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Becoming a landlord

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  • 29-03-2016 5:52pm
    #1
    wdmfapq4zs83hv
    Closed Accounts Posts: 563 ✭✭✭


    I am considering becoming a landlord. I have a small inheritance of 100k & having a brief look online looks like there are a few properties around this amount in Dublin & surrounding (Kildare Meath ) Anyone like to share in their experience the are the pros & cons? I don't have enough to clear my own mortgage so this seems to be the next best thing investment wise. Do most people use a management company to deal with tenants? What other costs would be associated with buying a property to let?


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    #2
    jack923
    Banned (with Prison Access) Posts: 418 ✭✭jack923


    Deandre Steep Storyteller wrote: »
    I am considering becoming a landlord. I have a small inheritance of 100k & having a brief look online looks like there are a few properties around this amount in Dublin & surrounding (Kildare Meath ) Anyone like to share in their experience the are the pros & cons? I don't have enough to clear my own mortgage so this seems to be the next best thing investment wise. Do most people use a management company to deal with tenants? What other costs would be associated with buying a property to let?

    I'm not to sure but my advice would be to buy a place in a rough area, the prices are really cheap and people rent in them anyway mainly the foreigners and you can still charge pretty much the same price. People will rent a room pretty much anywhere these days


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    #3
    the_syco
    Registered Users Posts: 37,301 ✭✭✭✭the_syco


    Deandre Steep Storyteller wrote: »
    What other costs would be associated with buying a property to let?
    Having to redecorate the entire place along with new electrical goods if you get a nasty tenant who refuses to pay rent for a year, and destroys the place. Along with the money it costs to evict the tenant, or fine for illegally evicting them.


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    #4
    Moonbeam
    Moderators, Education Moderators, Society & Culture Moderators Posts: 18,953 Mod ✭✭✭✭Moonbeam


    I would use it towards your own mortgage ,being a landlord can be expensive and the taxes high .


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    #5
    Speedwell
    Registered Users Posts: 3,809 ✭✭✭Speedwell


    Moonbeam wrote: »
    I would use it towards your own mortgage ,being a landlord can be expensive and the taxes high .

    This. Make sure the bank puts it toward principal, not interest.


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    #6
    audi12
    Banned (with Prison Access) Posts: 890 ✭✭✭audi12


    Moonbeam wrote: »
    I would use it towards your own mortgage ,being a landlord can be expensive and the taxes high .

    A lot of the same people who are telling people not to invest in property were probably telling people in 05 to buy when prices were four times what they are now.

    Not saying you were but just in general. Not a bad time to be buying I am hoping to invest this year maybe would have preferred to but two years ago but couldn't at the time.


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    #7
    newacc2015
    Closed Accounts Posts: 2,379 ✭✭✭newacc2015


    You best choice is student accommodation. Look for one that is a former section tax relief development. They are unique under tenancy law, as the tenants dont have tenancy rights ie they are licensees. This is great, as you evict non-paying tenants swiftly and you can be sure that you can increase rent every year, as they will move out for the summer.


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    #8
    Roselm
    Registered Users Posts: 753 ✭✭✭Roselm


    Have a look at the "Difficult Tenant" thread...


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    #9
    Jen44
    Registered Users Posts: 455 ✭✭Jen44


    dont do it!! I had to rent my first house as it was in a spot of negative equity. Its a nuisance, the costs involved from loss of TRS, tax etc dont make it worth it and the random phonecalls about broken washing machines etc when you werent planning for it are a pain!


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    #10
    Mrs OBumble
    Registered Users Posts: 25,952 ✭✭✭✭Mrs OBumble


    Deandre Steep Storyteller wrote: »
    I am considering becoming a landlord. I have a small inheritance of 100k & having a brief look online looks like there are a few properties around this amount in Dublin & surrounding (Kildare Meath ) .... so this seems to be the next best thing investment wise.


    Properties for 100k in Dublin? Yeah, right ...


    OP, unless you have very good pension savings in place, then I suggest you consult a decent financial advisor. It depends on your circumstances of course, but I'm sure there are better ways to invest 100k.


