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Need home ASAP, have 170000 cash

  • 11-03-2019 8:33am
    #1
    Registered Users Posts: 22 MrWyatt


    I have saved up 170K but am unemployed so can't get a mortgage. I have two young kids who go to school on the southside. I don't have enough to buy a family home close enough to the schools. I am thinking of buying an investment property to let out, possibly at auction. Some of these properties are tenanted already, this would allow me to earn an income from the property straight away. I don't have much of an income at the moment and am a first time buyer. Is there a way to do this without losing my first time buyer stamp duty by setting up a company to do the investment? Is this a good idea or is there a better way to invest my money? If I don't invest and continue to pay the high rent I will never have a home for my kids.


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Comments

  • Closed Accounts Posts: 4,121 ✭✭✭amcalester


    You need to get a job and then apply for a mortgage.


  • Registered Users Posts: 12,077 ✭✭✭✭Gael23


    You need to put the money away until you are in a position to get a mortgage. Hen you do you will be able to get a nice home for a relatively modest mortgage.


  • Registered Users Posts: 22 MrWyatt


    I am a single dad with no family to help and I have health issues. Having the kids minded after school is too expensive and even if I work part time, under the current regulations with two dependent children I can't get a mortgage.


  • Registered Users Posts: 4,695 ✭✭✭December2012


    Just so you know, there is no first time buyer exemption from stamp duty.


  • Registered Users Posts: 4,695 ✭✭✭December2012


    Have you spoke with anybody in your local housing authority about qualifying for social housing?


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  • Registered Users Posts: 22 MrWyatt


    Have you spoke with anybody in your local housing authority about qualifying for social housing?

    Would I qualify for social housing with 170K in the bank?


  • Registered Users Posts: 6,766 ✭✭✭RossieMan


    MrWyatt wrote:
    Would I qualify for social housing with 170K in the bank?

    No, unless you've exceptional circumstances.


  • Closed Accounts Posts: 382 ✭✭Giveaway


    RossieMan wrote: »
    No, unless you've exceptional circumstances.

    Also after 9 months unemployment benefits are means tested.you are allowed some savings.
    Sorry did not see the post on personal circunstances. Good luck


  • Registered Users Posts: 217 ✭✭bono_v


    You could by a 3 bed for 160,000 in Dublin. Would be an ex council house in probably not the best council estate.
    You could then rent it to a family for €1800 a month.


  • Registered Users Posts: 4,714 ✭✭✭Xterminator


    Hi Op

    why the rush to get a mortgage? Why can you not move where the homes cost less down in rural ireland you would get a house for 170k no bother.

    PS an investment property could break your heart. Being a landlords not for the faint hearted. Why not invest it with a good broker in a low risk investment? It hard to work out why you need to spend it?


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  • Registered Users Posts: 22 MrWyatt


    bono_v wrote: »
    You could by a 3 bed for 160,000 in Dublin. Would be an ex council house in probably not the best council estate.
    You could then rent it to a family for €1800 a month.




    Thanks Bono, would I pay much tax on that? Would there be other expenses? I also presume I would have to pay 10k stamp duty on that. Would it make sense to set up a company to own the property? I probably would not get or charge 1800€ but more like 1400€ max.


  • Registered Users Posts: 801 ✭✭✭lucast2007us


    MrWyatt wrote:
    Thanks Bono, would I pay much tax on that? Would there be other expenses? I also presume I would have to pay 10k stamp duty on that. Would it make sense to set up a company to own the property? I probably would not get or charge 1800€ but more like 1400€ max.


    You would pay 1,600 stamp duty on a house costing 160,000


  • Registered Users Posts: 22 MrWyatt


    Hi Op

    why the rush to get a mortgage? Why can you not move where the homes cost less down in rural ireland you would get a house for 170k no bother.

    PS an investment property could break your heart. Being a landlords not for the faint hearted. Why not invest it with a good broker in a low risk investment? It hard to work out why you need to spend it?


    No rush to get a mortgage, I can't get one, I tried. I'd like to try going down the investment property anyway, I would like to understand the risk from a financial perspective. Where do I find a good broker for a low risk investment? Are the returns really comparable to the 12k a year I would get from buying a 170k property?


  • Registered Users Posts: 22 MrWyatt


    lucast2007us would it not be 6% stamp duty if it's a buy to let?


  • Closed Accounts Posts: 4,121 ✭✭✭amcalester


    How do you afford to live day to day?

    If you're receiving benefits then will the means test not wipe out any payment you get? €170,000 gives you a weekly means of €550.

    Surely you should be looking to move out of Dublin and live somewhere cheaper with a house fully paid off as this is exempt from the means test.


  • Registered Users Posts: 3,205 ✭✭✭cruizer101


    I don't see the point in buying an investment property to get rent to help pay your own rent.
    Buying your own property to live in is the best investment. If it means moving school for the kids so be it, if they are young moves like that are easier.
    With your own home and no rent/mortgage even a modest income is makes it easy enough enough to get by.
    You can always look to upgrade down the line.
    First time buyer status isn't worth that much these days especially if buying with cash.
    Have a safe secure roof over your heads would be my advice.
    You may be able to get a credit union loan for say 10-20k to help furnish and that so most of saving can go towards the property itself.


