Boards.ie uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Click here to find out more x
Post Reply  
 
 
Thread Tools Search this Thread
11-03-2019, 15:20   #61
AndrewJRenko
Registered User
 
AndrewJRenko's Avatar
 
Join Date: Nov 2016
Posts: 6,699
Quote:
Originally Posted by dvdman1 View Post
Quote:
Originally Posted by AndrewJRenko View Post
Again, putting all your investment in any one category of asset, whether gold or residential property or whatever is very risky.

OP needs to diversify his investments to reduce risk.
No suggestions here... just fancy bidness talk, the chap isn't looking for investment hes looking for a place to live.

The guy clearly doesn't need to live in the capital, theres plenty of property for 150k mark around the country near other urban centres.
He's seriously considering putting his entire savings into a residential property investment in a boomy market. He's never operated an investment property before.
AndrewJRenko is online now  
Thanks from:
Advertisement
11-03-2019, 15:22   #62
.......
Registered User
 
.......'s Avatar
 
Join Date: Dec 2016
Posts: 7,882
Quote:
Originally Posted by AndrewJRenko View Post
He's seriously considering putting his entire savings into a residential property investment in a boomy market. He's never operated an investment property before.
His entire savings and if he is unemployed and not receiving social welfare then he has NO other source of income.

Really, a terrible idea.
....... is offline  
11-03-2019, 15:31   #63
JimmyMW
Registered User
 
Join Date: Mar 2014
Posts: 467
Quote:
Originally Posted by MrWyatt View Post
I am not on social welfare. I also don't feel the need to justify why I am making the choices that I am making. I am merely asking for practical advice on how to best invest my money to afford a home in the right location for my family. It took a lot of sacrifice to save this money and I'm willing to work hard within my current situation to get us a home, there is really no need to take this personally. And as far as there being lots of parents in Dublin who make things work, well, that's not really true is it. Single parents in Ireland hardly have it easy. There wouldn't be thousands of homeless families if that wasn't the case. Not that I am comparing myself to homeless families - I am well aware that I am lucky to have this money- and that is exactly why I want to make the best decision and why I am looking for opinions on how to best leverage this money. Still in not enough to buy a house outright in any location that we could live in and I have been refused a mortgage.
No one is taking anything personally, you have stated you are unemployed due to health reasons, you have now stated you are not receiving any social welfare payments, you have 170k to invest, if we cannot understand how you are living day to day ie no source of income, how can someone advise you what to do with the 170k, if your currently living off of it and have no other means then investing it is crazy. If you want real advise you need to fully clarify your situation.
JimmyMW is offline  
11-03-2019, 16:46   #64
gar32
Registered User
 
gar32's Avatar
 
Join Date: Jul 2006
Posts: 932
So you could buy a small apartment in the city & rent it short term. If you are not working you could do the cleaning and give keys etc to guests. You could get much more then just renting it out normally. Also you would be just taxed as income tax rate up to €70k at 21% ish if you are a single father. (Check with revenue) You would have to look into this more as some places don't want people renting places out short term. R B & B site or something like that. Good luck with it!!!
gar32 is offline  
Thanks from:
11-03-2019, 17:25   #65
Wesser
Registered User
 
Wesser's Avatar
 
Join Date: Apr 2015
Posts: 1,248
If you want to keep your children's future secure then no better advice than buy-in a house straight out. Consider sligo, beautiful place to live.
A buy to let puts their future as risk as the rental income may fall or drop off completely and then your household has no income so therefore... No accomodation.
Wesser is offline  
Thanks from:
Advertisement
11-03-2019, 18:03   #66
MrWyatt
Registered User
 
MrWyatt's Avatar
 
Join Date: Nov 2017
Posts: 20
Quote:
Originally Posted by Wesser View Post
If you want to keep your children's future secure then no better advice than buy-in a house straight out. Consider sligo, beautiful place to live.
A buy to let puts their future as risk as the rental income may fall or drop off completely and then your household has no income so therefore... No accomodation.
Surely if rental income falls or drops off completely then I could either sell it or even live in it. Also my rent would be lower if I decided to keep renting. And if prices went down I would still be able to buy another property as that would have gone down too. Except I'd have more money from the rental income or do you really believe that rents will collapse even though there are thousands of homeless people in Dublin? How many homeless people in sligo?

What is the big risk in buying a property to let when you don't have a mortgage to repay, it's not like it's going to be repossessed at any point. It's not like I'm in trouble if the rent doesn't get paid. Worst case scenario I earn nothing, but if money sits in the bank I earn nothing either. Best case scenario and the property increases in value and my tenants pay their rent. Then I might be able to sell and buy the house I actually need.

Last edited by MrWyatt; 11-03-2019 at 18:14.
MrWyatt is offline  
11-03-2019, 18:16   #67
MrWyatt
Registered User
 
MrWyatt's Avatar
 
Join Date: Nov 2017
Posts: 20
Quote:
Originally Posted by gar32 View Post
So you could buy a small apartment in the city & rent it short term. If you are not working you could do the cleaning and give keys etc to guests. You could get much more then just renting it out normally. Also you would be just taxed as income tax rate up to €70k at 21% ish if you are a single father. (Check with revenue) You would have to look into this more as some places don't want people renting places out short term. R B & B site or something like that. Good luck with it!!!
I didn't know about the 21% tax rate, great info!
MrWyatt is offline  
Thanks from:
11-03-2019, 18:21   #68
JDD
Registered User
 
Join Date: Feb 2011
Posts: 294
This is a difficult question. You will not get a two bed apartment for €170k in South County Dublin, which is the minimum size you would need to provide an alternative home for yourself and your two children. So, you will either need to buy in another area of Dublin, or down the country. If you buy down the country, you can't buy a do-er upper and you will need an agent to run it for you. In addition, if circumstances lead to you having to use it as your emergency accommodation, it's not going to be in your kids school area.

What I think you're saying is that you need the security of owning a property, but you can't buy in your area. However, you're happy to keep renting where you are, and if push comes to shove, you'll move into your investment property with your children, even if it's not in your preferred area (which it won't be). So, you'll take the risk that you may have to move areas at some point in the future, but for now you remain where you are.

I don't particularly see any issue with that.

My only concern, and that of other posters, in putting all of your worldly savings into one asset. If you need the money at some point in the future, and you're unfortunate enough to be trying to sell in a depressed market, then you're are guaranteed to lose money.

That being said, you can't live in a diversified bond portfolio. You can in an apartment. And if that's the main reason why you want to invest in property, then it's a no brainer really. You're not going to make any interest in a deposit account. And you may need accommodation during a boom and be unable to buy anything with your €170k. If you want the security now, then I'd say go for it.
JDD is offline  
(2) thanks from:
11-03-2019, 18:36   #69
bleary
Registered User
 
Join Date: Dec 2004
Posts: 486
So the apartment is moved into. Rent stops ,you have to pay solicitors to get tenants moved. Then pay to refurbish it, how?
You have to pay service charges every year, what happens if sinking fund requires additional money. You can't get a buyer without the repairs but you can't afford to repair.
You will lose any means tested payments which you wouldn't with the money in your own home.
You ask about investment strategy that depends how much you would be ok with losing. 90%? 50%, 10% ?
The cash now gives you options, once it's in a property you are looking at 5 years investment time frame to cover stamp and solrs fees.
Then cgt on any gains and tax on the rent, then fees etc .
My advice, but somewhere to live in or buy some prize bonds and cross your fingers
bleary is offline  
Advertisement
11-03-2019, 18:40   #70
Wesser
Registered User
 
Wesser's Avatar
 
Join Date: Apr 2015
Posts: 1,248
Quote:
Originally Posted by MrWyatt View Post
Surely if rental income falls or drops off completely then I could either sell it or even live in it. Also my rent would be lower if I decided to keep renting. And if prices went down I would still be able to buy another property as that would have gone down too. Except I'd have more money from the rental income or do you really believe that rents will collapse even though there are thousands of homeless people in Dublin? How many homeless people in sligo?

What is the big risk in buying a property to let when you don't have a mortgage to repay, it's not like it's going to be repossessed at any point. It's not like I'm in trouble if the rent doesn't get paid. Worst case scenario I earn nothing, but if money sits in the bank I earn nothing either. Best case scenario and the property increases in value and my tenants pay their rent. Then I might be able to sell and buy the house I actually need.
If your rental income drops off or stops completely because you have a tenant who is refusing to pay rent and refusing to leave then you cannot move in.... No

Also your thinking is flawed... If the value of your apartment goes up then so dies the cost of a house go up... so even though your apartment is worth more.....the house is also worth more.....and therefore unreachable.....
Wesser is offline  
11-03-2019, 19:05   #71
dubrov
Registered User
 
Join Date: Jul 2006
Posts: 1,720
OP, if you can't work, 170k is not enough to generate an income that would sustain you.
You would need to go on social welfare.

That rules out an investment as it would affect your means test.

So your only choice is to buy and without a mortgage, it would have to be less than 170k.
South Dublin is not realistic at that level.
dubrov is offline  
11-03-2019, 19:06   #72
JDD
Registered User
 
Join Date: Feb 2011
Posts: 294
I skipped your last sentence Mr Wyatt, and that’s where your plan unravels.

Best case scenario you buy a two bed apartment and you get consistent rental income for the next five years. Forget about the increase in value, that will be offset by the increase in value of a house you want to buy. So you get €1600 a month in rent, which will be taxed, so you’ll come out with about €13k a year. You’ll have to pay a management fee and any maintenance costs, which for arguments sake brings you down to 11k.

If you save all of that, and things remaining equal you sell and now have €225k to buy a house. Which will buy you nothing in Dublin. So you’ll have to move to the country at that stage if you want a house. If your kids are in primary school now, they’ll be nearing secondary or in secondary by then. It’ll be way way tougher to impose a move on them at that stage.

So I’d agree with the other posters. Buy and move now. You’ll save all the money you’re now paying in rent and take none of the risk of defaulting tenants. You’d probably get a better quality of life and your kids will adjust and make friends quicker now than when they’re older.
JDD is offline  
11-03-2019, 19:08   #73
stefanovich
Registered User
 
Join Date: Mar 2010
Posts: 3,076
OPs dream of becoming a property magnate is getting decimated here.
stefanovich is offline  
11-03-2019, 20:43   #74
AndrewJRenko
Registered User
 
AndrewJRenko's Avatar
 
Join Date: Nov 2016
Posts: 6,699
Quote:
Originally Posted by MrWyatt View Post
Surely if rental income falls or drops off completely then I could either sell it or even live in it. Also my rent would be lower if I decided to keep renting. And if prices went down I would still be able to buy another property as that would have gone down too. Except I'd have more money from the rental income or do you really believe that rents will collapse even though there are thousands of homeless people in Dublin? How many homeless people in sligo?

What is the big risk in buying a property to let when you don't have a mortgage to repay, it's not like it's going to be repossessed at any point. It's not like I'm in trouble if the rent doesn't get paid. Worst case scenario I earn nothing, but if money sits in the bank I earn nothing either. Best case scenario and the property increases in value and my tenants pay their rent. Then I might be able to sell and buy the house I actually need.

You're a long way off the worst case scenario there. Here's some worst case scenarios that Irish property investors have faced in the last 10 years;
  • Your property is worth 50% to 75% what you paid for it
  • Your property has serious structural defects - maybe insufficient fire protection or balconies falling off, and you're facing a €50k-100k bill to fix this
  • Your management company that looks after the shared areas has collapsed, because none of your neighbours were paying their fees - so you've no lights in common areas, no bin collections, no buzzers to access the gate, no working lifts
  • Your last tenant has refused to move out - you haven't been inside your property in six months, but the neighbours are complaining to you about the smell and constant parties
Now you're getting close to worst case scenarios.
AndrewJRenko is online now  
Thanks from:
11-03-2019, 20:55   #75
DubCount
Registered User
 
DubCount's Avatar
 
Join Date: May 2016
Posts: 330
As OP is unemployed, I'm guessing there is a reliance on social welfare for an income. Unemployment Assistance is a means tested payment, and having cash of €170k or a rental property would impact on the means testing. Owning a home for you to live in yourself does not impact on means test assessment. Because of this, I would recommend buying a property to become a PPR rather than an investment.
DubCount is offline  
Thanks from:
Post Reply

Quick Reply
Message:
Remove Text Formatting
Bold
Italic
Underline

Insert Image
Wrap [QUOTE] tags around selected text
 
Decrease Size
Increase Size
Please sign up or log in to join the discussion

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Share Tweet