Financing second property.

[budokan]

Hi All,

I am new to this site and have found it very informative and helpful.

I am currently investigating the purchase of a second property in Ireland. My main query is regarding the best way to finance such. I currently have an irish property with equity built up of about €50k. The outstanding mortgage is currently in the region of €280K. My current salary is €32000.

My plan is to purchase a house and rent out the current property. I have done the sums and based on these the return is acceptable, taken account of future probale rate increases and other negatives. The rent from property 1 would cover the current mortgage and generate a small profit after expenses & tax.

Given this would the banks look favourably on this? What would be the best way to proceed with such a plan? How much would the banks be willing to advance?

Thanks for your replies in advance,

 

[DonKing]

"The rent from property 1 would cover the current mortgage and generate a small profit after expenses & tax."

I very much doubt this would be true. Could you post the projected mortgage repayments and rental income which forms the basis of this opinion?

Have you considered all the tax implications in your calculations?

why don't you go into your bank and ask would they give you an investment mortgage? You should get an estate agent to evaluate the property you intend to rent. They will be able to give you a letter estimating the projected rental income. The bank will need this.

If you can give more details on your "sums", you should get plenty of responses.

donking