Trapped in One Bedroom House

The_Conductor

Apply for the pre-school year immediately- if you haven't done so already. I'm not sure of the criteria- but it sounds like your little one could well meet the criteria.

Electric Sheep

Sugarcake wrote: »

Thank you for the replies.

No Pants - The location is important now, it wasn't as important before we had our child, we had researched the area but obviously not enough. The main problem with the location is that it is literally in the middle of no where and not near any family or friends which is very difficult when you have a child. Yes it was a huge mistake but we have made it now and in hindsight we would not have bought that house in that location.

GetWithIt - Our mortgage is €1000 per month, yes thankfully we are on a PTSB Tracker, we are blessed with that. To rent in the area we would like i.e Close to Family, Friends and also convenient to both our workplaces we would get a 3 Bedroom for €600 to €700. As our own home is only One Bedroom I think we could be lucky to get €400 per month. I think we might also loose our Tracker along with our Mortgage Interest Relief if we rented out our home?

I do sympathise, but honestly? You bought a 1 bedroom cottage needing renovation, in the middle of nowhere, for E245 when 3 bedroom houses where you really want to live rent for about 2/3 of that?

In what universe, even during the boom, was that cottage considered worth that?

hi op, im far from an expert on these things but i have seen a friend in quite a similar situation.

you said location is a big issue, i think you should look to move rather than extend.
if you move out of your house, you say you can get maybe 400 a month in rent? so you are left paying the other 600 yourself? but you also say you can rent a bigger house in your prefered location for 600-700?

so say you rent a bigger house for 600, and you have to pay 600 towards your mortgage, then you are only 200 euro worse off a month, and you are living somewhere you want to live and a better quality of life, right?

and i know the rental income is taxable, but i know people that rent houses and everything is put against the rental income from what i see!! the maintanance that they claim to do or maybe do, means that they end up paying hardly any/sometimes no tax on this income.

i dont know OP, but i think for quality of life and to stop the constant worry i would pay an extra 200 or so a month.

pippip

Electric Sheep wrote: »

I do sympathise, but honestly? You bought a 1 bedroom cottage needing renovation, in the middle of nowhere, for E245 when 3 bedroom houses where you really want to live rent for about 2/3 of that?

In what universe, even during the boom, was that cottage considered worth that?

Your comment makes no sense. Your comparing a property price 7 years ago to rent prices now.

Kettleson

Electric Sheep wrote: »

I do sympathise, but honestly? You bought a 1 bedroom cottage needing renovation, in the middle of nowhere, for E245 when 3 bedroom houses where you really want to live rent for about 2/3 of that?

In what universe, even during the boom, was that cottage considered worth that?

May I answer this? What is the point of looking back? The road lies ahead, that's the way to be looking and Sugarcake is doing that, and its not easy.

I have no doubt she and her family will deal with this, you can tell by her open, honest and well reasoned summary of where she feels they are at.

And the very best of luck to them.

the_syco

Sugarcake wrote: »

The house is 100 Plus Years Old

Crap. Hope it's not protected in any way!

Idbatterim

Op are you working at the moment? i cant see how you could pay 245k for what you describe in the location you describe, even in 2006, unless its on large amount of land, amazing views or had PP for something much more substantial...

The_Conductor

Idbatterim wrote: »

Op are you working at the moment? i cant see how you could pay 245k for what you describe in the location you describe, even in 2006, unless its on large amount of land, amazing views or had PP for something much more substantial...

Depends entirely on where it is- but with a large garden- a pricetag of 200-250 for a cottage with a bit of land even in rural Leitrim, wouldn't have been unusual in 2005-2006.

Ray Palmer

bubblypop wrote: »

and i know the rental income is taxable, but i know people that rent houses and everything is put against the rental income from what i see!! the maintanance that they claim to do or maybe do, means that they end up paying hardly any/sometimes no tax on this income.

