Decided to raise the rent

BoozyBabe

Oh, btw Morning Star.

I think my yield (going from your formula) is 9.8%, which should be ok. Yes?
The rent is covering my mortgage:- i don't have to subsidise it, but the extra profit is being deminished by the move to variable rates & an increase in these rates.
My plan at the minute is to hold on to this property & use the rent (& possibly eventually sale of property) as a pension.

But who knows what will happen, I'm only in my mid-twenties, so that's a long time away.

So, going from all that financial jargon (that I don't really understand) do you think the better option for me would be to keep long term or sell?

MorningStar

BoozyBabe wrote:

Oh, btw Morning Star.

I think my yield (going from your formula) is 9.8%, which should be ok. Yes?
The rent is covering my mortgage:- i don't have to subsidise it, but the extra profit is being deminished by the move to variable rates & an increase in these rates.
My plan at the minute is to hold on to this property & use the rent (& possibly eventually sale of property) as a pension.

But who knows what will happen, I'm only in my mid-twenties, so that's a long time away.

So, going from all that financial jargon (that I don't really understand) do you think the better option for me would be to keep long term or sell?

If you are getting 9.8% on a 10 month calculation you are doing fine. On a 12 month you are still doing OK compared to many others. I am assuming you are paying tax if not sell up. I hate to keep mentioning it but many people avoid it and if you have a mortgage interest relief can be easily make it worth while and it is the law. The tax man will get people in a year just like the non resident accounts. Your plan sounds fine but constantly asses the situation. You should now exactly the fianncial situation of your property. If one tenant refusing to pay the rent for 3-6 months would criple you then you can't really take the risk. You should only gamble with what you have not the banks money which you are being charged interest on.

Keep a property diary and account for your time and various cost. Many people understimate the work involved or all costs. You know you can claim costs on taxis to collect the rent rather than drive. Your furniture is deductable against the income (lots of rules). If you are unsure of thinkg like this you should spend time investigating it as it is worth money to you.

Overall many people underestimate cost and don't look at their entire financial situation. Paying off your home mortgae quickly is often the best thing to do when young.

Lex Luthor

MorningStar.
I put the deposit down 18 months ago and signed 12months ago for €169k. Next phase is selling for €210k. Even at a moderate increase of 5% increase over the next 20yrs, yes I do think it will double in value.

I have a full mortgage on this property. Add my buildings & contents & life assurance to that and subtract what I get for rent, I am paying the difference which is €150/month.

You show me any property in this country that you can buy and rent it out for more than the mortgage. Unless you rent it as a holiday home.

Yes, I declare my rental income, but now I am not going to be paying any tax on it as my outgoings are greater than my rental income.

My own family home was bought 10yrs ago this July and will be fully paid off this July. SO I only have the outgoings of the difference in the rental property.

As for a pension, I think the house is a better investment. The pension I have been paying into, will not mature until I am 60, which is 25yrs away. At that point, I will be allowed take a 25% tax free lump sum and then have the balance pay me over the rest of a term. I don't think I feel I will have full control over it so this option looks better from where I'm sitting.

I base my % as the amount of rent/month of the total purchase price. AFAIK, this is normal. Correct me if I'm wrong. eg. €700/month as a % of €169k is 4.1%

MorningStar

Lex Luthor wrote:

MorningStar.
I put the deposit down 18 months ago and signed 12months ago for €169k. Next phase is selling for €210k. Even at a moderate increase of 5% increase over the next 20yrs, yes I do think it will double in value.

So you dont know how much yearly increase you need to double and you think a 5% increaese is moderate. I suggest you find a report that says 5% is moderate year on year for 20 years. Increses in phase means nothing really, it is a pricing and finance model.

Lex Luthor wrote:

You show me any property in this country that you can buy and rent it out for more than the mortgage. Unless you rent it as a holiday home.

You can't without adding value to the property that is why property investment in this country is not a good idea unless you have another purpose for it. It is a bad investment at current prices and the market. Only novice investors are doing it now that is the point. The people who will get caught are those who don't know what they are doing

Lex Luthor wrote:

Yes, I declare my rental income, but now I am not going to be paying any tax on it as my outgoings are greater than my rental income.

