selling BTL

Discussion in 'Investments' started by galway_blow_in, Mar 5, 2017.

  1. galway_blow_in

    galway_blow_in Frequent Poster

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    hi everyone , have not posted in a good few months

    anyway , i own a two bed apartment since october 2015 , i bought it with tenants in situ , the tenants were no trouble at all but decided to leave in january as they have bought a home

    anyway , i decided to put the property on the market , the current bid is 25% above what i paid less than eighteen months ago , now the property had a rent review last september and the rent was increased to 850 per month , im selling because i think legislation has become too defensive of delinquent tenants and i could not predict when i might find myself with a tenant who was unwilling to pay on time if at all , add to that the property is a ninety minute drive away , i think i can do better by putting the money into the equity markets , sterling is very attractive right now and im eying up a long established investment trust which has favourable taxation laws in comparison to ETF,s when it comes to CGT

    who thinks im mad ?
     
  2. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Is there debt on it?
     
  3. DCD

    DCD Frequent Poster

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    Galway were all mad.
    I think you know the answer to the question you are asking. For whatever reason since 2015 you attitude to been a landlord has changed. No matter what type or how diversified your investments are been a landlord is not for everyone. Take your profit spend a few bob going mad and invest in assets of your choice. Best of luck.
     
  4. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Also, how much is it worth?

    The yield is important.
     
  5. galway_blow_in

    galway_blow_in Frequent Poster

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    no debt on property , just to add , an uncle is returning to ireland from canada this summer , he has lived there for forty years , he is talking about selling a thirty acre farm he bought in 1974 , i would only be willing to pay 100 k for it but would then hope to plant it in forestry , i think forestry with its tax free status is actually an attractive investment right now

    even it was not possible to buy this land , i would still offload the apartment !
     
  6. galway_blow_in

    galway_blow_in Frequent Poster

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    paid 120 k for it

    rent 850 pm

    management fee = 1100

    you do the math
     
  7. galway_blow_in

    galway_blow_in Frequent Poster

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    my attitude is entirely down to how the states attitude to landlords has developed , i dont mind dealing with broken washing machines etc
     
  8. joe sod

    joe sod Frequent Poster

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    the one great thing about property is that people tend to hang onto it as its not easy to buy and sell, therefore they actually do capture the natural capital gains. With investments like shares etc its too easy to cash out when things get turbulent like a year ago rather than holding onto them for years on end. I know everyone says they are a buy and hold investor until the next shakeout. I got caught a bit myself last year when I sold a few losers for tax loss purposes and then could not bring myself to reinvest after the tax loss month was over so missed out on some of the recovery.
    Is the farm in Ireland or Canada, 100k very cheap for an irish farm of 30 acres, if in canada there is restrictions on non canadians investing in farmland, I think you have to be a bona fida farmer and actually farm it
     
  9. Gordon Gekko

    Gordon Gekko Frequent Poster

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    I'll pass, thanks. I have neither the time nor the inclination to help someone with that kind of attitude.
     
  10. galway_blow_in

    galway_blow_in Frequent Poster

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    the farm is in ireland , you dont have to be a bone fide farm to draw forestry premium , changes were made in the last five years or so

    you would be surprised what has happened the farm land market this past number of years , its fallen very hard and with brexit , is only going to fall further , land is actually cheaper today than it was in 2012 when housing bottomed ( at least in dublin ) so its entirely decoupled from the broader property market , the only farming sector where there is any profit is dairying , 90% of beef farmers would go out of business in the morning were subsidies removed and subsidies come from the EU , the EU is looking shaky going forward and one of its biggest donors is leaving , subsidies are the only thing which allow unviable beef farmers avoid having to sell their farms
     
  11. galway_blow_in

    galway_blow_in Frequent Poster

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    Last edited: Mar 5, 2017
    " attitude "

    ?

    its a common american term ( do the math ) , lived there for a few years back in the day

    anyway

    cost of property was 120 k + stamp duty + legal fees , total = 123 k

    rent per month = 850 x 12 = 10200

    10200 minus management fee of 1100 = 9100

    insurance and property tax = 250 or thereabouts = 8850

    repairs , potential replacement of furniture or electrical items = perhaps 500 per year ( it was more in 2016 )

    so deduct 500 from 8850 = 8350

    in the event of a situation where property was empty for even a few weeks over a few years , im rounding income off to 8000

    yield = 123 k over 8000 = slightly above 6.5%

    now were i to agree to sell the place for the current bid of 150 k , the new owner ( with rents frozen for two years ) would realise a low yield than that
     
    Last edited: Mar 5, 2017
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  12. joe sod

    joe sod Frequent Poster

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    actually I agree but I thought the big shakeout happened after the 2008 recession when the property bubble collapsed, I thought farmland prices were circa 8000 euros an acre . Also once the forestry premiums have been claimed the forestry land has a much lower market value than new land going into forestry because of premiums. Also forestry premiums come from EU aswell, you would imagine that a maturing forest would be higher value than new land with no plantings or investment gone in
     
  13. cremeegg

    cremeegg Frequent Poster

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    Anyone thinking of investing in forestry should read this thread.

    http://www.askaboutmoney.com/threads/investment-in-irish-forestry-funds.6699/

    One of the best things ever on AAM, better than a textbook.

    I believe that there is a preferential rate for farmers.
     
  14. galway_blow_in

    galway_blow_in Frequent Poster

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  15. Brendan Burgess

    Brendan Burgess Founder

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    You need to do the math yourself.

    The relevant yield is the return on the value of your investment. Not the return on what you paid for it.

    Brendan
     
    galway_blow_in likes this.
  16. galway_blow_in

    galway_blow_in Frequent Poster

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    Thanks Brendan

    I never actually viewed it that way , I've a current bid of 150 k, solicitor and estate agent fees will likely come to around 4 k including vat , 146 k over 8 k rent per annum = 5.5 %
     
  17. galway_blow_in

    galway_blow_in Frequent Poster

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    Last edited: Mar 6, 2017
    Farm Land fell like everything else in the crash but then decoupled from the rest of the market, it's cheaper today than it was in 2011

    most land is not used for dairying or growing potatoes or grain , a good beef farmer might be able to make 200 euro profit per acre in a year of good beef prices , if land is 8 k an acre , thats a return of 2.5%

    the average beef farmer looses money each year and eats into their cheque in the post from europe , its a situation which is unsustainable even politically long term , if subsidies reduce going forward , land prices have to drop , this is a good thing in any event as it will allow viable farmers to afford land and expand , scale is absurdly small in this country when it comes to farming
     
    Last edited: Mar 6, 2017
  18. major

    major Registered User

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    Last edited: Mar 6, 2017
    Just on the foresty ,all people with land get the same rate of grant and premium,no more preferential advantage if a farmer/landowner. Also the Irish exchequer funds the forestry not the eu
     
    Last edited: Mar 6, 2017
  19. galway_blow_in

    galway_blow_in Frequent Poster

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    thanks

    as i thought !
     
  20. Bronte

    Bronte Frequent Poster

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    So. 150K - 123 - 4 = Profit 23K. Personal exemption around 2K I think. So 21K @ 30% (can't remember the CGT rate) 6.3K to the government. Leaves you with 15K.

    Personally I find it odd you only went into the business in 2015 and are already jumping back out. At least you can. With an extra 15K.