Leaving Ireland for 2 years: set aside deposit money or buy investment property?

JoseDogMan

Here's the sitch: my husband and I are currently living in Dublin and growing incredibly sick of it (insane rent, hotels, hotels, hotels, commutes etc.,)

We both have decent jobs (combined salary 85k+) and have been saving steadily. We have no real debts (bar credit card of €800 which we're paying off every month) and we aim to have about 20k saved by April next year. We have consistently saved between €1,000-€1,500/month for the last year and always pay our (ludicrous) rent on-time.

In a nutshell I think we're pretty good candidates for a mortgage.

But here's the rub: we want out. As I've said we're completely sick of living in Dublin and have both dreamed for several years of living for a few years in Spain. We've spent loads of time there over the years and, whilst I know it's not the standard trajectory, we've made the decision to move there in Aug/Sept next year. Basically it's now and never and it's incredibly important to us.

Our end goal IS to live in Ireland (not Dublin) so my question/thoughts are this: should we buy somewhere before we go, such as an apartment in Dublin, and rent it out while we're away so that we have some income and our money is "working for us" or should we squirrel away our deposit until we're back and ready to buy our forever home in which we want to settle?

I know it's a strange question and I'm sure lots of people will thing we're insane leaving good jobs but hey ho.

Many Thanks,

MicktheMan

Don't buy to rent. Keep saving and buy where and when you're ready to settle down longterm.

JoseDogMan

Cheers for the quick response. May I ask why you think this? Just the headache of being a landlord?

MicktheMan

Risks are way too high for the meagre return plus not sure if you would get the required mortgage (30% deposit required)

topmanamillion

JoseDogMan wrote: »

Our end goal IS to live in Ireland (not Dublin) so my question/thoughts are this: should we buy somewhere before we go, such as an apartment in Dublin, and rent it out while we're away so that we have some income and our money is "working for us" or should we squirrel away our deposit until we're back and ready to buy our forever home in which we want to settle?

Essentially you're wondering what to do with €20,000 when you have it saved.

In the grand scheme of things 20k is not a lot of money for two people to have in a savings account and certainly not enough to allow you to buy a property with a sizeable mortgage and then move out of the country.

Leave it in savings. Its not even enough to get a mortgage right now, Its nothing more than a rainy day fund at the moment.

JoseDogMan

topmanamillion wrote: »

Essentially you're wondering what to do with €20,000 when you have it saved.

In the grand scheme of things 20k is not a lot of money for two people to have in a savings account and certainly not enough to allow you to buy a property with a sizeable mortgage and then move out of the country.

Leave it in savings. Its not even enough to get a mortgage right now, Its nothing more than a rainy day fund at the moment.

That's a really refreshing perspective, thank you. I think we're so caught up in the mindset of property, property, property it's hard to just think: "actually, it's grand. leave it alone for a while."

JoseDogMan

MicktheMan wrote: »

Don't buy to rent. Keep saving and buy where and when you're ready to settle down longterm.

Cheers, no harm to keep saving. I suppose my only concern is that we'll fritter it away but the only people who can control that is us!

the_syco

JoseDogMan wrote: »

so that we have some income and our money is "working for us"

You'll get 50% of the rent, and will need to fix any issues that arise. As you won't be there, the tenant could destroy the place, and you won't know until you evict them.

=-=

Keep the deposit, as you may decide to stay in Spain.

JoseDogMan wrote: »

Cheers, no harm to keep saving. I suppose my only concern is that we'll fritter it away but the only people who can control that is us!

Look at long term accounts, maybe a 5 or 10 year one?

SmartinMartin

JoseDogMan wrote: »

Cheers, no harm to keep saving. I suppose my only concern is that we'll fritter it away but the only people who can control that is us!

Stick it in prize bonds, you won't spend it then.

The_Conductor

If you buy an Irish investment property and move to Spain- you pay a flatline 20% tax to the Irish taxman- and you have to declare the rental income to the Spanish authorities and pay tax on it there too (note- there is a reciprochal tax agreement between Spain and Ireland- so the Spanish tax will be less the 20% you'll already have paid in Ireland).

Being a landlord in Ireland- is not for the faint hearted- what would you do if a tenant decided to stop paying the rent and you still have the mortgage and other outgoings to pay? It could take 2 years to get vacant possession of the property (if the tenant decides to use the dispute mechanisms for everything they're worth).

I'd be loathe to suggest to someone in Ireland that its a good idea to buy an investment property- however, for someone who isn't going to be around- the risks are exponentially higher.

JoseDogMan

Thanks all! Resounding advice and fresh perspectives all round. Looks like we'll stash our savings until we decide to come home.

Thanks