Buy To Let: Possible to Actually Make a Profit in Ireland, or Elsewhere?

Just to reply to the initial question.

I have just put a booking deposit on a new two-bed apartment in Limerick cost 150,000 euro, if you take out a 35-40 year 100% mortgage then the repayments are less than 700 per month (at 4% interest), I am currently renting a similar sized property for 700 per month. So, theoretically there exists the possibility that it could be self-financing. Of course the margin is miniscule, but, even adding on the inevitable costs of upkeep, taxes etc, at the very least the investment would need very little extra cash input.

By not taking a 100% mortgage and/or choosing an interest-only option the monthly repayments could be reduced and the investment may actually contribute real positive cash flow.

So maybe it is possible to make a profit on buy to let. (and in Ireland !!!, although I am beginning to think that large parts of the Limerick property market are not following the national trend!)
 
Hi Cian8,

Is that a city centre apartment you will be letting out? It sounds cheap. Limerick is saturated with rental properties, you have to be very careful with your location.

You will probably have to put a lot of spare cash into your investment, if you take into account vacancies, insurance, maintenance, tax etc.

Even at current rates that is not self financing. When interest rates go up it will be even more of a drain each month.

Peadar
 
Hi Peadar,

I'm actually not going to be renting the apartment out, I just thought it was of interest as regards the whole argument of whether it is possible to buy-to-let in Ireland where the investment is self-financing.

I am buying the apartment with my girlfriend (both FTBs) to live in, so we can add mortgage interest relief into the equation, and therefore even with an increase in interests rates we should not ending up paying much more per month than the equivalent rent!

The apartment is between the city centre and the university, its close to where we work so its an easy (ish) decision for us, i.e. pay 700 per month rent with nothing to show for it or pay slightly less per month and own something!

The price does sound cheap though doesn't it! My opinion is that most apartments advertised in Limerick are still tax incentivised, which seems to add on whatever percent to the cost. Apartments (2 bed) without section whatever tax breaks seem to sell for between 150,000 and 180,000 depending on location and whether or not they are furnished. Although I am by no means an expert, I feel 150,000 euro is a fair value (i.e. not a figure plucked from the sky like Dublin property prices) for a nice 2 bed especially if (like us) you want to live in it!
 
Hi Cian,

That does sound like good value if your happy with the repayments and you like the location. There is still good value to be had in property in Limerick e.g. Castletroy is still relatively cheap because of an oversupply of student accomodation, which means that eventually students will move out of the estates and into the student accomodation. This should make those estates much nicer residential estates again in the future

Peadar
 
About 18 months ago, I decided that, based on yields, a 2 bed apartment in clontarf at 350k + stamp was too dear. Based on 90% occupancy and 3% interest rate, I would need 1,021 per month in rent to cover the interest - not to mention other incidentials. An appartment in the same development is now quoting 450k ! This would need over 1,500 in rent just to cover the interest. That would imply it must be FTB's - musn't it ?
 
blobert said:
Hi there,

Do you guys think it is possible to buy a property in Ireland (at current prices) and rent it at a profit (I'm asuming the answer is no).

Most of the posters here seem that are buying to let seem to accept that they will have to subsidise the mortgage repayments with their own incomes in the hope that their property will increase in value over X years after which they plan to sell. This seems a bit of a flawed idea to me.

So is it possible to find buy-to-let properties in Ireland, the rental income of which will cover your mortage and other charges and fees aplicable to renting?
The idea of buying a slightly run down place and allowing rent allowance letters appeals, but I gather this is not too straightforward to do.

If this is not possible in Ireland, any recommendations on where to look abroad would be appreciated.

Thanks in advance,
Robert
Click to expand...



PM me i will give you a contact who will show you.
 
woods said:
I think that it a mistake to make hard and fast rules and every opportunity should be judged on it's own merits. We once bought a property that generated no income and we bitched a little to each other about it but when we finally sold it we calculated that we had earned £3K per week (and yes that is old pounds and not euro) for every week that we had owned it.
I know that times were different then but if we had followed investor guidelines we would never have bought it and would have missed a huge gain.
Click to expand...

a lot of it is down to luck at the end of the day which is close to what you're saying though you sure wouldn't make that in the not too distant future imho,

C
 
cian8 said:
By not taking a 100% mortgage and/or choosing an interest-only option the monthly repayments could be reduced and the investment may actually contribute real positive cash flow.

So maybe it is possible to make a profit on buy to let. (and in Ireland !!!, although I am beginning to think that large parts of the Limerick property market are not following the national trend!)
Click to expand...


Someone correct me if I'm wrong but the interest only mortgage only lasts so long so paying interest on a bigger capital sum in the long term? No??
 
If you took an interest only Mortgage that might be covered by renters, say then 10 yrs down the line house which was bought for say 350K now say even 500K which would be a modest return I think would expect more after 20% to help fund hostipals etc you are left with 120K not bad
blobert said:
Hi there,

Do you guys think it is possible to buy a property in Ireland (at current prices) and rent it at a profit (I'm asuming the answer is no).

Most of the posters here seem that are buying to let seem to accept that they will have to subsidise the mortgage repayments with their own incomes in the hope that their property will increase in value over X years after which they plan to sell. This seems a bit of a flawed idea to me.

So is it possible to find buy-to-let properties in Ireland, the rental income of which will cover your mortage and other charges and fees aplicable to renting?
The idea of buying a slightly run down place and allowing rent allowance letters appeals, but I gather this is not too straightforward to do.

If this is not possible in Ireland, any recommendations on where to look abroad would be appreciated.

Thanks in advance,
Robert
Click to expand...
 
You must log in or register to reply here.
Back
Top