I think you should check that out becasue you can only write off the interest not your entire mortgage. So your expenses can't be written off only a portion. If you don't rent it out you can't write of the expenses

Lex Luthor wrote:

As for a pension, I think the house is a better investment. The pension I have been paying into, will not mature until I am 60, which is 25yrs away. At that point, I will be allowed take a 25% tax free lump sum and then have the balance pay me over the rest of a term. I don't think I feel I will have full control over it so this option looks better from where I'm sitting.

YOU do know you can set up your own pension and you get to decide what happens?

Lex Luthor wrote:

I base my % as the amount of rent/month of the total purchase price. AFAIK, this is normal. Correct me if I'm wrong. eg. €700/month as a % of €169k is 4.1%

That is GROSS rental yield NET rental yield is what you use as I said. You are basically saying 4.1% return is fine even though you are borrowing money at a rate close to that. Do you get the idea. Property goes down in value too you are blindly saying it will increase at least 5% which is extremely optomistic. Can you provide anything saying this is a normal appreciation on property because from my experience that is very very very very optomistic especially given that you are buying at a loss making point. Your choice and sure you can say you think it will go up but you need to be clear that this is a massive gamble and based on hope not sound business sense. How much have you looked at prices? At 35 you must be aware of the property crash in the UK. Fair play to paying your mortgage off in 10 years it still doesn't make irish property a good investment.

Chrissy

Lex Luthor & Morning Star:- Doesn't look like either of ye are going to back down!!!!

How do you go about paying tax on rental income?
Is this part of registering a tenant, or is it something extra you have to do?
Is the tax much? Like, could it be worth your while renting out a property?
Also, Morning Star, was it you who said something about about getting mortgage relief, or something like that, even whilst renting out the property?
I thought you couldn't do this.

I'm thinking of taking the plunge, so all answers to the above would greatly help.
Thanks.

MorningStar

Chrissy wrote:

Lex Luthor & Morning Star:- Doesn't look like either of ye are going to back down!!!!

1)How do you go about paying tax on rental income?
2)Is this part of registering a tenant, or is it something extra you have to do?
3)Is the tax much? 4)Like, could it be worth your while renting out a property?
5)Also, Morning Star, was it you who said something about about getting mortgage relief, or something like that, even whilst renting out the property?
I thought you couldn't do this.

I'm thinking of taking the plunge, so all answers to the above would greatly help.
Thanks.

There is nothing really to back down on, he has made a choice to take a risk I am just pointing out the risks. He isn't denying risks just underestimating them IMHO.

1)You do tax returns and send it to the tax office
2)It is something extra registration is the local council and includes a safety inspection of your property at some point
3) Tax is like any other tax most likely 42%
4) THe short answer is no it is not worth it when buying at current prices as it is a loss making venture and to hope the market rises to make your profit is property speculation which is a big risk unless you know what you are doing. If you rely on a mortgage to buy the property and rent to keep it then you can't afford it.
5) You can get relief on the interest of your mortgage on an investment property. The government have removed this before and are likely to remove this at some point. You effectively increase your tax free allowance by the amount of interest you are paying.

Look at this way do you think it ia a good idea to invest in something you need to borrow money from the bank and pay them interest on, then pay extra money into, the income (keeping your expenditure down) from which is likely to drop when your costs go up, run the risk that a tenant refusing to pay your rent puts you into massive debt! That is just the basics plus it can be a lot of work.
You should be getting a return from your work

Lex Luthor

MS, my mortgage interest + capital expenses (over 8yrs) + other expenses > rental income => not liable to pay tax.

I know I can only claim when I have it rented out.

The price the current houses in the estate of course reflect what mine is worth...how else do they gauge it?

So you are saying that if you don't add value, the house will not increase in value? Tell that to my neighbour who bought 9yrs ago at 85k and is now just sold at 380k and has done SFA to his property.