  • Registered Users Posts: 770 ✭✭✭afkasurfjunkie


    Stop looking in the most expensive part of the entire country for a home. You have no job or family to help so no tie to the area. Get out of Dublin and look for a job elsewhere.


  • Closed Accounts Posts: 7,070 ✭✭✭Franz Von Peppercorn


    Buying a personal house exempts you from the means test. The means test is ludicrous anyway for people who have paid in.


  • Registered Users Posts: 28,006 ✭✭✭✭AndrewJRenko


    You would be crazy to invest your entire lump sum in residential property. That is a very risky investment strategy.


  • Closed Accounts Posts: 1,841 ✭✭✭Squatter


    Buying a personal house exempts you from the means test. The means test is ludicrous anyway for people who have paid in.

    Means Test isn't applied for PRSI-related Benefits. They are paid out on the basis of PRSI contributions, irrespective of means.


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  • Registered Users Posts: 610 ✭✭✭JustMe,K


    is there a particular reason why you wouldnt just buy a home for yourself in a place where you can afford? You are in quite a privileged position where you could buy a house outright, if its outside a major city. Not working also gives you flexibility a lot of people dont have. I wouldnt be buying a property as an investment, as a landlord you will have to retain a buffer for repairs etc (as you wont have it from income), and you might struggle to get vacant possession if you want to sell or move into the property.

    Also, if you are currently in a position where your rent is being paid for you, the money you have should absolutely be treated as means and reduce whatever benefits are available to you


  • Registered Users Posts: 37,295 ✭✭✭✭the_syco


    MrWyatt wrote: »
    I am a single dad with no family to help and I have health issues
    For this reason, why not buy the house and live in it, rather than rent from it, and be possibly left homeless whilst having to maintain the house or get fined by the tenants via the RTB for failure to keep the house?

    Also, if buying at an auction, it's because it probably because it couldn't be bought by someone with a mortgage, either because it's in a very bad area, or it may need expensive things fixed.


  • Registered Users Posts: 25,594 ✭✭✭✭Mrs OBumble


    Your kids need to change schools. Find a town you can afford and buy there for about 150k including legal and moving costs The other 20k is your buffer for fixing the boiler etc amd it won't disqualify you from welfare or medical card.

    If you use the cash to buy a property you don't live in, the welfare and medical card means testing will assign value to it of a lot more than you get in rent less expenses. So you won't get any state help. Even if the tenant stops paying rent, because the means test is based on market value not actual income.


  • Registered Users Posts: 24,135 ✭✭✭✭Sleepy


    Lots of houses in Louth you could buy outright at that level OP.


  • Registered Users Posts: 22 MrWyatt


    You would be crazy to invest your entire lump sum in residential property. That is a very risky investment strategy.
    Please tell me more about a good alternative investment strategy. Also why would it be such a risky investment?


  • Registered Users Posts: 37,295 ✭✭✭✭the_syco


    MrWyatt wrote: »
    Please tell me more about a good alternative investment strategy. Also why would it be such a risky investment?
    You'll get taxed on the amount you rent it out for, and be liable to fix anything that goes wrong in the house. Should they stop paying rent, you'll need to go through RTB to evict them, and this can cost thousands. For 170k, I doubt you'll be buying in a nice area.


  • Registered Users Posts: 10,301 ✭✭✭✭gerrybbadd


    Stop looking in the most expensive part of the entire country for a home. You have no job or family to help so no tie to the area. Get out of Dublin and look for a job elsewhere.

    This.

    You could buy many lovely houses outright anywhere in the country and have plenty left over. If you aren't tied to South Side Dublin, what's keeping you there?


  • Registered Users Posts: 11,460 ✭✭✭✭Ush1


    MrWyatt wrote: »
    Please tell me more about a good alternative investment strategy. Also why would it be such a risky investment?

    The good alternative would be to invest in a home for yourself and kids, mortgage free.

    You could possibly avail of the rent a room scheme if you felt comfortable with that and get an income tax free.

    But the obvious answer is you need to look outside of South Dublin (maybe Dublin altogether). You might get a townhouse or apartment somewhere in commuting distance of Dublin but if you aren't going to be working, why bother?

    Fella I know sent me a link for a house for 65k in Edgeworthstown. You could buy two!:D


  • Closed Accounts Posts: 18,268 ✭✭✭✭ Jayla Delightful Pollywog


    Lots of reasonable houses in Tralee for under 170k.
    Are you prepared to move?


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  • Registered Users Posts: 1,679 ✭✭✭MAJJ


    the_syco wrote: »
    You'll get taxed on the amount you rent it out for, and be liable to fix anything that goes wrong in the house. Should they stop paying rent, you'll need to go through RTB to evict them, and this can cost thousands. For 170k, I doubt you'll be buying in a nice area.

    I completely agree with the post above. I know it's not likely what you want to hear, but if you want security for your family then moving to a more affordable location seems to me your best option.


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