Just wondering what people's yield would have to be before buying a buy to let with cash?

[Bill90.]

Hi all, just wondering what people's yield would have to be before buying a buy to let with cash.

With interest rates rising and second hand property prices likely to fall in the future (less people able to borrow and no incentives on second hand houses) what rental yield would you want to achieve before buying.

Money invested in an index fund at the moment and in 3/4/5 years time if the market is good to me I could be tempted to withdraw it all if I found a decent BTL for 200k @ 1500pcm returning a yield of 9%.

Or would it be better to just let it accumulate and compound within the fund.

Interested to hear everyone's opinion.

 

[Right Winger]

Depends. Easy enough to find Dublin apartments that would yield 8/9% or so. You can get higher with poor quality units but do you really want to take that on? You'll also tend to get higher yields in provincial towns.
There is a lot of negative sentiment towards property investment on AAM. However, I for one, think it's still worth a shot. Apart from rent, you're also looking at potential capital appreciation - not guaranteed of course.
Obviously be aware of the downsides of property investment, but between rent and appreciation, I'd far prefer that to an index fund. And pick your tenants very, very carefully!!

 

[The Horseman]

I still think property is worth investing in but with the following in mind.

Property is a long term investment and the current anti landlord stance will take in my view a min of 3 to 5 yrs to settle into a more accepted rental market. This assumes additional housing supply comes on board to either buy or rent.

An investor should never have to narrow a focus on a particular sector of investment. With the rental income you receive diversify into other types of investments if you don't readily need the rental income.

 

[interested21]

just wondering what people's yield would have to be before buying a buy to let with cash.

For me to jump into property investment, it would be less about chasing a particular yield (although this is important of course) and more about it making sense based on other aspects of my overall position. For example:
1. If I wanted to take a step back in work and take on a lower paying job, meaning that my rental income would be taxed at the lower marginal rate
2. My overall position is sufficiently large that a rental property does not take up a disproportionate percentage of my wealth
3. I want to take on more risk through an investment in a single leveraged asset

 

[Ruben86]

Hi all, just wondering what people's yield would have to be before buying a buy to let with cash.

With interest rates rising and second hand property prices likely to fall in the future (less people able to borrow and no incentives on second hand houses) what rental yield would you want to achieve before buying.

Money invested in an index fund at the moment and in 3/4/5 years time if the market is good to me I could be tempted to withdraw it all if I found a decent BTL for 200k @ 1500pcm returning a yield of 9%.

Or would it be better to just let it accumulate and compound within the fund.

Interested to hear everyone's opinion.

I have a couple of rental properties, like you, I purchased cash, that's what makes it lucrative. If you need to borrow for a BTL I wouldn't advise some to do it. However, if you're fortunate and have the cash, I see it as a very good investment. I look to purchase anywhere around the 180K mark and rent out at €1,450. After legal costs that a gross ROI of 9.5%. I set aside 3K per annum for maintenance, insurance, LPT costs etc. which still leaves you with 8% ROI after costs. I manage the properties myself. I put time into selecting good tenants that share my views on life and it's worked so far. I've had several properties giving me a net return of 8% per annum for a few years and no trouble with tenants.

I'm sure lots of people will tell you to stay away, but it's been working for me. You will be hard pressed to find a fund that will guarantee you 8% per annum. The key is not borrowing and knowing I won't need to access the capital or liquidate it in a hurry at any point in the near future.

 

[Knuttell]

Gross 12% min to be worth it.

 

[NoRegretsCoyote]

There's no right or wrong answer here but people should bear in mind that for all the bad press Ireland still has the highest rental yields in western Europe.

A few factors people should consider in descending order of importance in my view

Tax: if you are already paying at the top marginal rate then your net yield is going to be much lower than your gross yield, and don't forget the USC surcharge if you are a high earner.
Interest in being a landlord: you will save a lot if you can do repairs and even renovations yourself compared to hiring contractors. You also have to be willing to deal with problems at short notice and screen tenants. Generally the more active and responsive a landlord is the better behaved a tenant is in response.
PRSI: If you have no employment or pension income and are under 66 then rental profits of at least €5k mean a €500 PRSI Class S contribution which builds eligibility for the state pension. This is very valuable.
Scale: there are limited economies of scale but more properties reduces risk within that asset class. One tenant could well stop paying you but unlikely that two or more will at the same time. Of course there are other asset classes that you could be investing in.
Cash flow: you need a contingency fund to be able to deal with unanticipated expenses and the risk of a non-paying tenant. This has an opportunity cost of course.