Cantab.

Lex Luthor wrote:

MS, my mortgage interest + capital expenses (over 8yrs) + other expenses > rental income => not liable to pay tax.

I know I can only claim when I have it rented out.

The price the current houses in the estate of course reflect what mine is worth...how else do they gauge it?

So you are saying that if you don't add value, the house will not increase in value? Tell that to my neighbour who bought 9yrs ago at 85k and is now just sold at 380k and has done SFA to his property.

Yes, but MorningStar is not talking about houses that were bought years ago: every dog on the street knows house prices have gone up since 9 years ago.

Buying a house today is not a good idea from an investment perspective. I've just graduated and have just started a new job since last January. I'm renting one of these newly-built, generic, poorly sound-proofed, 2-bed, out-of-town apartment complexes with en-suite for which I'm only paying €450pm. The place is brand new, I'm on the top floor and is fully furnished. The owner occupier that I'm living with is renting the place to me for a loss. I feel sorry for the chap sometimes with all the commuting he does (I work close by), but business is business.

Now try and tell me that buying in one of these generic apartment complexes is a good idea in the current climate??? I'd probably have to take out an uncertain 35 year mortgage rate that I'd be paying about €1800pm for and be lapping up to my bank manager until I'm 60.

I'm getting a taxi plate once my PSV test comes up (next week or two hopefully). Now I have a low milage carina E which I bought for €600, I'm getting a plate for €5000 and insurance will cost me another €5,000. I can rent this car for €200 a week (€10,000 a year), drive it myself maybe one or two days a week (€20-€40 per hour) and write off any expenses I might incur against tax. Anyway, the reason I'm telling everyone this is that there are much better investments, with far lower risk, out there than bloody property which everyone in this country seems so hung up on.

Share dealing is another option which most people rarely consider: Fexco have very low commision charges and the FTSE is absolutely booming these days.

MorningStar

Lex Luthor wrote:

MS, my mortgage interest + capital expenses (over 8yrs) + other expenses > rental income => not liable to pay tax.

I know I can only claim when I have it rented out.

The price the current houses in the estate of course reflect what mine is worth...how else do they gauge it?

So you are saying that if you don't add value, the house will not increase in value? Tell that to my neighbour who bought 9yrs ago at 85k and is now just sold at 380k and has done SFA to his property.

I know what you can claim and what you can't claim and I see that you would have to pay tax on your income from rent and pay extra on your mortgage.

You seem to mix up what is a bad rental investment is and capital appreciation. two years of captial appreciation do not mean a thing. YOur property is only really a good investment if you manage to sell it when it is worth more.

Yes you can make money when prices go up without expenditure it is completely unadvisable to base a property investment purely on a market increase. Look it up on any book on property investment. You have bought a property at the very least near the rop of their climb. Properties are exteremly unlikley to increase at the rate they have in the past 10 years. It has been amazing what has happened and to bank on it happening again over the the next 20 years is unrealistic and exxtremely risky. You might luck out but no finacial advisor would recommend it. If property was cheap it might be worth a risk but it isn't so it is not.

It is extremely likely that people will panic if they can't rent their property out to cover expenses or can't afford to cover the monthly loss. Enough people in this situation will force rent down. Some will panic further and try to sell, enough selling will drive property prices down panic people further in a loss making venture and probably force house prices down further.

Now that could cause an entire crash or more likely a partical crash of the market. Bad investment properties such as cheap appartments in the suburbs away from transport links and houses in bad locations the same. Places away from centres of employment will suffer the most. Right now it is relatively easy to rent out I know and remember what it is like when the market is differnet to what it is like now. You seem to only think of it one way and that that can't change.

BoozyBabe

Cantab. wrote:

Share dealing is another option which most people rarely consider: Fexco have very low commision charges and the FTSE is absolutely booming these days.

I really get your point, but I lost £1000punt a few years back on shares that I really couldn't afford to lose, so I don't think I'll be going back down that route any time soon.

Cantab.

