Investment Query - Maynooth, slightly complicated...

pimlico35

Hello,

Im hoping to get some balanced views on my idea for buying a property near maynooth;

- can buy for cash; so no mortgage etc
- i live abroad but can buy jointly with a parent[not sure how advantageous this is, tax wise, they are retired]
- reason for buying is parent has an % interest in the house (it was bought by my sister some years back & she's now done a runner... so banks are selling it off) and i thought it might be a sure way of getting original investment back plus maybe sell it in a couple of years and make a profit on the investment
- would rent it out in the meantime; hopefully with reliable tenants

My questions:

- is this a good idea in terms of value for money
- im presuming this is a good way to protect fathers interest
- is it more advisable for father to get his own solicitor to protect interest
- are the tax implications too complicated for me further down the line??

Sorry; lots of questions to work out!!!

Many thanks

antoinolachtnai

You just have to work out the numbers. I would really suggest you get an accountant. An accountant will cost some money, but to be honest that will only be the start of it. Owning property is expensive. The tax issues are critical. There are a host of tax issues to consider with something like this.

It is certainly possible to make money in the situation you describe but it is by no means a sure bet. It depends on the price and the rental market. Maynooth is a great spot for renting to students, sure, but that's not what I would call reliable tenants. You can make money at it, sure, but it's not for the faint hearted.

As I understand it, I don't think it would be strictly necessary for your father to get his own solicitor. But it might be advisable. Again, costs are running against you.

I would suggest keeping family and business separate if I were you, if your relatives are not experienced business people especially, but it is up to you.

ted1

remove any kind if emotional connection you have to the property and those involved and ask yourself the question again.

I think its a bad investment

The_Conductor

Despite the fact that your sister has done a runner on it- there is nothing to say she might not turn up in the future and demand a share (or indeed all) of any capital appreciation that may have happened to the property since she bought it.

If you are going ahead with this- legally you will be obliged to have different solicitors (its a damn good idea anyway- but its not possible for the vendor and the purchaser to use the same solicitor any longer).

Is it a good idea? To be brutally honest- I genuinely don't think so.

If you are interested in this property- the cleanest way of acquiring it- is to allow the bank sell it- and buy it from them. Your Dad and your sister can sort out their rights and obligations- separately- as a wholly different transaction. If you try and tidy everything into the one transaction- where the bank doesn't sell the property- and you try to piggyback into the current arrangement- its a recipe for some quite vicious strife with your sister down the road.........

Personally- I'd let the bank sell the property- period. I wouldn't buy it. If I had the money to buy a property in the area, and I was inclined to- I wouldn't touch the one that your Dad and your Sister have screwed up on- there is no strife, like family strife- and you're setting yourself up for some epic family strife if you go down that road- I'd keep an eye out and buy a wholly different property.

Note- the property market in Maynooth/Leixlip/Celbridge/Lucan (read the better parts of West Dublin and North Kildate) is doing weird things. Its entirely possible that you could be looking at price falls in the immediate to medium term- and on top of that you have penal taxation regimes that apply to landlords- the only reason for being a landlord- is if you can buy the property with debt- as 75% of the interest on mortgage debt can be offset against rental income before determination of taxable income........

I think its a very bad idea- and to be brutally honest- if I had the money to buy property outright- I certainly wouldn't invest it in Irish property- there is no upside for a landlord who can buy a property outright- taxation of landlords in Ireland is penal- and with the potential downside of significant price falls on the horizon- you'd be better off investing your money almost anywhere else.

Avoid, avoid, avoid..........

pimlico35

Thanks everyone for the extremely useful replies.

Funnily, when I had finished typing the post; my heart had sank (intuition kicking in!) as it just seemed such a bad idea.

I absolutely agree with all that has been said - trying to peace-make in the situation is futile and the financial bits just don't add up.

The Dublin property doesnt even seem to be anyway rational - people losing jobs, getting "internships".... etc and yet prices seem mad.... Not that I can say its any way rational with London prices!

Sit tight, I guess and see what happens.

Best wishes