Buy to Let advice

evolving_doors

Consider letting out to the council for 10 years! (Not the RAS...)..You hand them the keys then closethe door on it untill 2024.

They giveyou 80% the market value every month... So a market rental of 1100 pm would get you 880 every month ... (OF course you have tax and initial costs but depending on your mortgage it might wash its own hands!)..

The_Conductor

Armelodie wrote: »

Consider letting out to the council for 10 years! (Not the RAS...)..You hand them the keys then closethe door on it untill 2024.

They giveyou 80% the market value every month... So a market rental of 1100 pm would get you 880 every month ... (OF course you have tax and initial costs but depending on your mortgage it might wash its own hands!)..

Normally you would still be responsible for maintenance. The council pay you the rent- and tenant the property- but you are responsible for any issues that arise. Its a good secure income- however, its not washing your hands of the management.

Jaybor

Armelodie wrote: »

Consider letting out to the council for 10 years! (Not the RAS...)..You hand them the keys then closethe door on it untill 2024.

They giveyou 80% the market value every month... So a market rental of 1100 pm would get you 880 every month ... (OF course you have tax and initial costs but depending on your mortgage it might wash its own hands!)..

If you add that 20% up over 10 years thats a lot of money to be giving away for a few hours work a month though. €25000 if rents stayed the same over 10 years, which they wont, It might suit some, but its going to cost more than you think.

highly1111

Why don't you buy the apartment and move into it and rent out the second room??

this way, you're not sponging off your folks, wont be living at home at 27 and can actually enjoy your social life a bit more.

also, you can earn €10k tax free by renting a room out (maybe others can clarify if that's still the case) and it means that when you want to move on, you'll have a PPR mortgage rather than a BTL mortgage which the banks would much rather. Also, your mortgage rate would be a lot lower because it won't be a commercial rate.

i know you wont be able to save as much but you'd probably get €500/€550 for the room pretty much tax free & you'd be saving massively on rental tax income.

plus, you get to move out....

marathonic

The_Conductor wrote: »

Normally you would still be responsible for maintenance. The council pay you the rent- and tenant the property- but you are responsible for any issues that arise. Its a good secure income- however, its not washing your hands of the management.

Not for the scheme they are talking about. I know someone with a few Donegal properties rented this way. The council do a snag list and you fix everything before leasing it to them for 10 years (with rent reviews every four). They pay you 20% less than market rent and then you do your own snag list before the council hand the property back.

The other option is RAS, where you get 10% less than market rent but remain responsible for maintenance. I believe RAS works on a 4-year term.

evolving_doors

The_Conductor wrote: »

Normally you would still be responsible for maintenance. The council pay you the rent- and tenant the property- but you are responsible for any issues that arise. Its a good secure income- however, its not washing your hands of the management.

No... not in my experience... Council is liable for ALL maintainance over the 10 years (servicing gas boiler ec.).. the only reason they may contact you is if there is a structural issue with the premises.

evolving_doors

Jaybor wrote: »

If you add that 20% up over 10 years thats a lot of money to be giving away for a few hours work a month though. €25000 if rents stayed the same over 10 years, which they wont, It might suit some, but its going to cost more than you think.

But it's gauranteed rent every month whether your premises is occupied or not... i.e. NO vacancy periods/no refurbishment/no advertising costs/ No tenants ringing to change a lightbulb

Also ...Rent review after 5 years.

I'm not saying that there are no costs but if you do your maths and circumstances (usually boils down to your mortgage amt) are right it 'may' wash it's hands...

EDIT: Of course there are downsides... if things go wrong with where you are living you can't just serve notice on the tenants to leave so you can move back.. Once your gone your gone... The setup costs can be significant (esp legal.) but with appartments there isn;t usually much to do by way of getting it up to spec... If the OP spent the same money on buying say a house then The potential for higher 'rent' may be higher becuase of more bedrooms etc

Jaybor

Armelodie wrote: »

But it's gauranteed rent every month whether your premises is occupied or not... i.e. NO vacancy periods/no refurbishment/no advertising costs/ No tenants ringing to change a lightbulb

Also ...Rent review after 5 years.

I'm not saying that there are no costs but if you do your maths and circumstances (usually boils down to your mortgage amt) are right it 'may' wash it's hands...