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    #11
    hytrogen
    Registered Users Posts: 952 ✭✭✭hytrogen


    newacc2015 wrote:
    You best choice is student accommodation. Look for one that is a former section tax relief development. They are unique under tenancy law, as the tenants dont have tenancy rights ie they are licensees. This is great, as you evict non-paying tenants swiftly and you can be sure that you can increase rent every year, as they will move out for the summer.

    So why are so many of those from the 2004 era rounds being sold on now in fragments as private dwellings??..


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    #12
    etoughguy
    Closed Accounts Posts: 344 ✭✭etoughguy


    I don't know your circumstances so cant comment on emergency funds, diversification etc
    I would talk to an accountant first to get some details on the taxes involved

    Expenses are as others mentioned: tax, tenant registration, cost of repairs, appliance breakages, evictions, non payments etc (a good landlord has money aside for all these a bad one thinks oh ffs why did that fooking washing machine break the month I have the nct, new braces for the children and a huge gas bill)
    Can you make money from it - of course but depends on the persons circumstances, say mortgage gone and good tenants then its handy income.
    Its not for the faint hearted but do as much research as you can. I've had no bad tenants in 10 + years, this doesn't make me a good landlord more a lucky one I would say!
    Good luck Theres a website for irish landlords with forums too


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    #13
    hytrogen
    Registered Users Posts: 952 ✭✭✭hytrogen


    Mrs OBumble wrote:
    OP, unless you have very good pension savings in place, then I suggest you consult a decent financial advisor. It depends on your circumstances of course, but I'm sure there are better ways to invest 100k.

    I went into a few last year for some free advice on a similar figure. Most aimed towards Pension funds.. truth is there's no money left in that pot these days so prepare to lose when you come to retirement.
    It's all about trust and security.
    I put the majority of it in my home renovations instead, like new roof windows & doors, kitchen & wash rooms. Total bill was about 65k, the house badly needed it though to be fair. The rest I found a decent savings account with a relatively modest interest rate. I'll look for savings certs & bonds & with the credit union next year when I've a little more in the kitty after I fix the boat up this summer.
    Also why have the Irish this inherent fixation on bricks & mortar and road frontage still? Have we not learned hard facts that noting is secure in concrete??


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    #14
    Speedwell
    Registered Users Posts: 3,809 ✭✭✭Speedwell


    etoughguy wrote: »
    I've had no bad tenants in 10 + years, this doesn't make me a good landlord more a lucky one I would say!

    Nonsense, don't sell yourself short. If you were a bad landlord, your good tenants would find somewhere else to live in short order.


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    #15
    MarkAnthony
    Closed Accounts Posts: 6,934 ✭✭✭MarkAnthony


    OP do the maths, preferably with an FA and accountant. Once you've done that then you'll be in a better position to make a decision. You become a landlord in three scenarios:

    (i) Accidentally
    (ii) Becuase you like the idea of running it as a hobby business
    (iii) You've inside knowledge and have done a huge amount of research into an area/areas and have managed your risk.

    You clearly don't fall into (i) or (iii) so I suggest that unless you WANT to have a little customer service job on the side that can take as little as a few minutes a month or turn into a gigantic albatross of court battles for the love of God don't do it. If you do want a little hobby business then go for it, I'm in category (i) but I do take quite a bit of pleasure from running it I have to admit, and waffling on about it online obviously.


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    #16
    Moonbeam
    Moderators, Education Moderators, Society & Culture Moderators Posts: 18,953 Mod ✭✭✭✭Moonbeam


    audi12 wrote: »
    A lot of the same people who are telling people not to invest in property were probably telling people in 05 to buy when prices were four times what they are now.

    Not saying you were but just in general. Not a bad time to be buying I am hoping to invest this year maybe would have preferred to but two years ago but couldn't at the time.

    I bought in 2006 but thinking ahead in an area with a high need for rental properties.
    It is a great time to buy a family home but not an investment property,the taxes on it are huge.


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    #17
    wdmfapq4zs83hv
    Closed Accounts Posts: 563 ✭✭✭wdmfapq4zs83hv


    Mrs OBumble wrote: »
    Properties for 100k in Dublin? Yeah, right ...


