Property Being Sold with a Life Tenancy in place

cfingers

Claw Hammer wrote: »

Birth cert for one, possibly driving licence , passport etc.

I'm confused. None of the documents you mentioned are in the legal pack. I'm wondering how you know he was born in 1937.

Claw Hammer

cfingers wrote: »

I'm confused. None of the documents you mentioned are in the legal pack. I'm wondering how you know he was born in 1937.

I never said the documents were in the legal pack. I wasn't asked if they were or not. There is enough information in the legal pack to work it out, however.

cfingers

Claw Hammer wrote: »

I never said the documents were in the legal pack. I wasn't asked if they were or not. There is enough information in the legal pack to work it out, however.

Could you explain how you worked it out please? I've read it a few times and all I can find is tenants name.

Graham

Mod Note

folks before you start sharing your Scooby Doo investigative techniques, please keep in mind there is a real person living in that house.

Claw Hammer

cfingers wrote: »

Could you explain how you worked it out please? I've read it a few times and all I can find is tenants name.

I am not prepared to go any further. I said originally that it seems the current occupant was born in 1937. I can't go any further without giving a lot of personal information about the occupant.
The legal pack gives information from which further information may be found.The available information points to the near certainty of the age of the occupant but no warranties can be given. I would be quite happen to bet €100 at odds of 10 to 1 against me that the current occupant was born in the late 1930s.
It is a matter for everybody to do their own research and satisfy themselves.

Claw Hammer

Graham wrote: »

Mod Note

please keep in mind there is a real person living in that house.

I would expect the purchaser hopes that situation will change very shortly after the purchase contract is made.

Rupert Pumpkin

It's an interesting discussion, it is a bit frightening to see some of the misinformation and speculation, but Claw Hammer is providing sound guidance. Scary that anybody might even consider bidding without understanding fully the nature of a life interest. Agree with some comments, that there is an actual person living there, speculating in public about their remaining life seems a bit unpleasant at best. Of course a prudent purchaser will use some very basic skills to privately establish that information themselves.

As regards the property, the purchaser will have to maintain the exterior, which could include the roof. No pre-auction inspection or survey is possible. It is a risky one, could be very profitable in certain circumstances, or be a real nightmare with maintenance obligations and legal battles. It's not something you'll get a mortgage for, so don't even think about signing an auction contract unless you have the funds to complete.

As a pension investment, if you had 210k in cash, and could afford to wait, it might not be a bad one, but alternatively you could buy a rental property now with the same cash and get tax free rental income, so in addition to maintenance and insurance, the property will "cost" you circa 12 to 14k a year in tax-free lost rent. Still, if you got possession within 5 years, and assuming no property collapse, it could be a really good one.
Good luck!

Claw Hammer

Rupert Pumpkin wrote: »

As a pension investment, if you had 210k in cash, and could afford to wait, it might not be a bad one, but alternatively you could buy a rental property now with the same cash and get tax free rental income, so in addition to maintenance and insurance, the property will "cost" you circa 12 to 14k a year in tax-free lost rent. Still, if you got possession within 5 years, and assuming no property collapse, it could be a really good one.
Good luck!

What property be bought for 210K giving tax fee rental income.

Rupert Pumpkin

Any property bought via your Small Self Administered Pension fund will allow the fund earn tax free rental income, tax free CGT. Subject to revenue rule on retirement obviously. But any investment properties owned via your pension generate rental income tax free.

Peregrinus

I think Claw Hammer's point is that 210k is not likely to be enough to buy you a lettable property.

brisan

Peregrinus wrote: »

I think Claw Hammer's point is that 210k is not likely to be enough to buy you a lettable property.

390 or thereabouts on Daft in Dublin alone
Not sure how many are rentable and what rent would be achieved ,but the options are there

Claw Hammer

Peregrinus wrote: »

I think Claw Hammer's point is that 210k is not likely to be enough to buy you a lettable property.

There are lettable properties for around 200k. the tax free issue is what i was interested in. I have looked at this in the context of buying an investment property. The property has to be managed at arms length with approved agents by trustees who have given an undertaking to the Revenue. I am far from satisfied that this model would suit an investment in a single dwelling. There may be no tax but a lot of people have to get fees and commissions.
It appears, for example, that estate agents have to manage the property. there is no possibility of the owner doing a bit of DIY so a burnt out light bulb might incur an electricians call out charge plus the cost of the bulb.

