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Buying a property

  • 12-02-2018 1:39am
    #1
    Joe.com
    Registered Users Posts: 3 ✭


    Hi. Myself and girlfriend are thinking of buying a home together.

    She currently has a two bed apparent and has a mortage of 75k remaining (monthly repayments of 350)brought in 2013
    I have a 3 bed mid terrace house with mortgage of 110k (monthly repayments of 500).brought in 2014
    Our combined earning per year are 95k.

    We have combined saving of 55k and are looking at buying a house for 255k. We are giving some serious thought to renting out the two places and proceeding with a 3rd mortage
    We have been told that the two places would rent for around 2 thousand a month. But after taxes and usc we would earn around 1200 per month.

    Financially is this a good option or are we being greedy. Back to boom time badies.

    Long term with capital gains are we just putting in a lot of work to loose it at the other end.

    Any adivse would be welcomed. Thanks for your time.


Comments

  • #2
    OttoPilot
    Registered Users, Registered Users 2 Posts: 540 ✭✭✭OttoPilot


    Joe.com wrote: »
    Hi. Myself and girlfriend are thinking of buying a home together.

    She currently has a two bed apparent and has a mortage of 75k remaining (monthly repayments of 350)brought in 2013
    I have a 3 bed mid terrace house with mortgage of 110k (monthly repayments of 500).brought in 2014
    Our combined earning per year are 95k.

    We have combined saving of 55k and are looking at buying a house for 255k. We are giving some serious thought to renting out the two places and proceeding with a 3rd mortage
    We have been told that the two places would rent for around 2 thousand a month. But after taxes and usc we would earn around 1200 per month.

    Financially is this a good option or are we being greedy. Back to boom time badies.

    Long term with capital gains are we just putting in a lot of work to loose it at the other end.

    Any adivse would be welcomed. Thanks for your time.

    You probably need to talk to a professional financial/tax advisor if you're going that route.


  • #3
    rockingchair1
    Registered Users Posts: 8 ✭rockingchair1


    I agree with comment re professional advisor. Also it may be useful to read the accommodation forum to get views on the reality of being a landlord in the current climate.


  • #4
    jaffa20
    Registered Users, Registered Users 2 Posts: 4,551 ✭✭✭jaffa20


    I don't think you can deduct the mortgage owed on other properties against the tax from rental income. I read this on boards recently and was shocked myself.


  • #5
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,443 Mod ✭✭✭✭Jim2007


    Let my put it to you this way as a result of last recession, Irish people lost more of their personal wealth that citizens of any other EU state. Contrary to what you might thing that hand nothing to do with the bail out, but everything to do with the assets the held - property!

    When you invest in property, you break every rule of sound investing:
    - You invest in a high risk asset class
    - You borrow to do so
    - You fail to diversify
    - You invest in an illiquid asset
    - Property should not represent more than about 6% of total assets
    - Total mortgage should not exceed about 2 times your income plus 1/2 your partners income

    At this stage you are 100% invested in property and have borrow to do so and now you want to add to that... In which case you are exactly repeating the follies of the past and will be relying on luck rather than sound financial management to get you through.


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