What yield would be the minimum for house in Northern Ireland?

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podd

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If you were buying a house (not an apartment) in the north with the intention of renting out the house, would you only purchase if the yield was a minimum percentage of the purchase price?

If so, what would be the minimum yield at which you would consider purchasing a house in NI?

Or would you not really worry too much about yield, due to potential capital growth?
 
well the yield should exceed what you would get if you just chucked the cash into a high interest depeosit acc for one..

It should also exceed that return by more than your annual and front end associated costs of Acquiring/owning/letting/maintaining/Idle time. and allow for hassle / time involved in owning thats not associated with a sum on deposit say.

If you are borrowing the money the yield needs to be higher again to cover borrowing costs.

If you are speculating and are willing to take the risk on cap app then you may sett;le for a lower yield.
 
Thanks, so has anyone here purchased a rental property in the north recently? If so, what yield, as a percentage, were you able to obtain in relation to the purchase price?
 
I bought an apartment in Belfast in Dec '05. The yield is 4.3% which I suppose is not all that brilliant, but capital appreciation has more than made the purchase worthwhile. The property has gone up almost 50% since we bought it. Rents in Belfast are a lot lower than in Dublin and haven't gone up that much in recent years despite the rise in property prices. That may change if prices keep rising. The other things to remember in Belfast are the rates charges (over £800 per annum for a two bed apartment in South Belfast) and the fact the fact that capital gains is 40%. However the plus points are much lower legal fees when purchasing and low rates of stamp duty. Hope that helps a bit!
 
Rents in Belfast are a lot lower than in Dublin and haven't gone up that much in recent years despite the rise in property prices. That may change if prices keep rising.
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I think that a quick look at the rental market in the Republic would make it clear that rising house prices have no relation to rising rents. Rents are set by supply/demand in the market. This is a function of house building, investor numbers, income increases, demographics etc. They are not set by landlords wishing to cover their mortgages.
 
Marg said:
I bought an apartment in Belfast in Dec '05. The yield is 4.3% which I suppose is not all that brilliant, but capital appreciation has more than made the purchase worthwhile.
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Thanks Marg, just wondered but did you take out a pounds sterling mortgage with a UK bank?
 
I took out a Euro mortgage with the N.I.B. That means a bit of risk with currency fluctuation obviously but the interest rates were significantly lower than the U.K rates. Also I thought the sterling mortgages I looked at were also expensive in terms of arrangement fees etc. Hope that helps. Let me know if I can help with any more info.
 
Thanks Marg, had just wondered about yields as yields in NI now seem to be about 2.8% of current prices.
 
house prices in belfast have tripled in last six years and rents (or salaries) have not increased in proportion. capital appreciation is the big one at the minute - this time last year was the time to get in for rents to approch covering mortgage costs unless you can put more than 33% down as deposit. from what i can see at minute your are looking a spending 200stg to cover difference between rent and mortgage at minute on properties in highly rentable areas (based on UK stg mortgage at 6% int only)

M
 
I bought a house last year in North Antrim for £168K and the rent is £400 pm. Doesn't cover interest only mortgage.

I bought an apt. 3 years ag in Belfast for £108K and the rent is £550 pm.

Capital Appreciation is what I'm looking for and it seems to be happening.

Better value now outside Belfast
 
Also in both cases I went with Stg mortgages, since I would prefer to avoid the currency risk.
 
Marg,
I have seen posts which indicate you won't be subject to uk cgt on uk property if you're from and resident in the south. You'll just pay the irish 20%.
 
Pegasus said:
Marg,
I have seen posts which indicate you won't be subject to uk cgt on uk property if you're from and resident in the south. You'll just pay the irish 20%.
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Please elaborate on this. Seems too good to be true. Anyone with definite knowledge
 
As a UK non resident you pay tax on your Irish income. Profit from a property in the UK brought back to Ireland, subject to Irish tax at 20% not the UK 40% as you have remitted the income to Ireland. Ireland/UK double taxation agreement.

Think that's it in a nutshell, I'm sure there'a bit of devil in the detail.
 
Correct. No CGT for non residents in UK. Also you get a full personal allowance in UK so first £5k odd rental profit will not be taxable for income tax in UK.


Joe
 
Hi All,
I can now confirm this - I can't believe that I thought I would have to pay 40% cgt in the U.K. Turns out that I don't - it's 20% here and that's where I'll have to pay the cgt if/when I sell. This has made a big difference to my future tax bill - the poor revenue man who confirmed it made my day I can tell you!
 
What? - did you only believe that the price of "cabbages" was a one-way street - check out the FOOL in the UK where they discuss this site - LOL

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There's a TV documentary investigation, "Insight", into the Northern Ireland housing market on this Monday.

Monday at 8.00 pm on UTV
http://www.u.tv/tvlistings/index.asp?id=3&channeldate=04/06/2007&x=50&y=9

[FONT=Verdana, Arial, Helvetica, sans-serif]Chris Moore presents an investigation into Northern Ireland`s housing market, which has come under scrutiny following claims that houses in Northern Ireland are hugely over-valued[/FONT]
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[broken link removed]
Investors are said to be no longer buying in Northern Ireland
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