 2nd property for €500 pm isn't an investment, it would be a home. It's cheap because it's well out in the schticks. The 1st property is an investment.

I'm only estimating 2,200 per month.. I think in fact that my neighbours are paying 2,800.

If I get €500 out of that per month I'll be satisfied. I'm not in it for the money, it's just to ensure it's not left empty.

It needs to be rented rather than left empty. It's definitely not going to be sold as it's appreciating year on year.

So you want to rent out home A and use the rent to pay the mortgage on home B?

Having being a landlord I tend to look at the downside a bit more. Sure you can make an easy 500 a month but the potential downside is ending up with bad tenants who don't pay rent and who cause damage to the house and you can't really predict who the good/bad tenants will be. So even though the asset is appreciating in value, it could still cost a lot in cashflow. If the damage is bad enough the asset might be worth 0 as no one will buy it. As a single property landlord, the odds are stacked against you these days imo.

Sheep Shagger · 31-07-2020 12:08am

circular flexing wrote: »

So you want to rent out home A and use the rent to pay the mortgage on home B?

Having being a landlord I tend to look at the downside a bit more. Sure you can make an easy 500 a month but the potential downside is ending up with bad tenants who don't pay rent and who cause damage to the house and you can't really predict who the good/bad tenants will be. So even though the asset is appreciating in value, it could still cost a lot in cashflow. If the damage is bad enough the asset might be worth 0 as no one will buy it. As a single property landlord, the odds are stacked against you these days imo.

Would agree with this.

As an accidental landlord there is no way i'd choose to go into the rental sector. There are other options you should explore.

If you still feel it is for you then go ahead but it certainly isn't stressfree or 'easy money'. I suspect there are a load of landlords not declaring rental income as they think they are not making a profit- Revenues definition of profit is different to most.

Tenants also have a disproportionate level of rights, these might be warranted against a professional landlord of which some are unscrupulous, but not a one property landlord being taxed as additional income over PAYE who are just trying to cover their costs given the situation they are in.

Cuddlesworth · 31-07-2020 9:05am

St1mpMeister wrote: »

Would outsourcing this to an agency to manage offset some of these issues?

Personally, I would never go with a management agency. The reason is pretty simple, when the **** hits the fan its your problem not theirs. Their contract will simply state, securing a tenant and managing the maintenance of the property. None of that includes eviction, recovery of funds or even responsibility for bringing in the bad tenant etc.

Which means their incentive is to fill the property as quickly as possible with the least amount of work. In practise this means the majority of them will quite literally hand the property to the first person who calls. And that's a issue because there is a handful of people out there who have made careers out of getting into property's and living rent free.

Eric Cartman · 31-07-2020 10:26am

rule of thumb is the rent has to be twice the mortgage for the property to wash its own face. After tax you'll only keep half the rent payment.

Yyhhuuu · 31-07-2020 10:54am

Cuddlesworth wrote: »

Personally, I would never go with a management agency. The reason is pretty simple, when the **** hits the fan its your problem not theirs. Their contract will simply state, securing a tenant and managing the maintenance of the property. None of that includes eviction, recovery of funds or even responsibility for bringing in the bad tenant etc.

Which means their incentive is to fill the property as quickly as possible with the least amount of work. In practise this means the majority of them will quite literally hand the property to the first person who calls. And that's a issue because there is a handful of people out there who have made careers out of getting into property's and living rent free.

People think management agencies remove all hassle, they dont. The agent will still contact you to let you know a problem has arisen e.g. requiring a tradesman. There will be no incentive to hire the best or best priced tradesman to complete the work and some agents may even charge a premium themselves. It can be easier said than done getting rid of some agents. They are legally obliged to get you to sign a standard letting PSRA contract but I have heard cases of them unilaterally installing themselves for 3+ years on such agreements without explicit instructions to this effect from landlord.

Do they actually hand the property to the first person in the door. If you hire them to simply obtain the tenant and not manage them I suppose they couldnt care less who they get as they have their money irrespective of what happens afterwards?

St1mpMeister · 31-07-2020 10:59am

circular flexing wrote: »

So you want to rent out home A and use the rent to pay the mortgage on home B?

Not strictly, I can pay home B fine without the rent if needs be.

circular flexing wrote: »

you can't really predict who the good/bad tenants will be.

I'd question this. I'm sure it's possible to judge a tenants character when you meet them, and I'd look for past references.

I can afford to be picky as I'm not desperate for the income.

Back Home · 31-07-2020 11:04am

redarmyblues wrote: »

That depends where you are tax resident.

OP this is not a good time to get into the private rental market.

