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Renting Out House

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  • 09-04-2016 7:09pm
    #1
    thierry14
    Closed Accounts Posts: 1,480 ✭✭✭


    Hi All

    Just looking for a bit of advice here

    In the process of buying a house, planning to rent it out for a few years as I am tied to my current job location for a while.

    House will be bought straight ( no mortgage )

    Say I rent it out for 700 a month, how much tax would I roughly pay on that?

    Would I come out with 350 a month after tax?

    I earn approx 45k, wife 30k, if that helps.

    Tenants would pay for utilities themselves eg bins, electric, water, tv licence etc

    I would pay prtb and house insurance.


Comments

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    #2
    vicwatson
    Registered Users Posts: 28,403 ✭✭✭✭vicwatson


    Location?


  • Options
    #3
    thierry14
    Closed Accounts Posts: 1,480 ✭✭✭thierry14


    vicwatson wrote: »
    Location?

    Co. Limerick


  • Options
    #4
    Hollister11
    Closed Accounts Posts: 5,482 ✭✭✭Hollister11


    You would be in the higher income tax bracket so 40%. Add in USC, and whatever other taxes are relevant. Probably around half if not more.


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    #5
    Mrs OBumble
    Registered Users Posts: 25,966 ✭✭✭✭Mrs OBumble


    Insurance, tenant costs (advertising, credit checks etc) and maintenance can be claimed as expenses, though. So you'd probably end up with about half of the rent in your pocket at the end of the tax year.


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


    Make sure you do your research and are prepared for the possibility of the tenant not paying rent for 18+ months while you spend thousands in legal fees just to go back into a wrecked shell.

    Ensure you're aware of the minimum standards required and make a decision on whether you're going to manage the property yourself or via an agent. Take their fee's into consideration, although bear in mind you can offset against tax. An hour spent with an accountant will be a wise investment in doing your research.

    Remember a fool and their money are easily parted, it's well worth discussing this plan with a Financial advisor. Is there a better investment strategy that would yield higher returns/similar returns with lower risk. Are you doing this because you're worried about the house prices - what research have you done on that trend? What's the trend on rents in the area?


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