EDIT: Of course there are downsides... if things go wrong with where you are living you can't just serve notice on the tenants to leave so you can move back.. Once your gone your gone... The setup costs can be significant (esp legal.) but with appartments there isn;t usually much to do by way of getting it up to spec... If the OP spent the same money on buying say a house then The potential for higher 'rent' may be higher becuase of more bedrooms etc

No vacant periods in Dublin in general unless you are doing something wrong.
Maintenance isnt that expensive.
20% is just too high a premium.
10% maybe with a review every year, but certainly not 20%.

marathonic

I believe the banks prefer that troubled landlords use this scheme too as it guarantees a set loan repayment with no voids and no worries about a mortgage holder in financial difficulty having to come up with money for significant repairs.

Also, I've heard that, whilst banks no longer take rental income into consideration when someone applies for a residential mortgage, they will take this type of rental income into consideration as it is guaranteed.

evolving_doors

Jaybor wrote: »

No vacant periods in Dublin in general unless you are doing something wrong.
Maintenance isnt that expensive.
20% is just too high a premium.
10% maybe with a review every year, but certainly not 20%.

Well that's if you have the perfect tenant and get your timing perfect between leases.

Consider Rent for 1 year at 1,100 pm = 13,200 ..
1 month possible vacancy + general maintainence costs + ongoing expenses (plumber/new washing machine/fridge etc) =12,000 odd + ongoing worries

Now consider rent from council for 1 year at 880 = 10560 (no costs). Indeed there's a difference of 1500 (or more if everything goes perfect!)

Because the OP is a newbie would he go it on his own the first year.. just buy the appt., throw it up on daft and see how he goes!! I can imagine a lot of landlords on here have made most of their expensive mistakes at the start.. The OP could avoid all this by handing it over.

Also as someone mentioned, with this scheme the bank are more likely to give you a 2nd mortgage if the rent is guaranteed and the mortgage is more or less being covered.

Anyway... there's loads of factors to consider but if the OP wants something guaranteed (more so than going it alone ) then I'm just saying it's an option to consider. The devil is in the detail.. (as with any financial investment suggested here).

Santa Cruz

marathonic wrote: »

I'm looking into an investment property in Donegal and don't understand all the negativity. The yields in Dublin seem much better - and I considered looking there but, as I don't know the local market, would be fearful of rents dropping (they seem ridiculously high to me as a person living where rents for a 3-bed semi are about 500 euro per month).

For example, if the OP were to put down a 50% deposit on the property below, they'd have a mortgage of €50,000 on a property giving them €12,000 per year in rental income (obviously, there are expenses - but not to the extent that such an investment would not be worthwhile).

Is there an issue I'm not seeing with the property below (and a similar one that rented for €1,000 per month recently)? I just can't get over the negativity for something like this so there must be something I'm missing.

http://www.daft.ie/sales/31-seagrave-drive-st-margarets-road-finglas-dublin/933874/

http://www.daft.ie/lettings/34-seagrave-way-finglas-dublin/1400888/

You cant compare Donegal rental market with the capital city. Every week there are hundreds of people moving in to Dublin from home and overseas and are looking for accommodation. It's a big problem for Google, Microsoft, Hewlett staff from abroad to get good standard apartments to rent. They have good salaries and want good properties near the city or inner suburbs.
If I had an apartment block of 50 apartments beside the Luas I would be in the door of Google etc offering to reserve the entire block for rental to their staff.

RainyDay

fash wrote: »

I'm not sure if you are trolling now or not: are you actually unaware of greater volatility in equity returns than in rental yields (rent over the money put forward) for good property?

No trolling at all. If you're suggesting that it's such a dumb question, I'd have expected there to be some easily available independent data to support this - an economists report or an academic study? Is this data available, or is this just secret truth that 'everyone' knows but nobody writes down.

fash wrote: »

Do you think investing 100k in current equity markets is safer than buying a say Dublin or Cork city centre property yielding currently 10-12%?

I know that your equity broker won't ring you at 11pm on a Saturday night about a burst pipe. Your broker won't go after your family home of your investment goes bad.

I really don't know what kind of returns equity markets have been providing in recent years, but I certainly know that it's worth being clear on all the risks before getting into such an investment.

marathonic

Santa Cruz wrote: »

You cant compare Donegal rental market with the capital city. Every week there are hundreds of people moving in to Dublin from home and overseas and are looking for accommodation.

On the contrary, I MUST compare the Donegal rental market to the capital city.

The Donegal market is my local market which offers it's own set of advantages - I know the good and bad areas inside out, I know the good and bad tradesmen for when things go wrong, I can manage it myself, etc.