There is no way they would get away with paying virtually no tax. Anybody telling you they are is either lying to you or lying to the tax man. There just isn't enough things you can keep claiming tax back on. It may be very dubiously possible for a year but after that not a chance. You still wouldn't end up with the rent tax free as you would need to be spending money on the property to claim the tax so about €400 a month on the property. You don't end up with more money.

The tax man certainly will look at accounts showing somebody putting the entire rental income into a property. It might take a few years but eventually it will be spotted and can be claimed at any time within 6 years of the tax year.

Terrible advice to be very wary of.

The_Conductor

Ray Palmer wrote: »

There is no way they would get away with paying virtually no tax. Anybody telling you they are is either lying to you or lying to the tax man. There just isn't enough things you can keep claiming tax back on. It may be very dubiously possible for a year but after that not a chance. You still wouldn't end up with the rent tax free as you would need to be spending money on the property to claim the tax so about €400 a month on the property. You don't end up with more money.

The tax man certainly will look at accounts showing somebody putting the entire rental income into a property. It might take a few years but eventually it will be spotted and can be claimed at any time within 6 years of the tax year.

Terrible advice to be very wary of.

I agree 100% with Ray.

The biggest single allowance against rental income for landlords before determination of taxable income- is mortgage interest. This is currently at 75% (it used be at 100%) however it is proposed and we have agreed, to abolish it. It looks like the timeframe is a movable feast though- 2015, certainly isn't going to happen.

Even allowing for deductions for wear and tear on fixtures and fittings (flatline over a 5 year basis)- I don't see how its possible to get down to near no tax- without telling serious porkies to the taxman- and if you do this- you will get caught, sooner or later.

Be careful- be very careful

Sugarcake

Thank you for the replies. We bought the house in 2006 for €245k with 100% Mortgage, we were stupid to do this but the Mortgage Broker at the time advised this was for the best. My husband was working in Dublin in a very good job, probably earning up to 3 times as much as he is now and I have been in the same employment without any kind of raise since 2008. We got the house surveyed by an Engineer (the Broker arranged this), the house at that time was good value compared to others we had seen and had great potential. Based on our wages we were actually approved for €300k+ and the Mortgage Broker told us when the time was right we could easily Top-Up our Mortgage to extend and renovate. This of course never actually happened when the backside fell out the economy. The house was valued at €290k (we got this done independently) when we bought it and was on the Market at €295k.

Of course for the last 3 Years or more we have realised the mistake we made and live what that everyday.

the_syco I'm not sure if it is protected, we will have to look into that. We do know some history and it was part of an "Estate" many years ago. There is nothing in the deeds to say it is protected though.

We are honestly just trying to keep positive now at this stage and concentrate on the so many good things we have in our lives. We had a good chat about it last night and I think if we can somehow raise the money to start our extension this could be the way to go. It will add value and space and maybe in a couple of years we could look at selling or renting it out. My husband has prices for everything worked out and as I said he can do all the labour himself and will have plenty of help from family. We will get there and there are so many people in a lot worse situations than us!

Thanks again for all the supportive comments and all of the advice, it has cleared my head a lot and in some ways lifted some of the weight off my shoulders!

No Pants

Is there any land attached to the property that you could rent out to a farmer? Help generate some income for upcoming renovation.

Sugarcake

No Pants wrote: »

Is there any land attached to the property that you could rent out to a farmer? Help generate some income for upcoming renovation.

No unfortunately not near enough for anything like that.

grazeaway

Electric Sheep wrote: »

I do sympathise, but honestly? You bought a 1 bedroom cottage needing renovation, in the middle of nowhere, for E245 when 3 bedroom houses where you really want to live rent for about 2/3 of that?

In what universe, even during the boom, was that cottage considered worth that?

your being a bit harsh. back in 2006 empty sites were making 250k with out PP. the OP and her hubby bought essentially a site and as she says were planning to extend as there was room around it. If you cast your mind back to 06 thats was actually a very sensilble plan. its not her fault things have changed since.

