2-Bed Apartment for 55K - Good buy?

Moyglish

Hi guys,

I know that apartments generally aren't seen as a good investment nowadays, however given that the price of this 2-bed apartment I'm interested in is just 55K, I'm giving it some serious thought.

I would be looking to buy with a view to renting it out.

The apartment is 10 years old and is very spacious. It's in a desirable area, just 4 miles from the city.

I know the general consensus is that apartments are a no-go area at the minute, however after doing some research, it looks like I would make back the price of the apartment after say, 10 years, which seems like a good deal?

I wouldn't be looking for a mortgage or need to take out any loans, so I wouldn't be getting into debt over this.

Average rentals for similar apartments seem to be 650pm.

Would this be worth a punt?

Maintenance fees are around 350 per year - which include insurance.

I'm not new to the renting game, so I know what I would be letting myself in for with regards to PRTB obligations, property fees, dealing with non-paying tenants etc.. I'm not going into this with rose tinted spectacles by any means.

Lyn256

That's a gross return of over 14%.
If it was me and I had your familiarity with being a landlord and the cash I'd seriously consider it!

StillWaters

Remember though if you have no mortgage interest to offset against tax, you're paying about half of your rental income straight to the State.

collie0708

You would be mad not to take out a mortgage as you would be killed with tax,why not find savings account for your cash that earns as much interest as you would pay on the mortgage....win win

whatnext

looks good to me, especially as its cash you are putting down.

Cant see why others are advising getting a mortgage. What you would save in tax would be paid twice in bank interest.
ie if you paid €200 in interest per month, you could save c. €75 in tax per month? Am I missing something here?

gurramok

You'd have to do the maths on this one. Most savings accounts with 55k to lodge in are at about 3% AER and DIRT is now about 33%.

Weigh that against 13.5% return before tax and allowable expenses, you have a serious chance of a sensible investment assuming you know the area well in the prospect of attracting tenants. ie..a high demand area.

jobless

Moyglish wrote: »

Hi guys,

I know that apartments generally aren't seen as a good investment nowadays, however given that the price of this 2-bed apartment I'm interested in is just 55K, I'm giving it some serious thought.

I would be looking to buy with a view to renting it out.

The apartment is 10 years old and is very spacious. It's in a desirable area, just 4 miles from the city.

I know the general consensus is that apartments are a no-go area at the minute, however after doing some research, it looks like I would make back the price of the apartment after say, 10 years, which seems like a good deal?

I wouldn't be looking for a mortgage or need to take out any loans, so I wouldn't be getting into debt over this.

Average rentals for similar apartments seem to be 650pm.

Would this be worth a punt?

Maintenance fees are around 350 per year - which include insurance.

I'm not new to the renting game, so I know what I would be letting myself in for with regards to PRTB obligations, property fees, dealing with non-paying tenants etc.. I'm not going into this with rose tinted spectacles by any means.

i'm assuming this isn't in dublin?

D3PO

on the face of it looks a very good investment. 350 a year maintenance fees doesnt sound realistic though are you sure ?

gaius c

4 miles from what city? Limerick or Dublin? Dublin I'd think about but an apartment 4 miles outside a small provincial city, I wouldn't touch.

Moyglish

Thanks for all the replies guys, appreciate it.

D3PO - yes, €350 for maintenance fees for the year - I've double and triple checked this with the auctioneer, and this also includes insurance. I don't blame you for thinking it was a mistake though - I thought the same at first also.

It's the low maintenance fees that is making this very attractive for me as well.

Gaius C - I don't think you'd find a 2-bed apartment within a 4 mile radius of Dublin these days? I would be snapping it up if it was!

Good city rental wise, the area the apartment is in would have a good name, mainly geared to working professionals / families.

I'm seriously tempted by this place - I have a feeling it may even be gotten a little under the asking price also as it is the bank that is selling it.

RainyDay

What's your overall investment portfolio like? If you have all your eggs in the property basket, you should be diversifying instead.

El_Dangeroso

Moyglish wrote: »

Thanks for all the replies guys, appreciate it.