BoozyBabe wrote:

I really get your point, but I lost £1000punt a few years back on shares that I really couldn't afford to lose, so I don't think I'll be going back down that route any time soon.

To make share dealing worth your while, you really ought to be investing about €10k because of the minimum charges associated with performing transactions. Also, you should know something about the company/market.

Also, why did you invest £1000 on shares if you couldn't afford to lose it?

BoozyBabe

Well, I was at college at the time, so it was all I could manage to invest.
Everyone was saying it was a dead cert, so I said why not, if the worst happens, i'll manage. The worst did happen, & i did manage.

Still couldn't really afford it though

MorningStar

BoozyBabe wrote:

Well, I was at college at the time, so it was all I could manage to invest.
Everyone was saying it was a dead cert, so I said why not, if the worst happens, i'll manage. The worst did happen, & i did manage.

Still couldn't really afford it though

Well people telling you something is a dead cert is a a good reason to stay clear of it. Generally the people saying it don't have any clue and are feeding themselves hype.
Property is not a dead cert but Lex is suggesting it least if not actually saying it. 100% in 20 years is optomistic. I can't imagine anybody buying a loss making company and calling it a good investment becasue it will be worth 100% more in 20 years. It is speculation and you would want to know the industry inside out to make and educted guess.

blorg

dochasach is right, interest rate rises are unfortunately your problem and not your tenant's. You will have to justify the rent based on the going rate for comparable properties in the area. If these are indeed going for more then you won't have any problem. (Having said that, my rent went down three years ago and has been static since, looking to buy in the next few months, woo hoo great timing eh.) The key thing is not to try charging over the market rate, as then your tenant will likely leave and you won't be able to replace them. You can of course mention the rates as an _explanation_ of why you are raising the rent but they are not a justification.

Give as much notice as you are happy with, just do it informally and in person first and then once you have done that and the tenant is happy you can drop the formal notice in the mail the next day if you like. Leave the deposit as it is. Do an inspection if you think necessary.

Lex Luthor

blorg wrote:

dochasach is right, interest rate rises are unfortunately your problem and not your tenant's. You will have to justify the rent based on the going rate for comparable properties in the area. If these are indeed going for more then you won't have any problem.

To a point....its not going to take much more of an interest rate hike to stop or slow down the amount of investors coming into the market. Hence less houses to rent, demand outstrips supply and rents inevitabely rise.

MorningStar wrote:

I can't imagine anybody buying a loss making company and calling it a good investment becasue it will be worth 100% more in 20 years.

How is it loss making?
€150/month for 20yrs to probably come away with close to €300k. Even Eddie Hobbs would tell you that buying a property in Ireland & renting it out is a better option than a pension. You would need to be be putting at least €1000/month away at my age into a pension to get a reasonable pay out at 65.

vector

>P.S. Rent must be in keeping with area rents by law

if thats true, then how until some wealthy landlord with a firm of solicitors on retainer disects the relevant legislation for loopholes and manages to control an entire area

MorningStar

Lex Luthor wrote:

To a point....its not going to take much more of an interest rate hike to stop or slow down the amount of investors coming into the market. Hence less houses to rent, demand outstrips supply and rents inevitabely rise.

LOL why do you think people will keep renting? It is more likely sensible investors won't be in the market slowing demand. As prices stagnate people will buy and not need to rent. LEss people renting.

Lex Luthor wrote:

How is it loss making?
€150/month for 20yrs to probably come away with close to €300k. Even Eddie Hobbs would tell you that buying a property in Ireland & renting it out is a better option than a pension. You would need to be be putting at least €1000/month away at my age into a pension to get a reasonable pay out at 65.

You have trouble understanding if you borrow borrow money to invest and the payout from your investment is less than the borrowing and expenses how that is a loss making venture? . You are hoping for the investments asset to increase in value. Other investors won't pay for a loss making venture in 20 years why would they?
Your claims of property price increase is just hope that the assets of the investment will keep on increasing. Eddie Hobbes told people doing the same as you to sell the property as it was a cost and high risk. You need a compound increase of 3.68% on your property year on year for 20 years. Look back and look at the 60-80 and look at property price increases. We are in a boom at the moment things change.