    OP, unless you have very good pension savings in place, then I suggest you consult a decent financial advisor. It depends on your circumstances of course, but I'm sure there are better ways to invest 100k.


    There are properties for 100k in Dublin. A quick browse of my home. Ie will show you.

    Thanks for all the replies it's very interesting!


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    #18
    audi12
    Banned (with Prison Access) Posts: 890 ✭✭✭audi12


    hytrogen wrote: »
    I went into a few last year for some free advice on a similar figure. Most aimed towards Pension funds.. truth is there's no money left in that pot these days so prepare to lose when you come to retirement.
    It's all about trust and security.
    I put the majority of it in my home renovations instead, like new roof windows & doors, kitchen & wash rooms. Total bill was about 65k, the house badly needed it though to be fair. The rest I found a decent savings account with a relatively modest interest rate. I'll look for savings certs & bonds & with the credit union next year when I've a little more in the kitty after I fix the boat up this summer.
    Also why have the Irish this inherent fixation on bricks & mortar and road frontage still? Have we not learned hard facts that noting is secure in concrete??

    Best investment you could ever get is houses to suggest otherwise is lazy talk all depends on the price its bought at. The crash proved nothing only that overpriced property shouldent be bought. I will buy this year and keep buying for years to come while the value is there.


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    #19
    wdmfapq4zs83hv
    Closed Accounts Posts: 563 ✭✭✭wdmfapq4zs83hv


    Moonbeam wrote: »
    I would use it towards your own mortgage ,being a landlord can be expensive and the taxes high .

    I could but that wouldn't generate me any income


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    #20
    Speedwell
    Registered Users Posts: 3,809 ✭✭✭Speedwell


    Deandre Steep Storyteller wrote: »
    I could but that wouldn't generate me any income

    Do you even know how mortgage interest works? Pay the principal down, pay less interest, more money in your pocket.

    Also no house-buying and house-renovating fees to make it suitable for renting, no increased taxes on a rental income, no maintenance costs, etc....


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    #21
    wdmfapq4zs83hv
    Closed Accounts Posts: 563 ✭✭✭wdmfapq4zs83hv


    Speedwell wrote: »
    Do you even know how mortgage interest works? Pay the principal down, pay less interest, more money in your pocket.

    Also no house-buying and house-renovating fees to make it suitable for renting, no increased taxes on a rental income, no maintenance costs, etc....

    No I don't really know how it works. I did contact the bank about paying off a lump off my mortgage and they said it would reduce my term. But I would still be paying the same monthly amount wouldn't I? I'm sure it would save me money in the long run but it's now I need the extra money. Or am I missing something? I'm very green about mortgages / interest etc! I think I do need a financial advisor for sure!


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    #22
    Speedwell
    Registered Users Posts: 3,809 ✭✭✭Speedwell


    Deandre Steep Storyteller wrote: »
    No I don't really know how it works. I did contact the bank about paying off a lump off my mortgage and they said it would reduce my term. But I would still be paying the same monthly amount wouldn't I? I'm sure it would save me money in the long run but it's now I need the extra money. Or am I missing something? I'm very green about mortgages / interest etc! I think I do need a financial advisor for sure!

    Good job. That's what they're for. Much better than a bunch of random schmucks on the Internet :)


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    #23
    Moonbeam
    Moderators, Education Moderators, Society & Culture Moderators Posts: 18,953 Mod ✭✭✭✭Moonbeam


    Deandre Steep Storyteller wrote: »
    No I don't really know how it works. I did contact the bank about paying off a lump off my mortgage and they said it would reduce my term. But I would still be paying the same monthly amount wouldn't I? I'm sure it would save me money in the long run but it's now I need the extra money. Or am I missing something? I'm very green about mortgages / interest etc! I think I do need a financial advisor for sure!

    If you do pay it off your mortgage make sure they take it off the principal and tell them that is what you want. It will save multiples of what you pay off in the long run.


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    #24
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    audi12 wrote: »
    ........ The crash proved nothing only that overpriced property shouldent be bought. I will buy this year and keep buying for years to come while the value is there.

    Is there value there now compared to 3/4 years ago?
    Why didn't you buy than, if you didn't you're late to the party imo.