As you indicate above, Dublin has it's own set of advantages but, for me to jump into the Donegal, or the Dublin, market without comparing it to the other wouldn't be the financially prudent thing to do.

Despite what people in Dublin may think, there actually IS a rental market outside Dublin and, even in Donegal, there are towns where rental properties are in high demand (and others where there's an oversupply).

marathonic

RainyDay wrote: »

I know that your equity broker won't ring you at 11pm on a Saturday night about a burst pipe. Your broker won't go after your family home of your investment goes bad.

I know that this is the age-old argument against becoming a landlord. However, if you ask any landlord, such phonecalls at unreasonable times are few and far between. In fact, ANY phone call is few and far between if you maintain your property properly.

On average, most tenants are fine and don't call for the silly things like a blown light bulb. With this in mind, a non-landlord should think to themselves, how many times in the last year has there been a problem in their own house that, had they been tenants, they would have rang their landlord?

Jaybor

marathonic wrote: »

I know that this is the age-old argument against becoming a landlord. However, if you ask any landlord, such phonecalls at unreasonable times are few and far between. In fact, ANY phone call is few and far between if you maintain your property properly.

On average, most tenants are fine and don't call for the silly things like a blown light bulb. With this in mind, a non-landlord should think to themselves, how many times in the last year has there been a problem in their own house that, had they been tenants, they would have rang their landlord?

I never got a phonecall from a tenant outside working hours. And rarely get one during working hours. Now that I have engaged an agent for all of my properties I expext I wont get any calls apart from the odd one from the agent.
Certainly not outside working hours.
And mostly I deal with the agents through email.
Thats for a lot of years with multiple properties.

RainyDay

marathonic wrote: »

I know that this is the age-old argument against becoming a landlord. However, if you ask any landlord, such phonecalls at unreasonable times are few and far between. In fact, ANY phone call is few and far between if you maintain your property properly.

On average, most tenants are fine and don't call for the silly things like a blown light bulb. With this in mind, a non-landlord should think to themselves, how many times in the last year has there been a problem in their own house that, had they been tenants, they would have rang their landlord?

Good to hear it's working out for you. But it doesn't work out that way for everybody. You don't have to search to hard to hear the stories of the nightmare tenants.

Anyone getting in to this business needs to understand the risks involved. Based on the OP, it seems that some people are rushing in without really knowing what they are doing.

marathonic

RainyDay wrote: »

Good to hear it's working out for you. But it doesn't work out that way for everybody. You don't have to search to hard to hear the stories of the nightmare tenants.

Yes, you could say that the landlord business is risky because there is the very odd landlord that will get a nightmare tenant.

You could also say that investing in the stockmarket is risky because there are people that got wiped out in the 'safe as banks' shares of AIB and BOI with their great dividends which you could reinvest to get even more great dividends.

Of course, an investor who understands the risks involved and what they are doing in the stockmarket will be a lot more diversified which will minimise, but not remove, the risk of significant loss - just as a landlord who understands what they are doing will be able to vet the tenant well enough to minimise the risk of a bad tenant.

digzy

I've a 3 bed semi, usual story, neg equity etc...
Anyway its been painted last about 5 years ago. paint still looks great. We've had top tenants so far thank god. there's a new couple moving in who're friends with previous ones so glad to have them. Only problem is that they don't like the paint colours and want it brighter so are asking us to repaint it. about 650 was the quote and 200 for paint. this is in excess of a months rent! plus I don't think its needed-I'd be happy with it. It's in better nick than where I live myself!

Anyway, is it reasonable to suggest they sort it themselves if they've a problem? maybe if we pay for the paint? what's the norm in terms of repainting? its a new enough house too so I don't feel its warranted personally. However, I'm anxious to keep them as I don't fancy the hassle of looking for new tenants. I'm not a professional landlord as I'm sure is clear!

fash

digzy wrote: »

Anyway, is it reasonable to suggest they sort it themselves if they've a problem? maybe if we pay for the paint? what's the norm in terms of repainting? its a new enough house too so I don't feel its warranted personally. However, I'm anxious to keep them as I don't fancy the hassle of looking for new tenants. I'm not a professional landlord as I'm sure is clear!

DO NOT ALLOW THEM TO PAINT IT THEMSELVES! If they want to have it painted - require a professional painter. A tenant who thinks they can paint is liable to use a roller and paint walls, doors, sockets and window frame with that in the same paint- without protection of furniture and simply painting across sockets as if they aren't there.