Things you are hoping will happen
1) Prices will increase
2) You will keep being able to rent out your property
3) Expenses won't increase as the property ages
4) Property supply remains limited

That is all over a 20 year period and currently one third of our economy is in the construction industry. THe only reason I guess you think prices will increase is becasue you ahve seen it happen in the last 10--15 years. You should look at what happened before and in the UK.

If you have no mortgage it works out for you personally but it is not a good investment it just happens you can afford to take the risk. Not many people have bought at 25 and managed to pay off their mortgage in 10 years to take such a high risk.

lomb

morningstar there is no loss, his rent probably covers the interest of 4% and the balance of the capital repayments he covers himself. this is a akin to a pension. is paying into a pension loss making in your opinion?
and prices will double in 20 years, ive zero doubt about that. they might collapse in a few years but property is cyclical and i can see doubling as the least return possible.GOOD property is still a termendous investment, i dont care what anyone says.

Lex Luthor

lomb wrote:

morningstar there is no loss, his rent probably covers the interest of 4% and the balance of the capital repayments he covers himself. this is a akin to a pension. is paying into a pension loss making in your opinion?
and prices will double in 20 years, ive zero doubt about that. they might collapse in a few years but property is cyclical and i can see doubling as the least return possible.GOOD property is still a termendous investment, i dont care what anyone says.

The rent is covering 89% of the mortgage. The other 11% plus my house&contents insurance & life assurance is covered by myself.
I still think its a better investment than a pension and at the time I decide to sell, whatever profit I make, all 100% of it, I get to spend as I like. WIth a pension maturing, you don't get it all at once.

MorningStar

lomb wrote:

morningstar there is no loss, his rent probably covers the interest of 4% and the balance of the capital repayments he covers himself. this is a akin to a pension. is paying into a pension loss making in your opinion?
and prices will double in 20 years, ive zero doubt about that. they might collapse in a few years but property is cyclical and i can see doubling as the least return possible.GOOD property is still a termendous investment, i dont care what anyone says.

He has to pay an additional €150 a month to cover costs. That is €150 loss a month that is not in doubt. I understand his logic it is just flawed in any business snese and is speculation. I have been involved in property for a long time and I have seen people come and go. Those lossing money at the start tend to lose money in the long run too as they can't afford the various changes over the period of ownership.

MorningStar

Lex Luthor wrote:

The rent is covering 89% of the mortgage. The other 11% plus my house&contents insurance & life assurance is covered by myself.
I still think its a better investment than a pension and at the time I decide to sell, whatever profit I make, all 100% of it, I get to spend as I like. WIth a pension maturing, you don't get it all at once.

Did you ever work out your net rental yield? as you thought it was 4.1% but it is obviously a negative value? AS you are meant to work it out using a 10 month period to be safe what would it be then?

OUt of courosity how much reseach into property before you bought. Did you read a few books about how to be a landlord or did you jsut work out the figures. I am really curious how people make this decission and how informed they get before doing it.

Afuera

lomb wrote:

and prices will double in 20 years, ive zero doubt about that. they might collapse in a few years but property is cyclical and i can see doubling as the least return possible.GOOD property is still a termendous investment, i dont care what anyone says.

This is crazy. Is GOOD property still a tremendous investment at ANY price? It must be nice to be able to have zero doubt about the unknown future.

This thread is starting to sound more like a religious debate. There are those with blind faith and then there are the sceptics. It'll be awhile yet before there are conversions to either side I'd say.

I think I read about some survey last week where over 80% of people surveyed expected house prices in Ireland to rise by at least 5% every year for the next 5 years. Peoples EXPECTATION of the market is hugely important and unfortunately this kind of expectation will do nothing to slow things down in the short term. The chances of overstepping the mark (if it hasn't already happened) and paying way over the odds for property is really likely under these circumstances. Couple that with the huge SSIA injection that's going to be happening over the next year and it could well spell disaster for the whole economy.

