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Need home ASAP, have 170000 cash

13

Comments

  • Closed Accounts Posts: 9,057 ✭✭✭.......


    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.


  • Registered Users Posts: 695 ✭✭✭JimmyMW


    MrWyatt wrote: »
    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.


  • Registered Users Posts: 1,024 ✭✭✭gar32


    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!!!


  • Registered Users Posts: 1,813 ✭✭✭Wesser


    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.


  • Registered Users Posts: 22 MrWyatt


    Wesser wrote: »
    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.


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  • Registered Users Posts: 22 MrWyatt


    gar32 wrote: »
    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!


  • Registered Users Posts: 1,578 ✭✭✭JDD


    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.


  • Registered Users Posts: 495 ✭✭bleary


    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


  • Registered Users Posts: 1,813 ✭✭✭Wesser


    MrWyatt wrote: »
    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.....


  • Registered Users Posts: 3,529 ✭✭✭dubrov


    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.


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  • Registered Users Posts: 1,578 ✭✭✭JDD


    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.


  • Registered Users Posts: 5,490 ✭✭✭stefanovich


    OPs dream of becoming a property magnate is getting decimated here.


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


    MrWyatt wrote: »
    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.


  • Registered Users Posts: 1,061 ✭✭✭DubCount


    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.


  • Registered Users Posts: 9,991 ✭✭✭Caranica


    OP if you want to provide security and stability for your children don't become a landlord, buy your family a home. I know this will require compromise on location but you won't regret it in the long run.


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


    Lets see, 170k

    https://www.daft.ie/12028990 is 170k, but you'd also need to buy furnishings, etc.

    https://www.daft.ie/11957592 is 160k, but lack of inside pictures means they haven't gotten rid of the tenants yet, or it's a complete mess inside. Or both.

    They're the only houses you'll be able to afford in Dublin. And just barely. Should anything pop up, will you have the money to fix it? Stuff such as new boiler/washing machine/etc?

    Landlords are leaving the market as the rules are very much in favour of the tenant.


  • Registered Users Posts: 512 ✭✭✭dvdman1


    ....... wrote: »
    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.

    So where do you suggest he lives? Having a stable home to this man and his family may be more important. Bonds and investments don't offer a roof over your head..its not tangible


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


    It shows how little 170k is you are unemployed but it’s more savings than most. Op do you fully own the house you now live in?


  • Closed Accounts Posts: 9,057 ✭✭✭.......


    dvdman1 wrote: »
    So where do you suggest he lives? Having a stable home to this man and his family may be more important. Bonds and investments don't offer a roof over your head..its not tangible

    I asked him why he couldnt move to a different location but the post was removed.

    I suggest he moves to a different location and in the absence of any reason why not - then its a no brainer. The money should be put into a stable home, not a risky investment.

    Worst case scenarios for owning a rental havent even touched on the worst that can happen, I have seen people left with properties worth less than half of what they paid for them, with the bank refusing to allow them to sell because that would leave an unsecured loan, while tenants are refusing to pay rent. 15 years later its still not sorted out. For someone to tie up their only savings into a rental property in Ireland is madness.

    But given the OPs refusal to clarify the situation as regards any source of income or why he cannot change location its difficult to advise what would be the most financially sensible course of action for him.

    At this point all that can be said with certainty is that on the info provided he shouldnt buy a property to rent out.


  • Registered Users Posts: 14,643 ✭✭✭✭loyatemu


    where do you live now, how much is your rent and how are you paying it?

    your original post is asking what should you do, it would be useful to have this information.


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  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,937 Mod ✭✭✭✭pc7


    With no family then you shouldn't be tied to an area, something like this https://www.myhome.ie/residential/brochure/13-lakeshore-villge-avon-ri-blessington-wicklow/4317984 for 140k, leaves you enough to pay rent until summer, then move kids to new school etc. Getting a family home is more important, wasting your lump sum on an investment property would be madness when you have no back up fund if things go wrong. You could end up homeless with a tenant not paying rent.


  • Registered Users Posts: 695 ✭✭✭JimmyMW


    I think the OP is not willing to clarify anything asked, I think it is clear the OP only wants someone to justify his idea of buying a rental property and not real advise.


  • Registered Users Posts: 14,643 ✭✭✭✭loyatemu


    pc7 wrote: »
    With no family then you shouldn't be tied to an area, something like this https://www.myhome.ie/residential/brochure/13-lakeshore-villge-avon-ri-blessington-wicklow/4317984 for 140k, leaves you enough to pay rent until summer, then move kids to new school etc. Getting a family home is more important, wasting your lump sum on an investment property would be madness when you have no back up fund if things go wrong. You could end up homeless with a tenant not paying rent.

    that's suspiciously cheap - Avon Rí a holiday village, is there some restriction on living there full time?


  • Closed Accounts Posts: 9,057 ✭✭✭.......


    loyatemu wrote: »
    that's suspiciously cheap - Avon R holiday village, is there some restriction on living there full time?

    I cant imagine anyone would want to live there full time tbh, its advertised as a stag/hen/wedding/party location. Not exactly family friendly.


  • Registered Users Posts: 22 MrWyatt


    loyatemu wrote: »
    that's suspiciously cheap - Avon Rí a holiday village, is there some restriction on living there full time?


    It's a holiday village, are there primary and secondary school nearby? Also there is a Service charge of € 1,500pa


  • Registered Users Posts: 14,643 ✭✭✭✭loyatemu


    MrWyatt wrote: »
    It's a holiday village, are there primary and secondary school nearby? Also there is a Service charge of € 1,500pa

    it's in Blessington, there are schools.

    I don't see how it can be that cheap without there being conditions attached. The next cheapest property in Blessington is a 2-bed apartment for 200K.


  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,937 Mod ✭✭✭✭pc7


    ok I've no clue about the area, just did a 3 bed within commuting distance of Dublin, but there are properties outside dublin for OP, it was just an example.


  • Registered Users Posts: 22 MrWyatt


    loyatemu wrote: »
    I don't see how it can be that cheap without there being conditions attached. The next cheapest property in Blessington is a 2-bed apartment for 200K.


    I have seen a few very cheap holiday homes in Wicklow and they take a long time to sell. Anyone know what's up?


  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,937 Mod ✭✭✭✭pc7


    ok well as someone who never wanted to be a landlord I tell you it can be hassle, stressful and a pain in the ass, honestly buying an investment property is not the answer for you from what you have posted. Stability and a roof in the future (if your illness gets worse) is a priority. Also if you are entitled to benefits you should be claiming them. Kids are so adaptable, they will settle once you are with them, you are the glue not their friends.


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  • Registered Users Posts: 1,024 ✭✭✭gar32


    Sick with no Job and 2 kids. Best to get a roof over your head ASAP before that €170k needs to be used for day to day stuff. No family in the Dublin and single Dad. Time for a new life where houses or apartments are cheaper. You need as little stress as possible.

    Good luck !!!!


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