Other than that- it's up to you. Personally i wouldn't if the paint was ok and repainting is not in accordance with your schedule. Maybe compromise and paint one or two rooms and fresh up the paint only.

marathonic

digzy wrote: »

I've a 3 bed semi, usual story, neg equity etc...
Anyway its been painted last about 5 years ago. paint still looks great. We've had top tenants so far thank god. there's a new couple moving in who're friends with previous ones so glad to have them. Only problem is that they don't like the paint colours and want it brighter so are asking us to repaint it. about 650 was the quote and 200 for paint. this is in excess of a months rent! plus I don't think its needed-I'd be happy with it. It's in better nick than where I live myself!

Anyway, is it reasonable to suggest they sort it themselves if they've a problem? maybe if we pay for the paint? what's the norm in terms of repainting? its a new enough house too so I don't feel its warranted personally. However, I'm anxious to keep them as I don't fancy the hassle of looking for new tenants. I'm not a professional landlord as I'm sure is clear!

In my opinion, don't let them paint and never let a tenant choose their own colour schemes unless it's been a really long-term tenant.

If you paid this €850, what's to stop the tenant dissappearing a little down the line having chosen some really awful colours? You'd then need to repaint for the new tenants.

The only time I'd ever pay for painting as a landlord is where the house needed repainting and I chose the colour - a neutral colour that should go well together with any type of furniture I, or the tenant, happen to put in the house. That way, you're future-proofing the house against this happening again.

That being said, one of my houses is painted in colours of the tenants own choosing. This tenant has been in the property for over 5 years now - and was in the house 3 before I let him do it.

A close family member is a painter and decorator so I agreed that the tenant could buy the paint of his choosing and I'd have it painted.

mdebets

marathonic wrote: »

I'm looking into an investment property in Donegal and don't understand all the negativity. The yields in Dublin seem much better - and I considered looking there but, as I don't know the local market, would be fearful of rents dropping (they seem ridiculously high to me as a person living where rents for a 3-bed semi are about 500 euro per month).

For example, if the OP were to put down a 50% deposit on the property below, they'd have a mortgage of €50,000 on a property giving them €12,000 per year in rental income (obviously, there are expenses - but not to the extent that such an investment would not be worthwhile).

Is there an issue I'm not seeing with the property below (and a similar one that rented for €1,000 per month recently)? I just can't get over the negativity for something like this so there must be something I'm missing.

http://www.daft.ie/sales/31-seagrave-drive-st-margarets-road-finglas-dublin/933874/

http://www.daft.ie/lettings/34-seagrave-way-finglas-dublin/1400888/

I can't speak for the two properties linked above, but what many people are missing, are the risks (of loosing more than just your investment), associated with owing property to be rented out, especially if you only own 1 property and don't have enough of a financial cushion.
While owning and renting out property can give you good returns, you need to diversify (owning more than one property), to be able to absorb these risks.
It's not only the bad tenants (you can weed some of them out with good preparations, but not all of them) who don't pay rent take months to be evicted and destroy your apartment that cost you money. What about the management company not having a big enough sink fund to deal with major problems arising with the house? Do you have enough money to pay your share (or even a bigger one for a repair that needs to be done, but neighbours can't or won't pay). What about if your neighbour has a broken pipe that leaks into your apartment, but is dragging his feet to pay you. You might get the money back eventually, but you also might need to pay the repairs up front, so that you can continue renting out the apartment.
The list can go on and on. If you have only one apartment and no financial backing to absorb these costs, you might loose your apartment, your investment and even more money.

These risks are all very small, compared to the overall rental market, and you might never have one of them, but if you do, it might destroy your retirement money.

handlemaster

mdebets wrote: »

I can't speak for the two properties linked above, but what many people are missing, are the risks (of loosing more than just your investment), associated with owing property to be rented out, especially if you only own 1 property and don't have enough of a financial cushion.í
While owning and renting out property can give you good returns, you need to diversify (owning more than one property), to be able to absorb these risks.
It's not only the bad tenants (you can weed some of them out with good preparations, but not all of them) who don't pay rent take months to be evicted and destroy your apartment that cost you money. What about the management company not having a big enough sink fund to deal with major problems arising with the house? Do you have enough money to pay your share (or even a bigger one for a repair that needs to be done, but neighbours can't or won't pay). What about if your neighbour has a broken pipe that leaks into your apartment, but is dragging his feet to pay you. You might get the money back eventually, but you also might need to pay the repairs up front, so that you can continue renting out the apartment.
The list can go on and on. If you have only one apartment and no financial backing to absorb these costs, you might loose your apartment, your investment and even more money.

