Need advice on investment

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paddy75

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I am living in an estate for 12 years, own a 4 bed house,current market price around 220k and there was a property on the market on sale in same estate and this property was repossessed by bank and it is on market now fro sale. The asking price is around 150k ,it may bit up to 170k on the bid,but the house is in a mess. It needs lots of renovation, may need to spend around 30k(all windows, doors are broken, need full modular kitchen and more). I have mortgage on my PPR for 268k now. I am thinking to invest and buy this house and change it PPR and rent the house current PPR. This will allow to avoid Capital gains in future. I have 50k cash on hand. What would your advise on this. The current rent market for 4 Bed in this area around 1100.

In summary:
Current house price is 220k, paying 1100(interest of 550 euro) euro mortgage/month(on tracker+2.5- interest rate), outstanding mortgage is 268k(48k negative equity).

If i buy the house for 150k and renovate with 30k and move to the house and rent the PPR(where i am living). Do i get the mortgage easily or banks won't give mortgage.

Please give some advise as an investment...If you are the same boat, what would you do.
 
The new Central Bank rules are very tight. the second property would be regarded as a BTL in the eyes of the Bank and the BTL rate applied. The size of your own mortgage would negate any chance in my opinion of you getting a mortgage. That and the hassle of renovating, you would need a good rental yield to make it work.
 
Agent 47 said:
The new Central Bank rules are very tight. the second property would be regarded as a BTL in the eyes of the Bank and the BTL rate applied. The size of your own mortgage would negate any chance in my opinion of you getting a mortgage. That and the hassle of renovating, you would need a good rental yield to make it work.
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Hi Agent 47,
Thanks for your reply and for the post. I will get minimum of 1100 rent, even if get mortgage for 120k with interest rate of 5.1, i pay only 650..where i can make 400 euro after expenses(insurance, repairs)...
Not sure, let me try the mortgage, i have doubt that they may not give mortgage for 2nd property as i have negative equity on my PPR.. Will post when i get the results. Is anybody have the experience of investment.
Please help me to make decision, i know it is up to me to make decision, i am confused as my friends already lost with 2 to 3 houses. I don't want to get it and don't want to be greedy , as long i get 20 percent return on the property in a year, which includes my manual lab-our as i work 3-4 days a week, can able to put my time on this property.
Please give some light on this..
 
I suggest you work out and write the figures on what you want to buy, legal fees, 1% stamp duty, renovate and factor in the rental income to demonstrate affordability to your bank. Then arrange to meet your mortgage advisor in the bank that you have the existing mortgage with and they will use your figures to work out the feasibility of what you want to do. If you don't do this you haven't snowballs chance of convincing your bank to consider seriously what you need.
If the amounts are not looking good then you can query there and the what is distorting the criteria that is preventing you getting the loan. I speak from recent experience of this where no amount of tweeking would allow me get loan approval. If you are not successful then seek out one of the independent mortgage brokers to work through your figures with you.
Best of luck in your endeavors.
 
paddy75 said:
I am thinking to invest and buy this house and change it PPR and rent the house current PPR. This will allow to avoid Capital gains in future.
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Whichever house is not your PPR will incur capital gains going forward. You can't avoid it.
 
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