I know your caught for cash at the mo but is there anyway you could but a bit aside to make and extenstion out the back? if you can rope in few mates and call in a few favors from lads in the trade (i dont know if you know any builders) but you can actully add quite a bit onto the house with a bit of clever planning. I may not be at all possible but i said i throw it out there. You can pick up windows and doors from teh like of munster jionery that were made for incomplete order (wrong size colour, etc but still perfect) these can be bought for serious discount and you can build around them. if you make enough to have an extra room it would be a big thing for you. there are plenty of bargins to be got if you know how and where to look.

i was very lucky when i build my house in that my dad and his friends were able to point me in the right direction and help me out, it woul dhave cost me a fortune to get some one to do it for me.

another thing (and again if have no idea if this is suitable for you) would be to get a 2nd hand portocabin and put it out the back to use as an extra room or too. dont scoff many of the newer unit that are used for the schools are actully much better built then many celtic tiger houses. These are insulated and have all the services already. Belive it or not they can be picked up cheap-ish and converted for living. I know of a guy who put one in for a neighbour house eldery parents were living in an old farm house a he couldnt afford to fix it up. The now live in a porto cabin, with double glazing and can move easier around it and it'll proably out live them. It dry, warm and was cheaper then re roofing thier old house.

Sugarcake

Thanks grazeaway, my husband is such a hard worker and great at anything he does so we are very lucky to have this on our side, plus my Dad is great. We will get there now I think if we can stay focused! Extending really seems to be the way forward for us!

syklops

Sugarcake wrote: »

We had a good chat about it last night and I think if we can somehow raise the money to start our extension this could be the way to go. It will add value and space and maybe in a couple of years we could look at selling or renting it out. My husband has prices for everything worked out and as I said he can do all the labour himself and will have plenty of help from family. We will get there and there are so many people in a lot worse situations than us!

Thanks again for all the supportive comments and all of the advice, it has cleared my head a lot and in some ways lifted some of the weight off my shoulders!

I am almost certain that if you upload the list of materials and the costs your husband has worked out, it can be reduced even further. Like the pile of topsoil you wanted to pay someone to get rid of, which was suggested you adverties it free to a good home, I am sure there is someone out there, who possibly frequents this forum with a pile of concrete dusting that needs a home, or a few bricks laying around.

During the hangover from the celtic tiger its easy to feel down, but to be honest, this is how irish people have been building their houses for centuries. You started off with 4 walls and a roof, and you added a wing when you could afford it or lay your hands on the materials.

Stheno

Op you need to consider if you are doing any work that all electrical work now has to be completed by a registered electrician and certified.

The rules changed recently in relation to this.

Sugarcake

Stheno wrote: »

Op you need to consider if you are doing any work that all electrical work now has to be completed by a registered electrician and certified.

The rules changed recently in relation to this.

Thanks for that, my husband has a friend who can sign this off for us, I think there is a fee we will have to pay also.

MeMeJK1

Instead of an extension, could you maybe build an open loft? It obviously depends on the height of your roof but if possible would be a lot cheaper and easier to accomplish. Here are some inspirations: http://www.houzz.com/ideabooks/2285951/list/Easy-Green--10-Tiny-Homes-That-Live-Large

Sugarcake

syklops wrote: »

I am almost certain that if you upload the list of materials and the costs your husband has worked out, it can be reduced even further. Like the pile of topsoil you wanted to pay someone to get rid of, which was suggested you adverties it free to a good home, I am sure there is someone out there, who possibly frequents this forum with a pile of concrete dusting that needs a home, or a few bricks laying around.

During the hangover from the celtic tiger its easy to feel down, but to be honest, this is how irish people have been building their houses for centuries. You started off with 4 walls and a roof, and you added a wing when you could afford it or lay your hands on the materials.

Thanks syklops I will do that. I have actually already bought a door months ago, I got it for €200 and Munster had quoted us almost 4 times that, I have bought two Velux Windows Brand New also for less than a Quarter of their cost, I actually bought these with money we were saving to try go away for a few days this year so please don't anyone ask how I could afford these. We are okay regarding Windows, we can just be creative and use the ones we have again. The good thing about him doing the work is sizes don't make a difference we can use what we can pick up cheap. Both of us keep up to date on buying sites, we are trying to just pick up what we can. We only need to get Blocks which my husband said are very cheap, timber he has went to a local yard in Wicklow for prices, slates which are really proving to be most expensive. We will have plenty more along the way, in fairness he has a note book with each stage and what we will need and cheapest prices he has got. We are not thinking about finishing's like floors or anything, they will all happen when they happen!

Sugarcake

MeMeJK1 wrote: »

Instead of an extension, could you maybe build an open loft? It obviously depends on the height of your roof but if possible would be a lot cheaper and easier to accomplish. Here are some inspirations: http://www.houzz.com/ideabooks/2285951/list/Easy-Green--10-Tiny-Homes-That-Live-Large

Wow they are beautiful! We have really high pitched ceilings but not sure they would be high enough, will run this idea by my husband, thanks.

grazeaway

Sugarcake wrote: »

Thanks syklops I will do that. I have actually already bought a door months ago, I got it for €200 and Munster had quoted us almost 4 times that, I have bought two Velux Windows Brand New also for less than a Quarter of their cost, I actually bought these with money we were saving to try go away for a few days this year so please don't anyone ask how I could afford these. We are okay regarding Windows, we can just be creative and use the ones we have again. The good thing about him doing the work is sizes don't make a difference we can use what we can pick up cheap. Both of us keep up to date on buying sites, we are trying to just pick up what we can. We only need to get Blocks which my husband said are very cheap, timber he has went to a local yard in Wicklow for prices, slates which are really proving to be most expensive. We will have plenty more along the way, in fairness he has a note book with each stage and what we will need and cheapest prices he has got. We are not thinking about finishing's like floors or anything, they will all happen when they happen!

with that much already planned you are well on your way. its a very basic thing but get your foundation right and dont skimp on the underground insulation and water proofing as its the hardest thing get right afterwards. Thrust me if you can build that extention on and once there are 4 walls windows and a roof you wont care about the finishings. i have a sunroom off the kitchen that is still needs to be finished but the windows and doors are in and the cavity insluated. we actuuly have a table and chairs in there and we use it for for meals. we just put carboard on teh floor and we'll finish it when we can afford to.

LINE45

Sugarcake, is it possible that you could talk to your local credit union about consolidating your old debts (mortgage aside) and consolidate them all into one loan from them. Local credit union's are always very good at this. Also if you talk to your mortgage lender you can ask them to increase the term of your mortgage and stretch it out. We were in a similar position and we spoke to our local credit union and borrowed from them to do a two room extension to our home as we had small house as well. Hope this helps

Sugarcake

LINE45 wrote: »

Sugarcake, is it possible that you could talk to your local credit union about consolidating your old debts (mortgage aside) and consolidate them all into one loan from them. Local credit union's are always very good at this. Also if you talk to your mortgage lender you can ask them to increase the term of your mortgage and stretch it out. We were in a similar position and we spoke to our local credit union and borrowed from them to do a two room extension to our home as we had small house as well. Hope this helps

Thanks for that advice, we already have a loan with them of €9k and we have €7k in Shares which of course we can't touch until the loan is repaid, we are paying them back €500 per month, we really struggled when I was on Mat Leave and they agreed we could reduce our repayments to €250 for the duration of my leave, this has left us with approximately €1500 in arrears so I don't think they would allow us to borrow again. I suppose I can only ask though, nothing to loose at this stage. Regarding our Mortgage we took that out over the maximum period we could, I'm almost certain 35 Years again when we were in difficulty we spoke to them and this wasn't possible. At the moment we are just about keeping on top of any repayments and have never went into arrears on our Mortgage.

LINE45

An extension will be slow, but you won't regret it, in the end you will have a beautiful home that you will be able to furnish when you can afford to do it. It took us a while to get ours done and that was the bare minimum walls, floors, windows, doors, roof and electrics but you will get there we did. Best of luck to you and it is great that your husband will be able to do alot of it.