Rupert Pumpkin

Peregrinus wrote: »

I think Claw Hammer's point is that 210k is not likely to be enough to buy you a lettable property.

I thought he was querying the tax free element, which is obviously possible in a SSAP.
As regards properties below 200k, I think you might be looking in the wrong places. There are plenty (and will be even more now) that will cost below that and yield 7-8%, but with property ownership you can get unlucky. One bad tenant can put you off the whole experience, but I have had much worse financial experiences when my pension was invested in managed funds.

I'm not pushing any agenda, just pointing out that if you were committing 200k+ of pension cash to this one in Whitworth, you have to factor in what that could have earned you tax free over the remainder of the life interest (whatever period that turns out to be).

Good luck to anybody bidding, it's a good location. As is always the case though..it's cheap for a reason!

Rupert Pumpkin

Claw Hammer wrote: »

There are lettable properties for around 200k. the tax free issue is what i was interested in. I have looked at this in the context of buying an investment property. The property has to be managed at arms length with approved agents by trustees who have given an undertaking to the Revenue. I am far from satisfied that this model would suit an investment in a single dwelling. There may be no tax but a lot of people have to get fees and commissions.
It appears, for example, that estate agents have to manage the property. there is no possibility of the owner doing a bit of DIY so a burnt out light bulb might incur an electricians call out charge plus the cost of the bulb.

Agreed, you have to set up a SSAP, so it's not just a case of buying a property "with your pension", there is a co-trustee, set-up fees and you need your employer on board as sponsor, (but it will not need to be a trustee, unlike occupational schemes). I've seen commentary that you'd need a fund of circa 150k to 200k to even make it worthwhile, and you can expect set-up fees of about 3k and annual fees of 2-3k, and another trustee fee on property acquisition (it's starting to sound less attractive!). Ideally you need a good starting sum and a very decent salary and the company making a decent contribution for you. You and the co-trustee can borrow (recourse to the property only). Dilosk will lend up to 50%, but at a very penal rate of about 5.5% with legal fees of 2k (in addition to your own solicitor's legal fee on acquisition) and an arrangement fee of .5%. Just listing all these costs emphasizes that you really need to crunch the numbers, and buying a single property will be very cost-heavy initially. I really think if you're borrowing at those rates with those fees, it struggles to make financial sense. The beauty though is that the money you use for the purchase is from pre-tax income, and all rental flows are tax free, and capital gains are tax free (wrapped up in your pension trust of course!).

Like you, I'd have always wanted to do DIY maintenance myself, but the compulsory Letting Agent works out OK, some will mange it for 60 monthly plus VAT, and they don't necessarily stop you attending to any minor repairs yourself. But to be honest they have plumbers, electricians etc and any premium is minimal, they don't gouge, or you'll appoint a different agent.

Anyway, I didn't mean to get into a big SSAP discussion, just that an earlier poster talked about using pension cash to buy it. Some people talk about buying an investment property as a "pension", but they sometimes don't mean "pension" in the true tax-relieved sense. Also I assumed the previous poster from his comment had a SSAP in place with 200k in cash to spare (!) and I was just pointing out that putting it in Whitworth would come with the loss of the tax free rental his SSAP could earn elsewhere.

The SSAP structure is really useful, but definitely not for everyone. If you are lucky enough to be an owner-director of a business that's the real sweet spot, but it works for salaried directors and high-salaried employees as well. Over and out! (It probably sounds like I'm selling these SSAP things...I'm not!)

cfingers

Claw Hammer wrote: »

I am not prepared to go any further. I said originally that it seems the current occupant was born in 1937. I can't go any further without giving a lot of personal information about the occupant.
The legal pack gives information from which further information may be found.The available information points to the near certainty of the age of the occupant but no warranties can be given. I would be quite happen to bet €100 at odds of 10 to 1 against me that the current occupant was born in the late 1930s.
It is a matter for everybody to do their own research and satisfy themselves.

A new document has been uploaded to the legal pack clarifying tenants was born in 1947.

Eric Cartman

if bought it id be right round with a wrap of heroin, pack of fags and a bacon double cheeseburger.

Gael23

The only reason I would partly even consider it was if I was after winning the Lotto as a way of keeping money. Other than that I’d run a mile

Diseased toe

Sold €271,000

The_Conductor

Diseased toe wrote: »

Sold €271,000

I'd love to hear what the justification for this price was from the purchaser. Its significantly more than I thought it would go for (given the facts)- however, maybe it'll end up the steal of the century. Who knows.

