Buy second house to live in and rent current house

T

T101

Guest
Hi,
I would like your collective opinions on an idea I was thinking of re buying a house and renting my existing house ... I will keep this short and hopefully concise

Was thinking of extending 3 bed semi D in maynooth ... noticed a nicer bigger house for sale, viewed it and liked it, could see family living in this house (second hand)
Seller wants a quick sale, I feel there is a good value to be had here so was thinking of buying this house to live in and renting my existing house.
Existing house is 3 min walk to train station and town centre, 5 min walk to university, near intel / HP / motorway etc. I have been researching rental and rekon that this would be an easy house to rent and keep rented, 1100 per month seems reasonable. There are other houses rented beside mine and I have never seen one unoccupied
If the rental this did not work out, I would consider selling the existing house as my safety net.
I am just putting this out there as an idea to see if others think as I do ... I am not getting too bogged down with the financial aspect ... as that is something a will have to figure out myself.
Will some towns/areas always be good for rental income or is this a bad idea , period.
Thanks for reading ..
T
 
My Brother who lives in the same area did this a few years ago, fine when you have tenants(and he does most of the time) but can cause huge financial stress and problems when he does'nt
 
Seller wants a quick sale, I feel there is a good value to be had here

Him and thousands of others. There may be even better value in 6 months time.

If you reckon you're getting it for a good price though and can pay both mortgages without tenants if necessary then go for it.
 
If your buying the second house with cash and you want to be a landlord and deal with everything that goes with it, then go for it. If you have to get a mortgage then i would think twice.
You're working on the rent being 1100, thats fine for now, but how would the figures look if the rent was 900 or 700? Rents are falling just like house prices, say for example houses prices drop by another 20-50% then the rent prices will follow, it wont make scene if the mortgage is 500 per month but the rent is 800.
Also the rental market is flooded with people that cant/wont accept the reality that their house is only worth 20/30/40/50% less than a few years ago and so decide that renting is the best idea, many realise too late that the rental market is saturated as dole cues increase and non-national return home.

There is too many maybes in the property market at the moment and its better to have as little property related leverage as possible, it might only be a few years for now when this hits home for many.
 
Thanks for your comments .... its good to here other points of view ....
 
Also consider if the value of your house drops further.

Also tenants can be more trouble than they are worth.

The 1100 is not straight profit.

You will need to maintain the house, possibly paint it between lets, It will have a lot of wear and tear, and could be worth less when selling as you are selling a house that will have been rented, rather than a family home that has been carefully maintained.

You will also probably need to change carpets etc... every 4-5 years to keep the house fresh and at the top of the market.

You will also have the expense of furnishing one of the houses 10-15K as you probably only have enough stuff for one house.

Also you will need to repair appliances etc... and to insure the house.

Taxation, PRTB fees and letting fees if you use an agency all have to be factored in.

Possible taxes on second homes are also imminent as is the reduction on tax relief for the mortgage interest on the rental property. I am renting a property I had no problem getting E800 for previously and now lucky to be renting it for E500. While I still have the same costs and outgoings.


In the current market as a previous poster said, you should be able to meet the mortgage commitments and running costs of the 2 houses long term.
 
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