 

[Steven Barrett]

You will be hard pressed to find a fund that will guarantee you 8% per annum.

The annualised return of the S&P 500 since 1926 to June 2026 is 10.24%


And property return is not guaranteed, there are periods of vacancy. Add in that you manage the properties yourself, in other words you are working for that return, it should be good. Buy an index is passive, you don't have to do anything.

 

[NoRegretsCoyote]

The annualised return of the S&P 500 since 1926 to June 2026 is 10.24%

It's a bit apples and oranges there Steven.

Return on property includes capital appreciation and not just rents.

House prices have increased (not inflation adjusted) at an annualised 8.3% in Ireland since 1970. In inflation adjusted terms it's more like 4.0%.

I won't make general claims about Irish property vs US equities as an asset class but they should at least be compared on the same basis.

 

[Steven Barrett]

It's a bit apples and oranges there Steven.

Return on property includes capital appreciation and not just rents.

House prices have increased (not inflation adjusted) at an annualised 8.3% in Ireland since 1970. In inflation adjusted terms it's more like 4.0%.

I won't make general claims about Irish property vs US equities as an asset class but they should at least be compared on the same basis.

I agree, they are completely different, especially if managing the properties yourself i.e. working for it. I was only replying to the question of what fund produces 8%.

 

[Ruben86]

The annualised return of the S&P 500 since 1926 to June 2026 is 10.24%


And property return is not guaranteed, there are periods of vacancy. Add in that you manage the properties yourself, in other words you are working for that return, it should be good. Buy an index is passive, you don't have to do anything.

The annualised return of the S&P 500 since 1926 to June 2026 is 10.24%

"The annualised return of the S&P 500 since 1926 to June 2026 is 10.24%"
Wow, you can see into the future!? I'm assuming you mean June 23. However, historical trends are no good to us, investing 101, past trends don't guarantee etc. etc. etc. Furthermore, for anyone investing in our lifetime, the return since 200 has been about 6.73%. ( Source )

And property return is not guaranteed, there are periods of vacancy.

Well I can only speak from my own experience, I have 10 properties. Started building a portfolio 5 years ago. Throughout that time and across the ten properties I have had less that 2 months with a vacant property. In this climate (and I can't see an over supply coming anytime soon), getting a tenancy for your property is about as guaranteed as the Theory of Relativity (perhaps someone will disprove it someday, you can't say they won't but it's very, very unlikely).

I should add that it is very simple to manage your own property if you do it right. I would estimate I spend less than an hour a week managing my properties. Some weeks it will be more, when initially letting out the property in particular, but many weeks of the year it will be zero hours.

 

[Simpli]

10 properties

Were they all cash, or are some of them leveraged? I have got 2 cash along with my home house and thought I was doing well.

Also: are you not exposing yourself to awful risk in legislation change (SF / PBP coalition bring in a rule fixing rents at a certain rate, limiting upward growth)

Also Also: Is that not terrible from a wealth management / flexibility in passing on to the next generation (assuming you have kids)

 

[Ruben86]

Two properties is doing well, fair play. I probably shouldn't have included the number of properties, looking back it seems boastful, but the intention was simply to convey the point that I know a thing or two about the BTL sector and I'm not talking out my backside. First two were leveraged but I no longer owe anything on them. I'd like to edit out the number of properties but I don't seem to have the option to edit my comment which is strange, because I've done it on other posts?

Also: are you not exposing yourself to awful risk in legislation change (SF / PBP coalition bring in a rule fixing rents at a certain rate, limiting upward growth)

Any investment you consider will have it's risks. I weighed up the options and I still consider this to be worth it. I'm earning a good return at the minute, even if further limitations were put in place, I would still be okay. At least for a few years while I consider liquidating and putting it to work elsewhere.

Also Also: Is that not terrible from a wealth management / flexibility in passing on to the next generation (assuming you have kids)

I don't want to get into too much detail on how my situation is structured but if you are worried about passing onto the next generation, look into how a family partnership works, maybe get some advice from a tax expert on it. However, I don't have all my eggs in the property basket, I have some other things on the go. The next generation will be looked after in a tax efficient manner.

 

[presidenttttt]

Ruben, do you still hold that cash buying is the clear cut best route, given there is now again some relief on interest?

 

[lff12]

There's no right or wrong answer here but people should bear in mind that for all the bad press Ireland still has the highest rental yields in western Europe.