Donald Trump

The_Conductor wrote: »

I'd love to hear what the justification for this price was from the purchaser. Its significantly more than I thought it would go for (given the facts)- however, maybe it'll end up the steal of the century. Who knows.

There was a one-bed for sale on the same road on Bidx1 today too. Didn't get a bid at 230k. Vacant possession.


https://bidx1.com/en/en-ie/auction/property/42490


41k more for for the bigger 2 bed in unknown condition plus an unknown number of years before you can actually get effective possession of it.


I wonder at what point would it become a financially worse deal? As in, assuming a reasonable amount of repairs/modernisation needed when possession is gained, how many years waiting rent-free would mean a bad deal?

brisan

Donald Trump wrote: »

There was a one-bed for sale on the same road on Bidx1 today too. Didn't get a bid at 230k. Vacant possession.


https://bidx1.com/en/en-ie/auction/property/42490


41k more for for the bigger 2 bed in unknown condition plus an unknown number of years before you can actually get effective possession of it.


I wonder at what point would it become a financially worse deal? As in, assuming a reasonable amount of repairs/modernisation needed when possession is gained, how many years waiting rent-free would mean a bad deal?

Maybe the life tenant bought it ????

Donald Trump

brisan wrote: »

Maybe the life tenant bought it ????

Yeah maybe they bought it and are hoping that they die tomorrow so that they can have gotten a good deal on it

Graham

Diseased toe wrote: »

Sold €271,000

It would be interesting to see what a comparable house without the life tenancy would be valued at.

Donald Trump

Graham wrote: »

It would be interesting to see what a comparable house without the life tenancy would be valued at.

Well there is the neighbouring (one-bed) house with vacant possession that didn't get a bid at 230 in the same auction today that I linked above

Rows Grower

The_Conductor wrote: »

I'd love to hear what the justification for this price was from the purchaser. Its significantly more than I thought it would go for (given the facts)- however, maybe it'll end up the steal of the century. Who knows.

I'd be fairly confident the purchaser isn't interested in your opinion or in justifying their personal business decisions to you, to be quite honest.

brisan

Donald Trump wrote: »

Yeah maybe they bought it and are hoping that they die tomorrow so that they can have gotten a good deal on it

Or a good deal for his children

Rupert Pumpkin

Went for more than I expected. Comparisons with #3A on the same road which didn't sell at 230k aren't really valid, that's a crappy little infill property built in an old archway I think.
The property next door is on with lisney at 650k https://www.myhome.ie/residential/brochure/1-whitworth-place-drumcondra-dublin-3/4406427
Not worth that, but on the same road, same aspect, and no garden, though already renovated and bigger. No 2 could easily be a three bed I suspect, it has a basement and I think that was a separate flat at one stage. No 4 went for 700k 2 years ago after a full gutting and renovation, and with a much bigger garden (it was bought in 2016 for 240k, so a nice profit for someone..)
I suspect No 2 would easily fetch 350 - 375k, or more, even in bad condition.
Almost all research suggested the life tenant was born in 1937. This was a repeated DOB in multiple places. Solicitors for the life interest holder wrote to the auctioneer the day before the auction to state that the life tenant was in fact born in 1947, and that the "internet is wrong". So i suspect the life tenant was bidding and the letter was intended to cool the price, adding potentially 10 years to all calculations. I've no idea when they were really born, but good luck to them if they bought it, it is their home after all. I think the economics are pretty simple, the life tenant, if they brought the freehold, could surrender the life interest, and bring it back to the market unencumbered, and turn 100k profit, tax free I assume as their PPR...

Donald Trump

Rupert Pumpkin wrote: »

Almost all research suggested the life tenant was born in 1937. This was a repeated DOB in multiple places. Solicitors for the life interest holder wrote to the auctioneer the day before the auction to state that the life tenant was in fact born in 1947, and that the "internet is wrong". So i suspect the life tenant was bidding and the letter was intended to cool the price, adding potentially 10 years to all calculations.

<MOD SNIP>

Rupert Pumpkin

<SNIP>

Claw Hammer

I can't see any reason why the life tenant would bid himself. The life tenant has written an autobiography which is also quite vague about his date of birth. Some of the claimed details of his life are difficult to reconcile with the claimed date of birth. He has been quoted in an interview as saying his age is a state secret.
The purchaser of the remainder in 2007 must have had some view about the likely prospects of the occupant and the long term value of the property.