Buying semi-detached house.

K

Knotty

Guest
Hi all,
I own a 3 bedroom house in Letterkenny. I have it now for ten years and am letting it out to tenants. It has been mostly occupied apart from a few months here and there. It is a semi-detached house. The owner of the house next door has now offered to sell me his house. I would like to buy this house by getting a mortgage on the strength of my house value. Would this be a good move in the current climate? Any ideas? This guy wants a quick sale.
 
At the risk of the thread being blocked for mentioning the future, what matters is whether you can afford it or not, stressing in another 2% rise in rates to be safe.

If i was a tenant I'm not sure I'd be delighted living next door to the landlord. As a landlord I wouldn't really be too keen on living beside the tenants either!

Would your long term plan be to knock the two together? I'm not sure a 5/6 bed in the middle of an estate of 3 beds would make the most of the properties....
 
I asume you plan to purchase the next-door property to let out as well. Is that correct?

In this case, then surely the maths are easy. How much rent do you charge per month in your current house? Multiply by 10 to get your annual income (assumes 1 month unlet and 1 month's rent goes towards maintenance expenses etc). Assuming house being offered is similar to current one, then rent should be the same in new one.

Now, how much will it cost to buy the house? Work out annual repayment on, say, 25 year mortgage. Work out how much of this is interest as this can be offset against rental income for tax purposes. Stress repayments by assuming a 2% rise in interest rates and see what figures that gives.

Now compare against rental income, and not forgetting that any rent received above and beyond interest on mortgage (and other allowable expenses) is taxable.

There's a mortgage calculator here: http://www.jeacle.ie/mortgage/
 
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