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30-07-2020, 18:47   #31
Samuel T. Cogley
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Originally Posted by Thierry12 View Post
Never a good time to buy a house, car, graphics card, you name it

Most risk aversed place around
With two potentially revolutionary new architectures being launched in a matter of weeks you'd be wise to hold off getting a new GPU. I would have thought now would have been an ideal time to buy a car.
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30-07-2020, 18:57   #32
circular flexing
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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.
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30-07-2020, 19:00   #33
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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
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30-07-2020, 19:05   #34
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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?
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30-07-2020, 19:10   #35
Samuel T. Cogley
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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.
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30-07-2020, 19:32   #36
St1mpMeister
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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.
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30-07-2020, 21:38   #37
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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.
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30-07-2020, 22:15   #38
circular flexing
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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.
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31-07-2020, 00:08   #39
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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.
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31-07-2020, 09:05   #40
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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.
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31-07-2020, 10:26   #41
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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.
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31-07-2020, 10:54   #42
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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?

Last edited by Yyhhuuu; 31-07-2020 at 10:58.
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31-07-2020, 10:59   #43
St1mpMeister
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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.

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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.
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31-07-2020, 10:59   #44
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Depends on how creative your accountant is?
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31-07-2020, 11:04   #45
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Why?

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Originally Posted by redarmyblues View Post
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?
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