A few factors people should consider in descending order of importance in my view

Tax: if you are already paying at the top marginal rate then your net yield is going to be much lower than your gross yield, and don't forget the USC surcharge if you are a high earner.
Interest in being a landlord: you will save a lot if you can do repairs and even renovations yourself compared to hiring contractors. You also have to be willing to deal with problems at short notice and screen tenants. Generally the more active and responsive a landlord is the better behaved a tenant is in response.
PRSI: If you have no employment or pension income and are under 66 then rental profits of at least €5k mean a €500 PRSI Class S contribution which builds eligibility for the state pension. This is very valuable.
Scale: there are limited economies of scale but more properties reduces risk within that asset class. One tenant could well stop paying you but unlikely that two or more will at the same time. Of course there are other asset classes that you could be investing in.
Cash flow: you need a contingency fund to be able to deal with unanticipated expenses and the risk of a non-paying tenant. This has an opportunity cost of course.

This is good advice. It goes without saying also that the lower the income you have, the less tax liability you will have. Quite a few landlords are around who still have relatively modest incomes they top up with rental income so they don't have to work quite so hard.
There's a few parts of Dublin still where you can get a 1 bed unit for around 200k and get a monthly rent of 1.3-1.4k per month. Agreed find a tenant who isn't going to create a problem and treat them well. You can get quite decent furniture & appliances in likes of IKEA & power city, and obvious stuff like having any issues like boiler fixed a must. Apartments are honestly a far better buy for landlords because shared spaces & services are up to the management company to manage. Having to depend on a tenant to keep the lawns mowed, gutters cleaned, drains maintained & driveway spotless is probably a push. Even assuming that a tenant is going to get a boiler serviced every year is a push if the tenant is already at the pin of their collar paying rent.

 

[lff12]

Two properties is doing well, fair play. I probably shouldn't have included the number of properties, looking back it seems boastful, but the intention was simply to convey the point that I know a thing or two about the BTL sector and I'm not talking out my backside. First two were leveraged but I no longer owe anything on them. I'd like to edit out the number of properties but I don't seem to have the option to edit my comment which is strange, because I've done it on other posts?


Any investment you consider will have it's risks. I weighed up the options and I still consider this to be worth it. I'm earning a good return at the minute, even if further limitations were put in place, I would still be okay. At least for a few years while I consider liquidating and putting it to work elsewhere.


I don't want to get into too much detail on how my situation is structured but if you are worried about passing onto the next generation, look into how a family partnership works, maybe get some advice from a tax expert on it. However, I don't have all my eggs in the property basket, I have some other things on the go. The next generation will be looked after in a tax efficient manner.

I know a lot of families who have passed on BTL properties and its pretty nice to have good tenants in situ paying the rent already settled in - if its under the tax threshold even better - its nice to get a legacy but one that comes with income generation even better

 

[presidenttttt]

This is good advice. It goes without saying also that the lower the income you have, the less tax liability you will have. Quite a few landlords are around who still have relatively modest incomes they top up with rental income so they don't have to work quite so hard.
There's a few parts of Dublin still where you can get a 1 bed unit for around 200k and get a monthly rent of 1.3-1.4k per month. Agreed find a tenant who isn't going to create a problem and treat them well. You can get quite decent furniture & appliances in likes of IKEA & power city, and obvious stuff like having any issues like boiler fixed a must. Apartments are honestly a far better buy for landlords because shared spaces & services are up to the management company to manage. Having to depend on a tenant to keep the lawns mowed, gutters cleaned, drains maintained & driveway spotless is probably a push. Even assuming that a tenant is going to get a boiler serviced every year is a push if the tenant is already at the pin of their collar paying rent.

Are most Dublin apartment blocks not blighted with outrageous management fees though? Killing yield without actually building a sink fund in many cases for the bigger external works that come after a period of time.

 

[presidenttttt]

Running numbers lately and anything under 10% I think would require a very efficient tax structure, or house put in name of a significant other not working, assuming most people looking at BTL are able to afford to do so because they have high tax band incomes already, any capital appreciation assumption in a model has to be very conservative in my opinion (without referencing numbers which would start a pricing debate not allowed on this forums)

 

[Dr Strangelove]

I was talking to someone in the industry and institutional investors are looking for gross yields of 10% or so at the moment for existing stock.

 

[Mamamia22]

Management fees are exhorbitant and off putting to investors. Many second hand apts are being sold as LL getting out. So they are well worn and often with gas boilers that are on their last legs. Old bathrooms that need revamping etc. Plus many are on low rents do you can’t charge market rates. Not tempting in Dublin anyway as it would cost 350k to get a decent place plus revamp money. Teen to get tradesmen can be tricky. Not for the faint hearted.