Bought a house am I mad

Bought a house for 40000k should get around 400pm per month. Situation at home have 3 years left on mortgage and have house in Dublin with 11 years left rent covers this mortgage. Am 34 would like opinions.

Its a bit late now to be asking for opinions. As you have already purchased the house, there isnt much you can do about it. Did you really buy a house for €40,000? is it out in the sticks and what condition is it it? You hoping to generate an income of circa €100 a week by renting it out, a measly amount considering the taxes and expenses you will be liable for not to mention the hassle associated with renting.

moneybox said:

Its a bit late now to be asking for opinions. .

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I thought the same !

Let's see if it's worth 40K. Take rent of 400 X 12 months x 12 = 57K or by 15 = 72K so that seems ok. And you can't build a house for 40K. Will it keep it's value. Presumably even if in the sticks of Ballygobackwards (currently Allsops have a lot of shacks in the sticks but they also have mansions in Mayo/Donegal etc for around 40K or less)

He has no mortgage it seems.

His 40K in the bank would give him what, 1% ie 400 a year less DIRT 30%?. And inflation eats the 40K.

There's a possibility of capital appreciation.

But how much is he making on it. Let's presume a top rate taxpayer. That's 52% tax or thereabouts.

400 X 12 = 4800. Less 2500 in tax, that's €2300.

He has to pay PRTB, 90, LPT ? 200 is it or thereabouts. He has to furnish it and do repairs. Tax is less coz you can deduct the costs. Does he get more than 400 a year plus the hassle to make it worthwhile.

Of course if he is not a top tax payer his profits will be higher.

The problem with a cheap house,(and the small rent deriving from it) is that repairs and replacements are going to be proportionally very high compared to the rent.
Eg,new fridge-1 months rent gone
new boiler-6 months rent gone
roof repairs.......you get the picture!
You could find yourself having all the hassle of being a landlord for peanuts.

its a good return on a small amount of money , assuming its structurally sound , i see little wrong with it , taxes apply to houses in D4 the same way