Why not? does it not depend on the individual investors circumstances?

perfectkama · 01-08-2020 7:26am

invest in something less risky buy apple and gold

mrcheez · 01-08-2020 1:08pm

perfectkama wrote: »

invest in something less risky buy apple and gold

Lol Gold is probably the riskiest thing you can buy ... Take it from someone who knows

dubrov · 01-08-2020 1:37pm

perfectkama wrote:

invest in something less risky buy apple and gold

I'm hoping you are joking

perfectkama · 01-08-2020 3:41pm

ok not gold tho am invest with a miner but risky, so well at least apple/amzn last 2 years no regrets property BTL "your havin alaugh"

0gac3yjefb5sv7 · 01-08-2020 5:15pm

Go for it OP. It will pay off in the end.

Irish_peppa · 05-08-2020 7:23am

Eric Cartman wrote: »

rule of thumb is the rent has to be twice the mortgage for the property to wash its own face. After tax you'll only keep half the rent payment.

Im not a property investor or landlord but a friend is and the way he looks at it, He makes roughly 2k a month on each of his properties, his mortgage is approx 1000 on each he pays his taxes he still makes about 150 a week profit from each pad. BUT after 30 years (his retirememnt age) he effectively has properties paid for ready for sale fully paid off. So long term isnt it a sweet deal? He has about 20 years to go on his 3 investment properties and that will be worth about even at current house prices over 1 Million Euros. They could be well worth 2 millions plus So he would have made a killing long term.

DubCount · 05-08-2020 8:30am

Irish_peppa wrote: »

Im not a property investor or landlord but a friend is and the way he looks at it, He makes roughly 2k a month on each of his properties, his mortgage is approx 1000 on each he pays his taxes he still makes about 150 a week profit from each pad. BUT after 30 years (his retirememnt age) he effectively has properties paid for ready for sale fully paid off. So long term isnt it a sweet deal? He has about 20 years to go on his 3 investment properties and that will be worth about even at current house prices over 1 Million Euros. They could be well worth 2 millions plus So he would have made a killing long term.

Ah the Sirens Call to Irish residential property. Sounds sweet, sounds appealing, but take care not to be smashed on the rocks while you follow the call.

The back of a fag packet maths that you'll pay off the mortgage over 20-30 years and own a property outright so you can make a killing in the long run just does not hold up when you look at the risk v return.

A typical yield (Gross rent / property cost) on an Irish property is about 8%. Maybe if you hunt around, you might get up to 10%. Sometimes you're only looking at 5-6%. The interest rate on a Buy2Let mortgage is about 4.5%. A cash buyer is making about 8% before costs and takes. The mortgage element is making about 3.5% before costs and taxes.

That's better than you'll do with deposit interest, but is not better than other risk investments such as stocks and shares. Speaking of risk, consider what happens your finances if you get a rogue tenant along your 30 year journey to your cash cow. 2 years of a non-paying tenant, even if your mortgage is 1k per month, is 24k of negative cash flow. Add in damage to property and legal costs, and you may have to sustain a 35k+ loss along the journey.

Investing 500 per month in anything over 30 years will leave you sitting pretty at the end of it.

OP. Go talk to an independent financial advisor. For a small fee they will discuss tax efficient investments such as pensions that will be better for you and your individual circumstances than putting your entire financial stability in the hands of some random tenant that may make an omelette out of your nest egg.

Irish_peppa · 05-08-2020 9:03am

DubCount wrote: »

Ah the Sirens Call to Irish residential property. Sounds sweet, sounds appealing, but take care not to be smashed on the rocks while you follow the call.

The back of a fag packet maths that you'll pay off the mortgage over 20-30 years and own a property outright so you can make a killing in the long run just does not hold up when you look at the risk v return.

A typical yield (Gross rent / property cost) on an Irish property is about 8%. Maybe if you hunt around, you might get up to 10%. Sometimes you're only looking at 5-6%. The interest rate on a Buy2Let mortgage is about 4.5%. A cash buyer is making about 8% before costs and takes. The mortgage element is making about 3.5% before costs and taxes.

That's better than you'll do with deposit interest, but is not better than other risk investments such as stocks and shares. Speaking of risk, consider what happens your finances if you get a rogue tenant along your 30 year journey to your cash cow. 2 years of a non-paying tenant, even if your mortgage is 1k per month, is 24k of negative cash flow. Add in damage to property and legal costs, and you may have to sustain a 35k+ loss along the journey.

Investing 500 per month in anything over 30 years will leave you sitting pretty at the end of it.

OP. Go talk to an independent financial advisor. For a small fee they will discuss tax efficient investments such as pensions that will be better for you and your individual circumstances than putting your entire financial stability in the hands of some random tenant that may make an omelette out of your nest egg.

Oh jesus i wont be investing in property ! I had some spare cash but there was no way i wanted to be chasing tenants I rented rooms in my own house that was bad enough i can only imagine chasing tenants who live an hours drive away if not more.
PS that same landlord with 4 properties (4 apartments all in same estate) His plan was to flip 2 or 3 of his apartments after 10 years to afford a nice 4 or 5 bed detached in Greater Dublin BUT his investments hamstrung him after the property crash so he is stuck now with 4 apartments. I can see that he likes to put a spin on it but that was never his plan to be stuck in an apartment at 45 with a wife and kid. I think his saving grace they are all on trackers. No landlord and property investment wouldnt be my thing

St1mpMeister · 05-08-2020 10:43am

Oh boy... this is always a problem with boards once it reaches around 30 posts upwards, it goes completely off topic.