D3PO - yes, €350 for maintenance fees for the year - I've double and triple checked this with the auctioneer, and this also includes insurance. I don't blame you for thinking it was a mistake though - I thought the same at first also.

It's the low maintenance fees that is making this very attractive for me as well.

Gaius C - I don't think you'd find a 2-bed apartment within a 4 mile radius of Dublin these days? I would be snapping it up if it was!

Good city rental wise, the area the apartment is in would have a good name, mainly geared to working professionals / families.

I'm seriously tempted by this place - I have a feeling it may even be gotten a little under the asking price also as it is the bank that is selling it.

What's the city?

If it's Galway. I know apartments for sale in that range. There is a very good reason for this.

Lantus

Moyglish wrote: »

Thanks for all the replies guys, appreciate it.

D3PO - yes, €350 for maintenance fees for the year - I've double and triple checked this with the auctioneer, and this also includes insurance. I don't blame you for thinking it was a mistake though - I thought the same at first also.

It's the low maintenance fees that is making this very attractive for me as well.

Gaius C - I don't think you'd find a 2-bed apartment within a 4 mile radius of Dublin these days? I would be snapping it up if it was!

Good city rental wise, the area the apartment is in would have a good name, mainly geared to working professionals / families.

I'm seriously tempted by this place - I have a feeling it may even be gotten a little under the asking price also as it is the bank that is selling it.

I would just find out the management company and check their accounts on CRO and or contact them direct. There are far too many people who bought properties and were told similar only to find out the truth was not quite was was being told. The auctioneer will have no legal responsibility in the event that they are wrong or incorrect so their 'word' is not worth anything in this regard. Once you sign the lease you are a member of the company and agree to all its fee's, the auctioneer is not.

Caveat emptor. Its YOUR responsibility to satisfy yourself.

350 does seem low for an apartment but without knowing anything about them it may be correct. The average service fee in Ireland is 1300-1500 for an apartment block. Lifts, lights, insurance, gates, legal fees, accounting and other items etc all add up.

RATM

OP you haven't told us which city the apartment is 4 miles outside of. If it was Galway or Cork the answers might be very different than if it is 4 miles outside Waterford or Limerick.

Of course the apartment might be located near a micro property market- being 4 miles outside Limerick on the road to the Shannon Free Zone where there is a lot of employment might not be so bad and €55k could be excellent value for money if you're sure it'll rent easy for €650pm.

Without knowing it is really difficult to tell if €55k is good value. The price is a function of how easy you can make money out of it which means how easy it will be rented. If you're sure that there is strong consistent demand at €650 pm then it does seem a good value investment, diversification issues aside.

delthedriver

Moyglish wrote: »

Hi guys,

I know that apartments generally aren't seen as a good investment nowadays, however given that the price of this 2-bed apartment I'm interested in is just 55K, I'm giving it some serious thought.

I would be looking to buy with a view to renting it out.

The apartment is 10 years old and is very spacious. It's in a desirable area, just 4 miles from the city.

I know the general consensus is that apartments are a no-go area at the minute, however after doing some research, it looks like I would make back the price of the apartment after say, 10 years, which seems like a good deal?

I wouldn't be looking for a mortgage or need to take out any loans, so I wouldn't be getting into debt over this.

Average rentals for similar apartments seem to be 650pm.

Would this be worth a punt?

Maintenance fees are around 350 per year - which include insurance.

I'm not new to the renting game, so I know what I would be letting myself in for with regards to PRTB obligations, property fees, dealing with non-paying tenants etc.. I'm not going into this with rose tinted spectacles by any means.

Location , location, Locatiion!

Mgmt fees of €350, sounds great value, I have serious doubts though.

Think very carefully before you sign on the dotted line.

Are there better investment vehicles for your cash?

the_syco

El_Dangeroso wrote: »

If it's Galway. I know apartments for sale in that range. There is a very good reason for this.

This. It pays to see who the neighbours are, and to see if any of them own any of the apartments.

F**k your Honda Civic, I've a horse... inside :pac: