Investment Property (Mortgage) Advice

[kodirl]

I'm looking for advice on purchasing an investment property to rent out. My wife and I currently have a mortgage of 194k on the house we currently live in valued at 320k. Wifes gross salary is 48k p/a and mine is 75k p/a. We are interested in purchasing a new build property in the same locality for 300k that we could rent out for 1,600 per month. Can anyone advise if we can we re-structure our existing mortgage to allow us to purchase the new property or do we require to have a certain amount of savings? Also, how is the income from the rental property taxed?

 

[RedOnion]

300k that we could rent out for 1,600 per mont

I'm going to skip the mortgage question for a minute. I don't think you've made any assessment of this.
This is a gross yield of 6.4%
Before maintenance, insurance, vacant periods....
There are lots of threads about being a landlord - read them before you proceed.

The next thing is,vehicle marginally profitable, it will be cash flow negative. Do you have s spare 500 per month to pay mortgage and tax?

Now, the mortgage.
You need 30% deposit. You could do an equity release on your house, but you won't be able to get 100k.

Think it through properly as a business proposition, and see what questions you come up with. Property investment is not for the faint hearted.

 

[Alistair]

The economics as you have outlined just don't make this a realistic investment. Gross yield needs to be a minimum of 8% if you are funding through borrowing. You need to treat being a landlord as a job, not just something you can dip in and out of when it suits you. If you are intending to self-manage, then you are at the beck-and-call of your customer during evenings, weekends, holidays etc. Currently you run the risk of civil litigation, but the housing minister has been vocal recently (radio/newsprint) stating that there are a number of scenarios which are going to be treated under criminal law.

https://www.irishtimes.com/news/soc...ed-for-breaching-rent-caps-ag-warns-1.3707530

To clarify, the point I am highlighting is that landlords will be treated under criminal law, not civil law. This is a significant change in policy. Given the penal tax treatment of landlords (Income tax, USC and CGT) this is simply not a viable business model for the small BTL investor. I would give BTL residential investment a wide berth. Stay clear.

 

[Palerider]

You are new to AAM, at least you are asking questions but it seems you want to jump into a business without realising just how regulated it is.

Spend an hour researching this site.

This is far from easy, labour intensive at times and not for the faint of heart.

So many one property investment owners have exited the business, ask yourself why.

You have not disclosed your circumstances, Kids etc but you do have a chunky mortgage already that I would be paying down.