I was not asking about an investment, I was talking about what to do with an EXISTING property once I move into this new cheaper one.

I'm not going to sell it, and I'm not going to leave it empty.

Hence rent it... and the question was "How much would I expect to get if renting it".

The answer was that it would roughly cover the cost of the mortgage of the new place I'm moving into, so win win. Anyway end of topic.

sweet_trip · 05-08-2020 10:47am

Depends on how many bunk beds you can cram into the kitchen.

davindub · 05-08-2020 11:10am

DubCount wrote: »

Ah the Sirens Call to Irish residential property. Sounds sweet, sounds appealing, but take care not to be smashed on the rocks while you follow the call.

The back of a fag packet maths that you'll pay off the mortgage over 20-30 years and own a property outright so you can make a killing in the long run just does not hold up when you look at the risk v return.

A typical yield (Gross rent / property cost) on an Irish property is about 8%. Maybe if you hunt around, you might get up to 10%. Sometimes you're only looking at 5-6%. The interest rate on a Buy2Let mortgage is about 4.5%. A cash buyer is making about 8% before costs and takes. The mortgage element is making about 3.5% before costs and taxes.

That's better than you'll do with deposit interest, but is not better than other risk investments such as stocks and shares. Speaking of risk, consider what happens your finances if you get a rogue tenant along your 30 year journey to your cash cow. 2 years of a non-paying tenant, even if your mortgage is 1k per month, is 24k of negative cash flow. Add in damage to property and legal costs, and you may have to sustain a 35k+ loss along the journey.

Investing 500 per month in anything over 30 years will leave you sitting pretty at the end of it.

OP. Go talk to an independent financial advisor. For a small fee they will discuss tax efficient investments such as pensions that will be better for you and your individual circumstances than putting your entire financial stability in the hands of some random tenant that may make an omelette out of your nest egg.

Do you know any banks offering finance to purchase shares?

Your ROI on property is based on geared funds but your ROI on shares is based on invested funds only. That opens up a gulf and that is why property is attractive to small investors.

DubCount · 05-08-2020 11:22am

St1mpMeister wrote: »

Oh boy... this is always a problem with boards once it reaches around 30 posts upwards, it goes completely off topic.

I was not asking about an investment, I was talking about what to do with an EXISTING property once I move into this new cheaper one.

I'm not going to sell it, and I'm not going to leave it empty.

Hence rent it... and the question was "How much would I expect to get if renting it".

The answer was that it would roughly cover the cost of the mortgage of the new place I'm moving into, so win win. Anyway end of topic.

This was completely on topic. Why not sell? Just because you already own the property already does not change the investment decision. You might be better off selling and making a different investment or even buying a different property with a better yield etc.

If you've already decided what to do, good luck to you. You will be one of a very select group of people deciding to become a landlord in the current market when you don't need to.

St1mpMeister · 05-08-2020 11:46am

DubCount wrote: »

This was completely on topic. Why not sell?

Location location location. No way I'm selling it as there's no chance I'd be able to afford it now if I were to try to buy it again, plus the area has gone up in value along with the property.

No ETF investment will be able to match the value appreciation, not to mention the rent income etc.

And before you ask I've also got the whole pension/ETF setup as well sorted separately so not going to invest any more for now.

circular flexing · 10-08-2020 5:49pm

St1mpMeister wrote: »

No ETF investment will be able to match the value appreciation

Just to add this is not true, I'm invested in some funds which would be considered low to medium risk and they are up 20-30% (after fees) in about 3 years. Since 2008, the S&P 500 is up over 300% even after the blip earlier this year. Long term the stock market always beats real estate. You are correct that it doesn't take into account the potential rental income (I do get some dividends through the funds but not 500 a month).

DubCount · 10-08-2020 6:19pm

circular flexing wrote: »

Just to add this is not true, I'm invested in some funds which would be considered low to medium risk and they are up 20-30% (after fees) in about 3 years. Since 2008, the S&P 500 is up over 300% even after the blip earlier this year. Long term the stock market always beats real estate. You are correct that it doesn't take into account the potential rental income (I do get some dividends through the funds but not 500 a month).

Of course you are correct.

OP has his head set on being a LL. He is not interested in helpful investment advice - "Im not going to sell it" is already decided.

You only fully appreciate the downside of being an Irish LL when you've tried it for yourself.

dubrov · 10-08-2020 6:22pm

In fairness, it's hard to match an 8% inflation adjusted return in any asset class of similar risk.

The S&P might be +/-50% next year. It's unlikely the property market will be anywhere near that.

Roughly how much would be earned from a monthly rent of €2,200 ?

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