LINE45

I do think you should talk to them, as you are nearly there with only a balance of 1500 left, they are very understanding. In relation to the mortgage you seem to have done all you can do. It is a very tough situation to be in, but keep the spirits up.

Tim Robbins

OP was in similar situation for a three years.

Got married in 2009, wife made redundant during honeymoon and then very quickly pregnant. We lived in apartment bought in 2006 for 250 and worth probably about 140.

The only solution was for both of us to work and watch every penny. She got a job and I got a better one (better money - worse work). We watched every penny for 3 years. did things like gave up pension to save more.

Went back to bank and got another mortgage for a 3 bed semi.

One thing I'd say is when we went to banks:

1. They didn't really care about our pensions or lack of.
2. They didn't really check rigoursly if the apartment was in negative equity or not. We said we planned to rent it out and this would cover mortgage. It was on a tracker with another bank. The reality is it would not cover mortgage if you include expenses such as taxes and management fees.
3. They never went into details about childcare costs
4. I never told them she was pregnant with number 2.

So basically, I should never have got another mortgage. The current house has probably dropped by 25K (the media are misleading people quoting average prices as the millionare houses skew all stats).

But we managed to get out.

Pretty friggin stressful.

I understand somewhat what you are going thru. Terrible.

Fri.Day

Just reading through this thread I was thinking a little outside the box!

You said you`ve plenty of space around the house so could yoe see your way to rent the house around €400 per month and live rentfree in a mobile home/chalet out the back???
Something like this?
http://www.donedeal.ie/mobilehomes-for-sale/mobile-home/5223763
Pwurple`s suggestions re mortgage top ups and your ECCE year coming up will give you a bit of a breather.
It could be as short term as you need as you said 3 years and ye`ll have paid off old loans.
Hope that helps

Sugarcake

Tim Robbins wrote: »

OP was in similar situation for a three years.

Got married in 2009, wife made redundant during honeymoon and then very quickly pregnant. We lived in apartment bought in 2006 for 250 and worth probably about 140.

The only solution was for both of us to work and watch every penny. She got a job and I got a better one (better money - worse work). We watched every penny for 3 years. did things like gave up pension to save more.

Went back to bank and got another mortgage for a 3 bed semi.

One thing I'd say is when we went to banks:

1. They didn't really care about our pensions or lack of.
2. They didn't really check rigoursly if the apartment was in negative equity or not. We said we planned to rent it out and this would cover mortgage. It was on a tracker with another bank. The reality is it would not cover mortgage if you include expenses such as taxes and management fees.
3. They never went into details about childcare costs
4. I never told them she was pregnant with number 2.

So basically, I should never have got another mortgage. The current house has probably dropped by 25K (the media are misleading people quoting average prices as the millionare houses skew all stats).

But we managed to get out.

Pretty friggin stressful.

I understand somewhat what you are going thru. Terrible.

Wow Tim that is a pretty amazing story, delighted to hear you have come out the other side, well done to you both! Do you mind me asking what Bank you were with and did you go to a different Bank or the same for the second mortgage?

Sugarcake

Fri.Day wrote: »

Just reading through this thread I was thinking a little outside the box!

You said you`ve plenty of space around the house so could yoe see your way to rent the house around €400 per month and live rentfree in a mobile home/chalet out the back???
Something like this?
http://www.donedeal.ie/mobilehomes-for-sale/mobile-home/5223763
Pwurple`s suggestions re mortgage top ups and your ECCE year coming up will give you a bit of a breather.
It could be as short term as you need as you said 3 years and ye`ll have paid off old loans.
Hope that helps

That is amazing the amount of space inside that! It is actually not allowed any more to live in Mobile Homes on sites, back gardens etc, I would say something to do with Property Tax but I'm not entirely sure. I know a couple with two small children who were living on their site where they are building their home and the had to remove it from the site and were only given a short amount of time to do this.

Sorry I should have said earlier he wont qualify for ECCE year until next year.