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Am I Mad?

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  • 02-01-2015 10:48pm
    #1
    chops018
    Registered Users Posts: 2,458 ✭✭✭


    There is some 1 and 2 bedroom properties around my hometown for 40-50k.

    Would I be mad purchasing one and letting it out?

    Never had a buy to let so I wouldn't be sure if it would be too much hassle.

    Also if I had 5k and got a loan of the rest would you get a 10 year mortgage for a loan of 50k do you think?


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    #2
    Wabbit Ears
    Registered Users Posts: 3,042 ✭✭✭Wabbit Ears


    Really depends what the rental income of similar properties in the area are.


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    #3
    chops018
    Registered Users Posts: 2,458 ✭✭✭chops018


    Averaging around 600-700 at the moment.


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    #4
    Triceratops Ballet
    Registered Users Posts: 4,894 ✭✭✭Triceratops Ballet


    I just got signed off on a 60k mortgage over 10 yrs. I only had 6k in savings repayments are 600 odd a month , so its possible.


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    #5
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    OP- sit down and do the sums.
    Your rental income is taxable income- it is not clear profit (though there are some expenses you can allow before determination of taxable income). You could end up with a sizeable chunk of the rental income being taxed @ over 50% (you also have to pay PRSI on the gross rental income now........)
    You have a lot of hassle with registering tenancies, vetting prospective tenants, possible issues with tenants- including but not confined to- overstaying tenancies- not paying rent etc etc
    Are you prepared for the amount of work that being a landlord entails?
    If anything at all goes wrong- the tenant will expect you to be at their beck and call..........

    Also- rents are at historically high levels- its improbable that they will remain at these levels indefinitely.


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    #6
    chops018
    Registered Users Posts: 2,458 ✭✭✭chops018


    The_Conductor wrote: »
    OP- sit down and do the sums.
    Your rental income is taxable income- it is not clear profit (though there are some expenses you can allow before determination of taxable income). You could end up with a sizeable chunk of the rental income being taxed @ over 50% (you also have to pay PRSI on the gross rental income now........)
    You have a lot of hassle with registering tenancies, vetting prospective tenants, possible issues with tenants- including but not confined to- overstaying tenancies- not paying rent etc etc
    Are you prepared for the amount of work that being a landlord entails?
    If anything at all goes wrong- the tenant will expect you to be at their beck and call..........

    Also- rents are at historically high levels- its improbable that they will remain at these levels indefinitely.


    Nope. I didn't know any of that, thanks. I think I will put this idea in the backseat for a good few years so.


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    #7
    Mr. teddywinkles
    Registered Users Posts: 1,962 ✭✭✭Mr. teddywinkles


    chops018 wrote: »
    Nope. I didn't know any of that, thanks. I think I will put this idea in the backseat for a good few years so.

    If its an apartment don't forget maintaince fees.


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    #8
    Beaner1
    Banned (with Prison Access) Posts: 819 ✭✭✭Beaner1


    A lot of hassle for what will amount to a couple of grand a year. Don't forget the potential risk of voids, non paying tenants and/or tenants causing massive damage to the place.


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    #9
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    chops018 wrote: »
    Averaging around 600-700 at the moment.

    15-17% yield?

    Without knowing any more, my cautious nature would think that if something looks too good to be true, it probably is.


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    #10
    JohnnyChimpo
    Registered Users Posts: 1,074 ✭✭✭JohnnyChimpo


    Beaner1 wrote: »
    A lot of hassle for what will amount to a couple of grand a year. .

    I think the benefit is that you own a property at the end of 10 years, let's not miss the point here


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    #11
    hfallada
    Closed Accounts Posts: 4,180 ✭✭✭hfallada


    OP you are better off sticking your money in an index. If you put your money in a share index such as the ISEQ. You would have had a return of 14.5% in 2014 with no work and less risk(index takes include all industries and sectors, so they are safer than buying a single share ).

    Where as renting house in your area will require repairs, dealing with tenants BS(my mother had a tenant calling her on Xmas day at 3pm wondering what time she would collecting the rent that evening). Being a LL is too much work for the return


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    #12
    Gerry Rio
    Banned (with Prison Access) Posts: 654 ✭✭✭Gerry Rio


    chops018 wrote: »
    There is some 1 and 2 bedroom properties around my hometown for 40-50k.

    Where is your hometown?


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    #13
    Barely Hedged
    Closed Accounts Posts: 992 ✭✭✭Barely Hedged


    hfallada wrote: »
    OP you are better off sticking your money in an index. If you put your money in a share index such as the ISEQ. You would have had a return of 14.5% in 2014 with no work and less risk(index takes include all industries and sectors, so they are safer than buying a single share ).

    Where as renting house in your area will require repairs, dealing with tenants BS(my mother had a tenant calling her on Xmas day at 3pm wondering what time she would collecting the rent that evening). Being a LL is too much work for the return

    Comparing directly a short term investment with a long term one. Not great advice


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