K
kaskade
Guest
My Fiancé and I are thinking about buying an investment property in Galway and we would like to get some options as to whether it is a good decision or not. We own a house in Galway at the moment and rent out the other 3 rooms in the rent a room scheme. The house we are looking at buying is in the same housing estate and it is ideal because the bedrooms are all double and it is a good location for renting. We have never had any trouble renting rooms in our current house and see this as a good opportunity to invest.
So here are the facts and figures:
Combined earnings of €62k
No car loans, personal loans, credit card bills etc.
2 cars worth €20k+ (these can be sold if necessary)
SSIA maturing in 07 of €30k (some of this will be used for a wedding though!)
Current house value €275k (€150k owing on the mortgage at 3.2%)
New house value €275k(€290k at 3.4%)
Solicitor charges €1200
Stamp Duty €13750
Rental income at present €888pm
Proposed rental income on new house €1322pm
Combined rental income €2210
Mortgage repayments €2301 - can be reduced to €2080 be extending terms.
So the 2 houses are worth €550k and we would have mortgages for €440k. Personally I feel that even if the houses decline in value and the rental marked drops and the interest rate rises, worst case scenario we sell one of the house and we are not going to end up in debt no matter what because owe have this €110k cushion.
Also if the rental market goes belly up and we can only rent 4 of our 7 rooms at €50 a week instead of the usual €70-85 that would mean we would be taking in 866pm meaning that if we extended the term we would have to pay about €1200pm ourselves into the mortgage. On the salaries we are on and the fact that this is not likely to happen tomorrow and when it does happen we will be earning considerable more it just really leaves us in the same boat as most couples with regards to their mortgage payments?
Maybe I am totally wrong but I would really appreciate any opinions people have given the details.
So here are the facts and figures:
Combined earnings of €62k
No car loans, personal loans, credit card bills etc.
2 cars worth €20k+ (these can be sold if necessary)
SSIA maturing in 07 of €30k (some of this will be used for a wedding though!)
Current house value €275k (€150k owing on the mortgage at 3.2%)
New house value €275k(€290k at 3.4%)
Solicitor charges €1200
Stamp Duty €13750
Rental income at present €888pm
Proposed rental income on new house €1322pm
Combined rental income €2210
Mortgage repayments €2301 - can be reduced to €2080 be extending terms.
So the 2 houses are worth €550k and we would have mortgages for €440k. Personally I feel that even if the houses decline in value and the rental marked drops and the interest rate rises, worst case scenario we sell one of the house and we are not going to end up in debt no matter what because owe have this €110k cushion.
Also if the rental market goes belly up and we can only rent 4 of our 7 rooms at €50 a week instead of the usual €70-85 that would mean we would be taking in 866pm meaning that if we extended the term we would have to pay about €1200pm ourselves into the mortgage. On the salaries we are on and the fact that this is not likely to happen tomorrow and when it does happen we will be earning considerable more it just really leaves us in the same boat as most couples with regards to their mortgage payments?
Maybe I am totally wrong but I would really appreciate any opinions people have given the details.