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    #25
    newacc2015
    Closed Accounts Posts: 2,379 ✭✭✭newacc2015


    hytrogen wrote: »
    So why are so many of those from the 2004 era rounds being sold on now in fragments as private dwellings??..

    Technically you can let to them to whoever you want after 10 years. But these are complexes in student developments. No one in their right mind will live in a development that is 99% students September to May and tourists for the summer.


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    #26
    [Deleted User]
    Posts: 24,714 ✭ [Deleted User]


    Moonbeam wrote: »
    If you do pay it off your mortgage make sure they take it off the principal and tell them that is what you want. It will save multiples of what you pay off in the long run.

    Second time this has been mentioned on the thread, I would have assumed any overpaying or lump sum going against a mortgage would automatically come off the principal it would make nonsense to put it against interest for the bank or the mortgage holder.


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    #27
    pwurple
    Closed Accounts Posts: 12,449 ✭✭✭✭pwurple


    Deandre Steep Storyteller wrote: »
    No I don't really know how it works. I did contact the bank about paying off a lump off my mortgage and they said it would reduce my term. But I would still be paying the same monthly amount wouldn't I? I'm sure it would save me money in the long run but it's now I need the extra money. Or am I missing something? I'm very green about mortgages / interest etc! I think I do need a financial advisor for sure!

    I would not invest in property without fully understanding how mortgages and interest works. A financial advisor will try to sell you a pension or investment fund. That is their primary goal in my experience. Not that that's a bad thing in particular, and maybe it's a better option for you, but understand that is what they will do. Not teach you about your existing loans.

    On your own mortgage, You can pay a lump off the principal, and you then usually have two choices... So if you want option 2, speak to the bank again.

    1) reduce the term, keeping the payments the same
    OR
    2) keep the term the same and reduce the monthly payments.


    And i will echo everyone else... Clearing down debts is often the best place to start (unless you have a tracker on 0.5%!)


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    #28
    the_syco
    Registered Users Posts: 37,301 ✭✭✭✭the_syco


    Deandre Steep Storyteller wrote: »
    I have a small inheritance of 100k & having a brief look online looks like there are a few properties around this amount in Dublin & surrounding (Kildare Meath )
    Generally speaking, the price is generally cheap due to either bad area, bad neighbours, or bad state of the house.

    The first will mean low rent, the second will mean continuous gaps of no rent, and the 3rd means you'll need to input more capital into it to possibly break even, or end up finding that the last owner sold it as it's a money pit.


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    #29
    wdmfapq4zs83hv
    Closed Accounts Posts: 563 ✭✭✭wdmfapq4zs83hv


    pwurple wrote: »
    I would not invest in property without fully understanding how mortgages and interest works. A financial advisor will try to sell you a pension or investment fund. That is their primary goal in my experience. Not that that's a bad thing in particular, and maybe it's a better option for you, but understand that is what they will do. Not teach you about your existing loans.

    On your own mortgage, You can pay a lump off the principal, and you then usually have two choices... So if you want option 2, speak to the bank again.

    1) reduce the term, keeping the payments the same
    OR
    2) keep the term the same and reduce the monthly payments.


    And i will echo everyone else... Clearing down debts is often the best place to start (unless you have a tracker on 0.5%!)

    I actually have a tracker of .80% so fairly lucky there!


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    #30
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,380 CMod ✭✭✭✭Pawwed Rig


    What yield will you get on your investment?
    Bear in mind as a landlord you are required to file a tax return so factor this in too.
    Your personal circumstances will dictate your options.
    IME I have been a landlord for coming on 10 years now and have never made a penny out of it (actually been a significant monthly cost). If I knew then what I know now I would never have gotten into it.
    I can tell you some horror stories.


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    #31
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    Pawwed Rig wrote: »
    What yield will you get on your investment?
    Bear in mind as a landlord you are required to file a tax return so factor this in too.
    Your personal circumstances will dictate your options.
    IME I have been a landlord for coming on 10 years now and have never made a penny out of it (actually been a significant monthly cost). If I knew then what I know now I would never have gotten into it.
    I can tell you some horror stories.

    I think most LL have horror stories. .. Maybe let the OP have some so reality can be viewed


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