Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Sell or rent apartment in Dublin 4?

Options
2»

Comments

  • Options
    #32
    obi604
    Registered Users Posts: 5,615 ✭✭✭obi604


    P. Breathnach wrote: »
    That's not nearly enough information on which to make a recommendation to you, and I see a problem in the way you are looking at things. The mortgage payment is not an expense in the ordinary business meaning of the term: it comprises two elements, interest and loan repayment. If you don't separate those elements in your calculations, you are not going to make a proper business case for renting out the apartment.

    You don't think of mentioning management charges, which I imagine might be in the region of €1600 p.a. You make no provision for depreciation on the contents. You seem not to have thought about the cost of repairing or replacing any appliances that fail. I could go on, but I hope you get the message: you probably need to sit down and "do the numbers" with somebody who knows the score. And you have to allow for the hassle factor.

    Suppose you let the place out for 12 months, and cleared an after-tax profit of €6000. Would that be good?

    Suppose you then put the property on the market and found that I had made a good guess: that there was no significant increase in property prices in your segment of the market. How would you feel about that?


    Hi, I was covering the management charges, In fact with management charges and mortgage, the cost is 800 Euro a month.

    I know I have left out a lot of things, which is why im coming on this forum to find out, and as you say : depreciation on the contents, cost of repairing or replacing any appliances that fail, tax implications etc etc

    I suppose an after tax profit of 6000 Euro would be decent


  • Options
    #33
    obi604
    Registered Users Posts: 5,615 ✭✭✭obi604


    Victor wrote: »
    You pay income tax and USC (no PRSI) at your highest rate on whatever profit you make, but you are only allowed 75% of the interest as an expense. Repayments of the mortgage are not a deductible expense.


    ok im confused now.

    lets put this in layman's terms.

    Lets say someone pays me 1600 euro a month in rent
    And I pay tax at the higher rate.
    52% of 1600 = 832
    1600-832 = 768

    Does that mean I only get 768 in to my pocket after tax ?
    Or am I making a total balls of this ?



    Also, what exactly is the 75% about ?


  • Options
    #34
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    obi604 wrote: »
    ...
    I suppose an after tax profit of 6000 Euro would be decent
    Bear in mind that there is no reason to suppose that it reflects your situation: it's a random figure I tossed in there. Would €4000 be enough to make you happy?

    My core point is that you need to get right down into the numbers, and I think you need a knowledgeable adviser.

    Another point for you to consider: opportunity cost. If you sold the property and redeemed the mortgage, how would you stand financially? Suppose you stood to clear €50k, what other good use might you make of that amount of money?


  • Options
    #35
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    obi604 wrote: »
    ok im confused now.

    lets put this in layman's terms.

    Lets say someone pays me 1600 euro a month in rent
    And I pay tax at the higher rate.
    52% of 1600 = 832
    1600-832 = 768

    Does that mean I only get 768 in to my pocket after tax ?
    Or am I making a total balls of this ?



    Also, what exactly is the 75% about ?
    This post underlines why I think you need to sit down with somebody knowledgeable. There is a distinction to be made between gross rent (your €1600 p.m.) and profit rent, which will be a smaller amount. You will pay tax only on the profit.


  • Options
    #36
    obi604
    Registered Users Posts: 5,615 ✭✭✭obi604


    Victor wrote: »
    You pay income tax and USC (no PRSI) at your highest rate on whatever profit you make, but you are only allowed 75% of the interest as an expense. Repayments of the mortgage are not a deductible expense.
    P. Breathnach wrote: »
    This post underlines why I think you need to sit down with somebody knowledgeable. There is a distinction to be made between gross rent (your €1600 p.m.) and profit rent, which will be a smaller amount. You will pay tax only on the profit.

    But see post 22 from quadrifoglio verde


    "Bear in mind that if you rent it out you'll be paying tax on the entire income before making any mortgage repayments"


  • Advertisement
  • Options
    #37
    The_Morrigan
    Registered Users Posts: 9,368 ✭✭✭The_Morrigan


    obi604 wrote: »
    But see post 22 from quadrifoglio verde


    "Bear in mind that if you rent it out you'll be paying tax on the entire income before making any mortgage repayments"

    .....and this is why boards.ie doesn't like professional advice being sought or given.

    Get in touch with an accountant who can explain the financial obligations for a landlord and contact and solicitor regarding the legalities.


Advertisement