These risks are all very smíall, compared to the overall rental market, and you might never have one of them, but if you do, it might destroy your retirement money.

There is no such thing as a save investment if there were everyone would do it. Take your pension fund is it save in the hands of the financial company you pay every month ? Pension funds have been wiped out with the crash. Diversity and not scaremongering is what the OP needs. If he sits on the fence and does nothing he will miss lose out anyhow in the long run with taxes inflation etc

RainyDay

handlemaster wrote: »

Pension funds have been wiped out with the crash.

Not true - 10 year, 5 year, 3 year and 1 year returns all positive per annum figures;

http://www.finfacts.ie/irishfinancenews/article_1026807.shtml

The only funds that got 'wiped out' were the fools who decided that a portfolio full of Irish banks was a smart investment. Anyone who had geographic diversification and industry diversification has done fairly well over time.

mdebets

handlemaster wrote: »

There is no such thing as a save investment if there were everyone would do it. Take your pension fund is it save in the hands of the financial company you pay every month ? Pension funds have been wiped out with the crash. Diversity and not scaremongering is what the OP needs. If he sits on the fence and does nothing he will miss lose out anyhow in the long run with taxes inflation etc

That's what I'm saying, but buying one property is not diversification. You need to diversify in a way, that if one investment goes down, the others can absorb the loss. If you have only one house (especially if bought with a mortgage), the potential loss can be much higher than the investment.
It's not scaremongering, but you need to know all risks to invest, otherwise, you can't really make an informed decision.

handlemaster

mdebets wrote: »

That's what I'm saying, but buying one property is not diversification. You need to diversify in a way, that if one investment goes down, the others can absorb the loss. If you have only one house (especially if bought with a mortgage), the potential loss can be much higher than the investment.
It's not scaremongering, but you need to know all risks to invest, otherwise, you can't really make an informed decision.

the op will start with one... walk before he/she runs and all that

mdebets

handlemaster wrote: »

the op will start with one... walk before he/she runs and all that

And until he does buy more, he will still have the risk of loosing more than he put into it.
House as investment should really be only an addition to other investments, which have a much lower requirement of upfront investment, lower ongoing costs and a lower potential maximum loss if everything goes pear-shaped with the investment.

mdebets

I just thought it might be helpful if expand a little bit on my post above.

I think a house is really a bad investment for a first time investor like the OP for several reasons.

You have a very high up-front cost for the investment (you can't buy a house or apartment for 5000 Euro, you have to put up at least 100,000 and that's really the bare minimum and in most cases not sufficient). Most people would not have this sort of money lying around, so they need to borrow part of the money. This again increases the potential total loss. If you have for example 50,0000 Euro to invest and you invest them in stocks, you can only loose these 50,000 Euro (only talking about normal stocks, nothing exotic). If you invest the same 50,000 Euro into a 200,000 Euro house, you have to borrow 150,000 Euros. Your potential total loss is now 200,000 Euro (plus interest), 4 times your invested money.

You also tie up the money for a long time with a long lead time to get the money back, with only the potential to get all your money back or nothing.
If you need 10.000 Euro of the 50.000 Euro in 5 years time and you have invested it in stock, you can easily (within a few days) sell 10.000 Euro worth of it and keep the rest. If you have a house (and lets presume for the moment you are in positive equity), you need to sell the house (which might take several months). You might also have the problem that the bank won't let you sell it, if you are in negative equity, or you might get problems if you try to repay the mortgage in one go.

In addition to this, you have high ongoing costs (mortgage repayments, maintenance, property tax, finding tenants, time between tenants, day to day management, etc.), compared to just account costs if you have stocks. All of them having the potential to let your property go sour and loose it, if you are unable to pay these costs, even if you have no income due to not finding a tenant.

Obvious, you would have a more stable income with a property than with stocks and a lower overall risk (albeit with a much higher potential maximum loss ), when comparing the overall stock market with the overall property market.

So houses make a good investment choice, if you either are able to afford more than two or three or if you add them to an already existing investment portfolio as a diversification.

