Future of Residential Investment as a business

[dovest]

Residential Property Investment is a marginal business at present. If you bought your Irish Residential Investment Property (RIP as the Mortgage Brokers call it - what irony !!) in the last few years, the net yield you will be getting now is hardly better than 1% - and falling. Still, that's tolerable if the voids can be avoided !

But what is likely to happen to investors when we get hit with the following??

1) Second Home levy of €200 (already in law)
2) Rates or Property Tax of at least €1000 per property (proposed)
3) Income levy of 1% (already in law)
4) Increased Income Tax rates (proposed)
5) Disallowance of Interest as a tax deductible expense (proposed by many politicians).
6) "Quantitative Easing" - I think this means Printing Money by the various Central Banks - which will lead in a couple of years time to High inflation and consequently High Interest rates.

I think I'll quit now: Anybody want a couple of apartments - going cheap !!!

 

[murphaph]

But think of the guaranteed* capital appreciation!
Being a landlord will be viable for people who aren't leveraged to the nth degree as there will always be a demand for rental property from tenants-it just depends who's going to supply that demand. The recession in many ways means fewer people will be able to buy houses so there will be a steady demand for rentals.
















*not a guarantee.

 

[VOR]

On the bright side, people may start investing in businesses that actually make some thing and actually employ people. It was a novel idea kicked around many years ago and who knows it may come back!!

 

[Ret45]

Well, if you expect high inflation and high interest rates, then fix your mortgage now for 10 years at a good rate of less than 5%.

If we do get inflation, your debt suddenly becomes much easier to pay.

 

[Bronte]

OP if all those taxes happen to someone with a yield of 1% then they will probably not be able to afford the investment mortgage and will have to sell the property which will flood the market and property prices will come down. If the sale price does not cover the investment mortgage then if there is equity in your home there will probably be a judgement mortgage on this.