It is not necessary to wait until tenants have moved in to 'buy the stuff you wanted'. A 12.5% per annum wear and tear allowance can be deducted over 8 years on furnishing and fittings regardless of when they were purchased.dodo said:good tip if u have old furniture use that in house first then when tentants have moved in then buy the stuff u wanted this way u can claim for them because u bought them after they moved in best of luck
Couldn't agree more - don't just listen to what the bank says, get independent advice before you decide to invest in property.(a) you should get independent, professional advice on this ideally from an accountant and (b) you should ask yourself if you are actually prepared for getting into the property management business or if some other sort of investment might suit you better.
larry1 said:Annual rental income... €12,000
Annual mortgage interest €12,000
Am I correct in assuming I will have no tax bill at year end because interest only mortgage will offset against rent??
budapest said:Is this really a good investment as you seem to be making 0% profit with all the hassle of locating tenants, dealing with tenants, vacant periods, possibility of price decrease, stamp duty, legal expenses, etc...?
Based on the figures above the proposed 100% mortgage would be about €400K. 30% gross capital appreciation in 5 years time would yield €120K gross or €96K net (after CGT and ignoring other deductions/expenses). Let's assume that the ancillary costs of managing the property over those 5 years come to €6K. So €90K on €400K over 5 years is c. 4.1% CAR according to this calculator. I'm ignoring inflation for simplicity so the real return may be even lower. You'd nearly get that on deposit without any of the associated risks. Hardly a great return all things considered. Once again I suspect that people are missing the point and not crunching the numbers to get a realistic, objective and prudent assessment of the investment opportunity and how viable it is...dodo said:house prices growing as they are and I see no reason why this should stop his investment should be at least 30% more in value if not more in 5Yrs so me thinking good idea
He could earn 4.875% gross CAR/EAR with AIB over the same 5 years with none of the hassle or risks. An investment with additional risks and hassle should really yield a significantly higher return than deposits.dodo said:He does make more money this way
Yes - but the 4.875% above is guaranteed (once the relevant terms & conditions are adhered to). The 30% figure you mentioned is not guaranteed. It could well be higher but it could also be lower due to less capital appreciation or higher expenses. Note that the analysis above did not take into account vacancy periods etc. as somebody else pointed out.and might make more rather than less he can also release money from this investment if he chooses to buy another place in a few years,this he could not do if he left in a bank making less money
How is he "giving" a home to somebody?and he is also giving a home to somebody lets not forget that,
dodo said:Thanks you made my point people forget that they still need the money in the first place, if the person kept his earnings from tenants for 5 yrs he could have more than 60K if he had a good accountant to avail of everything that there is , so house was 400k now 520K plus 60Ksavings = 580K , 96K Profit, 60K savings could be used to pay mortgage for that 5 yrs , bank even at 5 % 40K Profit net 32K, but you still have to pay back the 60K repayments for the 5 yrs so loss 20K , so yes house does sound a good deal better
larry1 said:30% over 5 years? Is that being very conservative? Apartment I am considering is in Leopardstown beside new Luas stop. Rockfield in Dundrum with similar Luas stop have gone up over 25% in 18 months???
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