thinking of buying a 4 bed semi in good residential area in Limerick
- Thread starter bricksguy
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A 5% Interest Only mortgage on 75% of the value of the property would cost you 15K. This would allow you to notionally break even (not allowing for insurance and other costs). Do you have 100K spare to pay the other 25%? Do you have the money on top of that for stamp duty?
Do you see yourself being able to achieve either a higher rental income or a significent level of capital appreciation in the short to medium term?
Do you have experience renting out property and are you prepared for the effort required to maintain the property and fullfill your legal obligations to the PRTB?
DrMoriarty
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Are you sure about that part? I live in said area and I wouldn't have thought student accommodation — even a four-bed — would fetch that.
I'm open to correction, though!
Well you should get easily €85 per double room for 39 weeks and €70 for single room total €12675, summer period of say 12 weeks at reduced rent of €200 per week gives €2400 in total €15075. There could obviously be a rise in room prices depending on size and a little extra on the en-suite room so I would imagine 14-16k isn't far off the mark.
the area you are thinking of has a range of property most to a good standard and a newish 4 bed semi in a good estate can be bought for €400,000.
The area has always been a sought after residential location so re-sale should be good and as long as you keep on top of your tenants and maintenance your running costs should be kept to a minimum. Just take into account your tax situation. The prtb obligations are minimal so not a huge factor.
the area you are thinking of has a range of property most to a good standard and a newish 4 bed semi in a good estate can be bought for €400,000.
The area has always been a sought after residential location so re-sale should be good and as long as you keep on top of your tenants and maintenance your running costs should be kept to a minimum. Just take into account your tax situation. The prtb obligations are minimal so not a huge factor.
Are you kidding me? I appreciate that you're an auctioneer and need to talk up the market but I've outlined how the the OP will be making a loss on a day to day basis even if they achieve what YOU'VE outlined to be the top rental rate achieveable. AND that's if they plug 100K (+ stamp duty of ~25K) of their own cash into the deal. Seriously, how do you reckon that's a good deal!
I'm not just shootin the breeze, come on how is that a good deal? Give us some numbers. Do you think the OP can achieve a higher rental return in the medium term, or significant capital appreciation?
Well I didn't say it just for the sake of it and the numbers on rental were posted by the OP, I agreed to a point that these numbers were attainable not because I'm talkin up the local market as you seem to imply.
I'll give my reasoning by answering your initial queries to the OP.
The area in question I am assuming is the South Circular Road in Limerick. The market that the OP seems to be guided by is the teacher training college. There is a very short supply of decent(any) accommodation for students at Mary Immaculate college and a number of properties in the area being used are old and not of great appeal to students if there is a choice. If the OP is looking at areas like Castlewell etc where his budget would cater for he will find he can purchase a modern 4 bed for just under 400k possibly go as low as 380 to get under the threshold and attain the aforementioned rental income. Therefore because the rental market in this area is in short supply, I could envisage an increase in rental income in the not too distant future. That also applies to the appreciation of the price. It has always been a sought after location, it hasn't suffered from any dip in the market and I don't see the area being diminished by any future planning etc so I would expect the property to increase in value. The OP could choose to go for a 3 bedroom apt in the same area for under 280k, but the 4bed house is a sound investment in my estimation. He will have to keep on top of the maintenance and tenants and cut out letting fees to make it really viable.
We are looking at it from different aspects I can rightly be accused of being in the optimistic camp and you are coming at it in a very pragmatic sense which is fair enough. I realise it might seem like talking up, but properties in this area are still in demand which isn't the case everywhere, but some areas throughout Ireland are always going to have extra appeal both as an investment and to private buyers and this area is one of them.
I have a feeling this isn't going to suit as conclusive reasoning