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€100k cash to invest in property - what and where?

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  • 10-07-2015 7:06pm
    #1
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭


    Heres the senario ... A friend wants to invest in property in Ireland. Knows about shares, bonds etc etc. She wants to invest in residential 100k no mortgage. Im thinking Dublin 1 bed / 2 bed apt. Where else would give a good return in residential. She has no dependants.


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    #2
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    handlemaster wrote: »
    Heres the senario ... A friend wants to invest in property in Ireland. Knows about shares, bonds etc etc. She wants to invest in residential 100k no mortgage. Im thinking Dublin 1 bed / 2 bed apt. Where else would give a good return in residential. She has no dependants.

    Can't think of any part of Dublin she can get a property at that price that would actually rent out? It's a very low budget and with no mortgage interest to write off she'd be fleeced by the tax man


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    #3
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    athtrasna wrote: »
    Can't think of any part of Dublin she can get a property at that price that would actually rent out? It's a very low budget and with no mortgage interest to write off she'd be fleeced by the tax man


    In fairness there are a few

    http://www.daft.ie/dublin-city/houses-for-sale/?s[mnp]=50000&s[mxp]=100000


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    #4
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    handlemaster wrote: »
    In fairness there are a few

    http://www.daft.ie/dublin-city/houses-for-sale/?s[mnp]=50000&s[mxp]=100000

    The properties exist. My issue was that they may not rent especially easily unless she was to go down the ras route. Also bear in mind management fees for apartments.


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    #5
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    athtrasna wrote: »
    The properties exist. My issue was that they may not rent especially easily unless she was to go down the ras route. Also bear in mind management fees for apartments.

    True.


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    #6
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    How about outside of Dublin.


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    #7
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,314 CMod ✭✭✭✭Pawwed Rig


    It would be a very poor investment decision imo unless she is hoping for a capital gain windfall at some future point.


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    #8
    Edke
    Registered Users Posts: 3 ✭Edke


    Pawwed Rig wrote: »
    It would be a very poor investment decision imo unless she is hoping for a capital gain windfall at some future point.

    That's interesting as I am in a situation where I could pay down my current 250k fixed rate mortgage with AIB or try invest 100k in buy-to-let property. My issue is if I don't have a mortgage there's no pressure to save or invest. Buy to let mortgage forces me to curtail spending.


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    #9
    Villa05
    Registered Users Posts: 4,513 ✭✭✭Villa05


    Limerick,
    Major shortage of rental stock and only hit bottom last year


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    #10
    Villa05
    Registered Users Posts: 4,513 ✭✭✭Villa05


    Edke wrote:
    That's interesting as I am in a situation where I could pay down my current 250k fixed rate mortgage with AIB or try invest 100k in buy-to-let property. My issue is if I don't have a mortgage there's no pressure to save or invest. Buy to let mortgage forces me to curtail spending.

    Paying down your mortgage is a risk and tax free return. You would need to be getting close to 10% returns to compete with that


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    #11
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,314 CMod ✭✭✭✭Pawwed Rig


    Maximising pension contributions would be much more tax efficient and much less hassle. You save tax at the higher rate and the gains in the fund are not subject to cgt.


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    #12
    Edke
    Registered Users Posts: 3 ✭Edke


    Villa05 wrote: »
    Paying down your mortgage is a risk and tax free return. You would need to be getting close to 10% returns to compete with that

    I should have added more details. I'm working abroad and have the property rented. The interest offsets the rental income so I don't get hit with any income tax right now. If I pay down 100k I'll start to take a income tax hit I believe. Not sure if it would be significant.


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    #13
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Edke wrote: »
    I should have added more details. I'm working abroad and have the property rented. The interest offsets the rental income so I don't get hit with any income tax right now. If I pay down 100k I'll start to take a income tax hit I believe. Not sure if it would be significant.

    As you're abroad you wont have any personal allowances and you will be hit for income tax, prsi and social charge. You will end up with less than half the gross rental.

    If you are in a country with a good dividend or CGT regime, consider shares as these won't be subject to Irish tax (just the local tax which may be less than the irish).


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    #14
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,314 CMod ✭✭✭✭Pawwed Rig


    Deleted User wrote: »
    As you're abroad you wont have any personal allowances and you will be hit for income tax, prsi and social charge. You will end up with less than half the gross rental.
    Would be unlikely to pay tax at the marginal rate though. More likely 20% + a couple of % USC


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    #15
    marathonic
    Registered Users Posts: 1,662 ✭✭✭marathonic


    [Deleted User] wrote: »
    As you're abroad you wont have any personal allowances and you will be hit for income tax, prsi and social charge. You will end up with less than half the gross rental.

    If you are in a country with a good dividend or CGT regime, consider shares as these won't be subject to Irish tax (just the local tax which may be less than the irish).


    No USC if Irish-only income is below the threshold (I believe it's about €11k-€12k).

    No PRSI as a non-resident.

    Entitled to a percentage of the personal allowance depending on the percentage of your Irish income in relation to your total worldwide income.

    Income tax is calculated on the above basis. You then get a credit for Irish tax paid against the tax due in the country in which you reside - assuming it's a country with a double-taxation treaty such as the UK.


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