Landlord subsidising tenant

Cityliving said:

Renters may not have the risk (and the hassle!) but they also dont have an asset that will appreciate in the long term.

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If renters invest the money they save by renting they will have a nice appreciating asset in 20/30 years time(if they dont buy by then at a cheaper price)

beattie said:

Do the banks really insist on this? I would find that very hard to believe that many new investors would be able to stump up this 20%.

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Yes and if you can give them 25% deposit there is usually no check on income. The mortgage is granted on the potential rental.

Also, lots of new investors/speculators (whichever you like to call them) borrow this deposit on their PPR. A Bank will also let you borrow the full amount of the investment property depending on the value of your PPR. Where there is a will, there is a way.

CelloPoint said:

I know someone who forked out 430k for a 2-bed flat in Summerhill about a month ago. It won't be built until next year.

He plans to let it out while he goes to work abroad this Autumn. He's paying €2000 a month at current interest rates. He most certainly will be subsidising his tenants - i.

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Why doesn't your friend opt for an interest only mortgage, at least for the first few years? In that way he will make a small yield and have more disposable income.

Whatever about subsidising a tenant by a small amount, 800 a month might lead him into trouble very quickly. The argument may be made that he has an asset which is appreciating, but that's little consolation if the bank comes looking for it due to missed payments!