d2x2 said:Here is my conundrum:
I understand that a mortgage broker or bank would lend me about 4 times my income (i.e. say 200K) towards property; that isn't very much. Now let's say that I wanted a buy-to-let property for 800K (all costs included in this figure).
Would the bank/broker lend me the money if I could show that the property 'pays for itself'?
E.g.:
Monthly Mortgage repayments @ 4% = 2700
Monthly Rental income - minus charges = 3000
Cash flow (positive!) = 300 p.m.
Would this be acceptable? Or would the cash flow have to be a lot more? Any expert advice? Similar experience by anyone?
I'm a first-time property investor with only savings to show and little more in terms of guarantees like other property.
Thanks
d2x2 said:Thanks to stuart and jhegarty for your replies.
More details:
* the rental is for multiple units in a property i.e. the rental of each unit would be an affordable €300 to 400 p.m.
* Regarding the deposit and stamps: without going near 100% finance some banks offer, I would consider other sources of financing than my own assets.
The advice to not invest all savings into one class of assets is a good one although it looks like very few people in Ireland abide by it (and could they ever buy aproperty if they did!)
Having said that, doesn't every new homebuyer put all their savings into one asset?
What about your tax liabilty on your rental income?d2x2 said:E.g.:
Monthly Mortgage repayments @ 4% = 2700
Monthly Rental income - minus charges = 3000
Cash flow (positive!) = 300 p.m.
Are the figures you are quoting the real ones for your case? If so, are you really, really sure that they are realistic? I'm thinking about the old adage that 'if it seems too good to be true, it probably is'. If you post the gross figures (i.e. before charges, fees, insurances, taxes etc) it might help us to understand your situation. How many months vacancy each year have you allowed for? Do you own your own home? If so, do you have any equity here that you could use?d2x2 said:>>> What about your tax liabilty on your rental income?
In the above example consider 3000 (rental - charges) to be the next after charges, fees, insurance, taxes.
So it's for landlords who want to own bed-sit's?
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