*Note: there are obvious other investment choices than stocks and property with different risks and potentials associated, but you need to look beyond the narrow focus and consider all aspects of the investment, to find out, what suits you best, but overall diversification is the key, right from the beginning. If you start out with a monolith investment and plan to diversify later, it might already be to late and your money might be lost by the time you plan to diversify. And buying one property as your first investment is as monolith as you can get.

Jaybor

The main thing with starting off investing in property is low cost of entry and the huge gearing.

I have properties that im getting over €1500 pm for now.

I think my initial outlay on each of them would have been less than €10000 - €15000. Then after that the mortgage and any rent, expenses, tax and so on was covered by the rent until the mortgages were paid off. And on top off that there was a nice healthy profit every month.

So just taking one of them as an example.
For roughly €10000 investment at the start, im now getting €18000 per year. Tax and maintenance etc have to come out of that but its a big return, for just taking €10000 out of my bank account. For 20 years (i was young and stupid, should have went for 30 or 35 year mortgages for the investment) there was mortgage interest (a lot of it on tracker at .5% over ecb) to be paid on it, but mortgage is gone now (was as good as gone when I went on the tracker too) and its almost pure profit.

So I can now either keep getting €18000 per year, probably more next year and each year after that, I can sell it and release several hundred thousand euro in cash, I can remortgage it and buy more property or diversify into a different investment class.

Its horses courses really, and there is a skill in it, but its not rocket science and you can make it involve very little work.

mdebets

Jaybor wrote: »

The main thing with starting off investing in property is low cost of entry and the huge gearing.

I have properties that im getting over €1500 pm for now.

I think my initial outlay on each of them would have been less than €10000 - €15000. Then after that the mortgage and any rent, expenses, tax and so on was covered by the rent until the mortgages were paid off. And on top off that there was a nice healthy profit every month.

So just taking one of them as an example.
For roughly €10000 investment at the start, im now getting €18000 per year. Tax and maintenance etc have to come out of that but its a big return, for just taking €10000 out of my bank account. For 20 years (i was young and stupid, should have went for 30 or 35 year mortgages for the investment) there was mortgage interest (a lot of it on tracker at .5% over ecb) to be paid on it, but mortgage is gone now (was as good as gone when I went on the tracker too) and its almost pure profit.

So I can now either keep getting €18000 per year, probably more next year and each year after that, I can sell it and release several hundred thousand euro in cash, I can remortgage it and buy more property or diversify into a different investment class.

Its horses courses really, and there is a skill in it, but its not rocket science and you can make it involve very little work.

Good for you that it worked out.
But now look at the following scenarios.

You have just bought your first apartment with 10,000 Euro in cash and two years down the line the following happens:
a) your neigbour decides to rent his apartment to the HSE and they move in a very anti-social tenant and you can't rent your apartment because of this.

b) a very expansive repair is due (e.g. lift breaks down), the original builder is no longer in business, so you get no warranty, and the management company has to pay for the repair itself. You now find also out that the sinking fund is not big enough for this, as some owners haven't paid their management fees for a while now?

c) You find out that your tenant, who you think was a really nice guy, with a well paying job in middle management is not really that nice, but has parties all the time, the apartment now looks like a bomb exploded and he isn't really into paying rent or moving out.

Would your story still be the same or would you now still be in a lot of debt without having the asset in return and a very long way to go, to pay it off?

hfallada

mdebets wrote: »

Good for you that it worked out.
But now look at the following scenarios.

You have just bought your first apartment with 10,000 Euro in cash and two years down the line the following happens:
a) your neigbour decides to rent his apartment to the HSE and they move in a very anti-social tenant and you can't rent your apartment because of this.

b) a very expansive repair is due (e.g. lift breaks down), the original builder is no longer in business, so you get no warranty, and the management company has to pay for the repair itself. You now find also out that the sinking fund is not big enough for this, as some owners haven't paid their management fees for a while now?

c) You find out that your tenant, who you think was a really nice guy, with a well paying job in middle management is not really that nice, but has parties all the time, the apartment now looks like a bomb exploded and he isn't really into paying rent or moving out.

Would your story still be the same or would you now still be in a lot of debt without having the asset in return and a very long way to go, to pay it off?

A) if the apartment is in anyway expensive. People won't rent it to HSE. But what can one single tenant in a block do.

you should always look into a sinking fund before buying an apartment. If the sinking fund its too little don't buy.

C) evict the tenant. 98%of tenants are fine. The other 2% cause hassle and when evicted that's usually the end of them