Landlord nowadays worth it ?

D

Daddy

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I am contemplating buying a two bed apt easily rentable for 550 per month.

I hear being a landlord nowadays is difficult.

The annual rental is 6600 and mgmt fees are one months rental and 1000 pa maintenance of grounds etc., What other costs are associated with renting out an apartment. It is fully furnished 2 bed costing 70k. I can come up with half and borrow half. From any experienced landlords does this make sense. What can I expect to have left after paying all the other costs and interest and tax on rental income. I would appreciate any advice anyone can give me before I take the step of buying. Thanks.
 
Three words followed correctly will at least set you off on the right foot,research research research.


You are off to a good start,when you are looking at properties/apts do checks on the current property management agents.

What is their reputation like...google them.

What is the sinking fund like?

What are the annual fees?

In newer developments,the snags were not ever completed out,dragged out over the years and large sums of money are now needed to fix these snags.

Has the developer been NAMAED?

Google the particular complex you have in mind,nothing worse than tenants leaving one after the other either due to social problems or paper thin partition walls,tenants tend to post these experiences on fora.

Is there a higher % of owner occupiers (good sign)

How quickly will this rent and for how much..place a dummy ad,see what the response is like (let the phone ring out and return the call,unfair to put callers to expense)


Yield is your friend if you arent getting a good return its simply not worth your time.

Do your sums,right down to the pound shilling and pence,factor in voids and every possible drain/cost on your finances.

Look at how future budgetary measures will impact your business,will tax relief on interest be cut further?

Things to consider,property tax and where will it end?

PRTB Registration

BER certs etc ad nauseum

If there was ever a gravy train in regards to Irish Landlordin it was derailed circa 1999-2000,those days are gone.


How will NAMA possibly impact you?


If I was given the chance to do this all over again I would pass,instead I would spend my days sitting on a bar stool and heading into the bookies every 30 mins and let the State carry me..I would have been better off.


Personally Nama is the elephant in the room for me and the reason I will be staying away from further investment for some time....too many known unknowns.
 

If all goes well, you could be lucky but you need to factor into your calculations what happens when you have a bad tenant who wrecks your investment, doesn't pay the rent, uses the property as a spamspamspam factory or overholds for several months. This is far more prevalent at the lower end of the market where you seem to be aiming.
 
I have just past my 1st year as a reluctant LL, and I am trying to sell my house again.

Its just not for me, despite having good tenants.

Rent supplement has been cut dramatically, and is only going to go a lot lower.
Household charges have arrived and will only get more expensive
There will be a sizeable tax return to be made every year.
Even after one year the house looks like a rental, as compared to how it looked when I lived in it. Wear and tear will be greatly increased with tenants than owner occupiers.

Go into it with your eyes fully open, thats for sure.
 
Just put some rough numbers to it:

Income (assuming full rental) €6600

Expenses
€35000 @ 5% (interest only) €1750
Management fees 1550
Sundry (inc NPPR, HC) 1000
4300
Nominal profit €2300

Expenses allowable for tax
75% interest €1312
Management 1550
Sundry less NPPR, HC 700
3562

Taxable profit €3038
Tax @ 31% 941
or Tax at 52% 1580

So, depending whether you are taxed at lower or higher rate, you would have €1359 or €720 of your actual profit left at the end of the year. Not much is it.
That's assuming full rental, little running costs and not taking into account that household charge /water rates next year will be €1000 to €2000.

Are you still tempted?
 
Thaks for replies.

Many thanks Gervan that is exactly what I wanted.

A real eye opener for sure.
 
also
landlord insurance approx 250 contents only
PRTB every time you change and thereafter if tenant is still in situ - be warned they charge you double the fee if not paid within month of tenant occupancy which is 16o euro
redecorating and cleaning in between tenants
landlord is responsible for any problems plumbing, electrical, broken electrical equipment that you provide - these always come when you least expect it - a good idea is to have an account that deals solely with these unexpected expenses
good luck
 
Don't forget the cost (both in terms of time and money) of advertising and marketing the apt. And finding and vetting the tenants for it. And showing prospective tenants around the apt. And dealing with maintenance issues as they pop up. If you already have a full time job, will you need to take time off to deal with all this, and if you do will it cost you?
 
Also I see Gervans figs don't allow for capital repayments.

Wow being a landlord is tough.

I would have thought with property prices so depressed there would be sense in a buy to let.
The carrot of no CGT if buy and hold for 7 yrs ain't much use when the govt are swallowing up so much of the rental income.
 
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