A rough figure not knowing your costs I would reckon that you might come away with about 55 to 60 percent of the rental income.Hi all,
I'm trying to get my head around this and maybe a landlord can clarify if they are in a similar position.
If I decide to buy a property (mortgaged or cash) and rent it out for €1400 per month, I know that I can claim depreciation on furniture and management fees, property advertising fees, some fire/third party insurance etc. to reduce my tax bill, but given that I work and it would push my income over the threshold in to the higher tax rate, what is the take home worth per month to a prospective landlord/existing landlord?
Thanks,
Pedroso
Everyone in Ireland would buy somewhere to let out if this was true.A rough figure not knowing your costs I would reckon that you might come away with about 55 to 60 percent of the rental income.
More like 30-40% for higher rate taxpayers.A rough figure not knowing your costs I would reckon that you might come away with about 55 to 60 percent of the rental income.
Hi all,
I'm trying to get my head around this and maybe a landlord can clarify if they are in a similar position.
If I decide to buy a property (mortgaged or cash) and rent it out for €1400 per month, I know that I can claim depreciation on furniture and management fees, property advertising fees, some fire/third party insurance etc. to reduce my tax bill, but given that I work and it would push my income over the threshold in to the higher tax rate, what is the take home worth per month to a prospective landlord/existing landlord?
Thanks,
Pedroso
Yep I rent out an apartment in Dublin (in an RPZ but luckily at a decent market rate) and get to 'keep' 36% of the rental income after all costs/tax are paid but excluding mortgage capital repayments. Mortgage is quite small at 30% LTV 3% interest, so that profit figure could be much worse.More like 30-40% for higher rate taxpayers.
Does that work out at around 2.7% after all costs and taxes?In my case the yield on my equity in the in the apartment is about 7.5% before tax.
Slightly higher (about 3.3%) as costs are already taken out of that, it's basically Rental Income less all costs divided by my equity in the property. Not a terrible investment by any means, but even as somebody quite into DIY and living very nearby, I find going over to fix a fan or boiler or whatever on a cold winters night a bit tedious a few years in. I really would not recommend it to anybody unless you're planning on having it fully managed (in whichcase your yield will be very poor) or you're buying 5+ properties and will make a career out of it.Does that work out at around 2.7% after all costs and taxes?
I said a rough figure for which I use my own experience of letting and a good accountant. There are of course useless landlords who dont keep proper accounts and people on here who havent a clue. If someone buys for cash and is only pulling 30 to 40 per cent after tax they are in the wrong gameMore like 30-40% for higher rate taxpayers.
The original poster is clearly not an experienced landlord, so will be coming into this 'not having a clue' and will most likely fall into your 'useless landlord' category initially. It might be more helpful to provide advice based that assumption.I said a rough figure for which I use my own experience of letting and a good accountant. There are of course useless landlords who dont keep proper accounts and people on here who havent a clue. If someone buys for cash and is only pulling 30 to 40 per cent after tax they are in the wrong game
I would reckon that you might come away with about 55 to 60 percent of the rental income.
How could you possibly come away with 60% of the gross rental income as a higher rate taxpayer?!I said a rough figure for which I use my own experience of letting and a good accountant
No, the relevant thing to consider in evaluating an investment is the OP’s marginal tax rate, not his effective tax rate.Depends on the OP's effective tax rate on all income, rather than exclusively counting the letting income as being exclusively at the marginal rate.
How many times in the last six months did you have to go there to fix something? What will you do with the equity when you sell.Slightly higher (about 3.3%) as costs are already taken out of that, it's basically Rental Income less all costs divided by my equity in the property. Not a terrible investment by any means, but even as somebody quite into DIY and living very nearby, I find going over to fix a fan or boiler or whatever on a cold winters night a bit tedious a few years in. I really would not recommend it to anybody unless you're planning on having it fully managed (in whichcase your yield will be very poor) or you're buying 5+ properties and will make a career out of it.
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