I can just imagine thousands of people receiving their SSIAs and then lining up to pump their winfalls into BTL investment properties. Like lomb and lex they'll be harking on about property only moving in one direction, better than a pension, safe as houses, and mentioning all the people they know that have made their fortune doing this. They'll be taking the Taoiseachs words on board not to listen to the silly economists who've got it all wrong in the past as they join the landlord class and everything will look rosy as the country is awash with cash.

What do you reckon this picture would do to the rental market? How many new landlords would be able to survive if they had their property unlet for months on end or could only rent it out to a tenant at a hugely subsidised rate?

The_Conductor

Afuera wrote:

This thread is starting to sound more like a religious debate. There are those with blind faith and then there are the sceptics. It'll be awhile yet before there are conversions to either side I'd say.

Definitively. It seems that property is the new religion.....

I was surveyed on Grafton Street 2 weeks ago as to what I thought was going to happen to the property market. When I responded that I expected it to further rise slightly before stagnating towards the end of next year and then falling possibly up to 30-35%- the guy started to argue with me.....

I own a house- I don't care if the market falls 35%, I need a roof over my head, and if (and when) I go to move, other property will have similarly fallen. My house is now valued at nearly 16 times my official PAYE income- and this is not unusual for people in the Dublin area.......

If I were to buy my house (now) and finance it with a 100% mortgage and then let it out to tenants- I would need to be earning around 2,500 in rental income per month to make the figures work (taking management fees and other costs into account as well). Actual rent (of the house immediately next door to me) is over a grand less.

Wake up and smell the coffee.....

Afuera wrote:

Couple that with the huge SSIA injection that's going to be happening over the next year and it could well spell disaster for the whole economy.

Not sure that I agree. SSIAs average about 14k maxing at up to 22k- this won't even pay half the stamp duty on a lot of second hand homes in the Dublin market....... Sure people may use it as a deposit- but its of little consequence when its only 3.5-4% of the houseprice.......

Afuera wrote:

What do you reckon this picture would do to the rental market? How many new landlords would be able to survive if they had their property unlet for months on end or could only rent it out to a tenant at a hugely subsidised rate?.

Hence the reason the banks are getting angsty......
They are bringing their liquidity ratios way up in recognition of this factor.......

Lex Luthor

MorningStar wrote:

Did you read a few books about how to be a landlord or did you jsut work out the figures.

No & Yes

MorningStar wrote:

I am really curious how people make this decision and how informed they get before doing it.

Had been looking for a property for at least a year before I bought. Looked at the difference between pension costs & return compared to property. I didn't jump in feet first.
Also spoke to a friend of mine who has 3 properties rented

lomb

Afuera wrote:

Is GOOD property still a tremendous investment at ANY price? It must be nice to be able to have zero doubt about the unknown future.

no of course not, professional investors buy property below market value. there are great deals out there, ive just done one myself for our family. we need it as a place of business so it wouldnt matter too much if the value collapsed. but i could sell today at a 20% gain and contracts have only just been signed.

u need a nose to sniff out quality property at a good price (avoid lisney auctions like the plague as they advertise too much-this is just one example of experiance), just like good property at the right price is a termendous buy , crap property of which there is all too much being built these days eg suburban apartments out of town, and even out of dublin or apartments in tallaght at 400 grand (this is why the builders there are building like no tomorrow, because they know they might not get the 400 tomorrow when people smell the coffee) is a termendous money pit.

there are too many inexperianced investors out there and they will all be burnt ive no doubt about it. many dont have the personal incomes to support vacant property thats not let. alot of commericial property remains unlet for long periods before being snapped up on 20 year leases. the investors owning them know that as they are professionals and can cover it. amateurs dont have a clue and i say that in a nice way.

MorningStar

Lex Luthor wrote:

No & Yes


Had been looking for a property for at least a year before I bought. Looked at the difference between pension costs & return compared to property. I didn't jump in feet first.
Also spoke to a friend of mine who has 3 properties rented

Do you understand that rather than investigating the aspects of how to invest in property and the dangers of it you just investigated what yoou could buy? If you didn't investigate the dangers of investing in property you did jump in feet first.
When did your friend own property? Have they a history of it or was it just the boom period? My family have been in the business for years, you can make money by luck it still isn't a great plan.

Do you now know anything about the UK crash? Are you aware of what happens in a crash. I understand you don't think it will happen but are you aware of the signs and what happens in such an event

I ask again what is your net rental yield? I am guessing you are at about -15% which is 25% below the standard advice. Have you ever watched "Property Ladder"? A show all about property devlopers/investors with expert advise all be it the UK market the same principles apply.

MorningStar

lomb wrote:

no of course not, professional investors buy property below market value. there are great deals out there, ive just done one myself for our family. we need it as a place of business so it wouldnt matter too much if the value collapsed. but i could sell today at a 20% gain and contracts have only just been signed.etc...

If you know what you are doing and you get at below market price you can make money I agree. That is not what people here are saying and it is not what you said earlier.
If you can get property at 20% below market value regularly I would be a little surprised anyway.
There are tons of commercial property unlet for years such as shops just off Grafton street not being let for over 10 years. Only the wealthy can afford to wait that long or pension firms.
THe people here are amature investors who can't afford the risks in general and are risking their homes as a result. No adviosr would say the risk is worth it.

People can make money in property no matter what but those who don't know will lose. Lex is putting himself at higher risk than he is saying.

lomb

MorningStar wrote:

If you know what you are doing and you get at below market price you can make money I agree. That is not what people here are saying and it is not what you said earlier.
If you can get property at 20% below market value regularly I would be a little surprised anyway.
There are tons of commercial property unlet for years such as shops just off Grafton street not being let for over 10 years. Only the wealthy can afford to wait that long or pension firms.
THe people here are amature investors who can't afford the risks in general and are risking their homes as a result. No adviosr would say the risk is worth it.

People can make money in property no matter what but those who don't know will lose. Lex is putting himself at higher risk than he is saying.

indeed u are very correct in what u are saying. a pro can make money even in a downturn if they are clever. people buying property if they dont know what they are doing are taking a large gamble that could destroy their finances and even family life.

i indeed cannot regularly buy property at well below market the deal i did was a once off and a lucky combination of circumstances. i do regularly see great buys that a large sum of money can be made on, all carry risk though. unfortunately i dont have the money to carry out these deals as i see them. if i did though im sure id become a very rich man. the average punter i see considering property in dubai and the costa or flats in tallaght i can only laugh at. they are being taken for a ride, perhaps the ride of their life..

lomb

MorningStar wrote:

Lex is putting himself at higher risk than he is saying.

I wouldnt really say that, even if he bought what i would class as a bad buy, it should still rise somewhat with inflation. besides he didnt pay alot, its 'only' 169k, i reakon its worth a punt at that money anyway. id be nervous on the other hand pumping 400k -500 +stamp into a suburban apartment that will be oversupplyed in years to come, very very nervous tbh.

MorningStar

lomb wrote:

I wouldnt really say that, even if he bought what i would class as a bad buy, it should still rise somewhat with inflation. besides he didnt pay alot, its 'only' 169k, i reakon its worth a punt at that money anyway. id be nervous on the other hand pumping 400k -500 +stamp into a suburban apartment that will be oversupplyed in years to come, very very nervous tbh.

Nobody with experience inproperty would tell a person to rely soley on th emarket to make a profit especially if you are lossing money on a monthly basis. I am surprised with experience you would suggest it is OK. If the money at risk half of your family home you can't afford it. YOu can't take advantages of opportuities due to lack of funds it sounds like you are advising somebody else with a lack of funds to takea risk.
I agree it sounds like Lex can afford the risk but it is not a good buiness idea if you can't afford the risk.

LEX check out this and see what the supply of rental property is like in your area of renting. It can help estimate your potential risk in the event of a down turn. Too much rental property can mean the entire area can devalue rapidly and the same applies to falling rents

http://www.prtb.ie/pubreg.htm