Buy to Let Investment Property in Ireland-Factors to Consider Before Investing


okay in this video I want to take a look
at vital s property investment in Ireland the landscape here has changed
significantly in the last 10 or 15 years 10 years ago 15 years ago the Irish
property market and the Irish lending market went bananas with the result that
people were buying buy-to-let properties residential in the main apartments for
vital s purposes and most people were doing it on the basis that were trying
to create some sort of a pension for themselves not a lot of people at the
time had pensions and not sure what the current situation is generation the
pensions but most people would have seen property it’s a safe space as a nest egg
for the future as a hedge against inflation and there’s a nice way to
acquire capital and keep a few Bob together and so on so back then 10-15
years ago it was easy enough to get financed for vital debts and you had
ordinary people in ordinary jobs building up these property portfolios
portfolios of apartments or three beds Emmys or whatever in the bite solid
markers then the whole thing came crashing down around about 2009 2010 and
clearly the banking landscape the financial landscape has changed
significantly the lending requirements and the lending guidelines and so forth
have changed dramatically as well it’s not as easy to get money and it is far
more restrictive in terms of credit being advanced by the finance houses but
in any event there’s still a beta debt markers it’s still quite a good
investment depending on your circumstances depending on your capital
depending on what you’re looking for but there’s a couple of things that you will
need to know so the situation as I see it in 2019 is you get a loan for between
five and thirty years and you get a loan to value value advance of between 50 and
70 percent depending on the borrower and depending on the lending institution
this used to be the case or used to be a hundred percent 95 percent whatever and
the great thing about property situation back in the day and
which clearly was a factor in the downfall was that you could buy a
property putting down 5% or 10% of the most and this allowed people to leverage
whatever few above the had and before you knew it with her rising market and
property number one rising value soon people were refinancing
remortgaging buying property number two and the whole thing created a sort of a
ratchet effect with the result two people became massively over extenders
that landscape has changed situation has changed now in relation to finance and
as I say 50 to 70 percent is what you’re looking at in terms of loan to value and
who will depend on where the property is have seen one Bank for example Ulster
Bank where I think they will advance up to seventy percent in the four major
cities in Ireland Dublin Galway Limerick and Cork boss they will only advance 50
percent outside of those four cities so that’s something that you need to
consider another thing you need to consider is the taxation situation
you’re gonna have rental income you are liable for that it’s case five income
you’re also gonna have write-off Stowe against the cost of buying the property
and maintaining it and so on you’re going to have a write-off in terms of
the interest that you’re paying the bank and various payments management company
fees repairs and maintenance and so on and so forth so consider the taxation
situation as well and get accounting advice advice from an accountant who
understands the situation another factor you need to consider is
the bank’s legal costs you’re buying an ordinary house to live in
it’s a residential purchase it’s for your sole occupation it’s not a
residential or it’s not a commercial property it’s not a bite unless you only
have to pay your own legal fees however in a commercial purchase and investment
bite unless you will be expected to pay the bank’s legal costs as well because
the bank will appoint a solicitor to act on their behalf and to ensure that the
property is the their mortgage is secured on the property and it’s
registered with the property registration authority
and so on so they appointed their own solicitor so you want to have the
solicitor appointed by the bank you have to pay their fees you’re gonna have the
solicitor appointed by you you’re gonna have to pay his or her fees as well so
you’re gonna have two sets of legal fees the gangue shop around some of the banks
give subsidy or an incentive or promotion where they pay a certain
percentage or a certain sum of legal fees so shop around have a look at that
the other situation you may be looking at would be an interest-only situation
where you pay interest only for a number of years that is a possibility but it’s
not that common generally the more prudent financial and physical
atmosphere that prevails in early since the crash means that you would be
expected to pay back principal and interest but as to say shop around you
will get lenders who will give interest only but you need to be very very
careful because it’s a little bit like you know taking cocaine or something
getting interest only if the property market Falls are all and you’re only
paying interest no you’re gonna be possibly in negative equity after three
four five years of just paying interest and you may be facing a difficulty then
so that’s something to consider by-and-by our overall then in essence
the property market in Ireland is strong enough certainly the rental market is
very strong there’s a huge demand another thing you need to factor in is
the whole question of the political and therefore nearly legal climbers arising
from the question of homelessness and the difficulty with people getting
accommodation so on the pendulum in terms of landlords rights versus tenants
rights appears have swung quite significantly towards tenants in the
last number of years and there’s quite a lot of safeguards in the legal system
now for tenants the Residential Tenancies board is a body that you’re
going to have to tangle with sooner or later and you do have to register your
property with that body but the difficulty of
tenants not performing in accordance with the letting agreement or damaged
your property or getting tenants out who are not paying and so on these are
difficult enough legal issues difficult enough problems because as I say the
pendulum has swung towards tenants to a great extent it’s difficult to get a
tendency but when you do get it you’re in the strong enough position from a
legal perspective and the landlord can only evict the tenant in very limited
circumstances so you need to factor that into your your decision to invest in a
bite or less in Ireland it may well work out fine if it might prove to be a good
investment it’s entirely a matter for yourself I’m not giving you financial
advice I’m simply pointing out the pros and cons the huge thing of course what
property is that generally you can leverage a relatively small amount of
money by way of a mortgage into a bigger investment whereas if you’re buying
shares for example you are generally unless you’re looking at contracts for
difference which is very very risky you’re generally looking at having to
pay cash or pay at least for your shares so you don’t have the same opportunity
for leverage with shares and you do have a better opportunity for leveraging a
relatively small amount of an issue seed capital to build up some sort of a folio
some sort of a property folio you do need to factor in as well and on the
factor is the question of maintenance and management of your property it is
not a set and forget sort of the situation you may be lucky
you may get a very very good tenant at the outset but you need to factor into
your considerations the fact that you will get an average tenant or indeed
sometimes unfortunately a tenant from hell and that can make things very very
difficult I could tell you some really appalling stories of tenants I’ve had
done through the years you know tenants being arrested taken off and animals for
example dogs being left in the apartment for days and I learned down then to pick
up the rent and not only is the tenant gone but now there’s a dog a statue on
the leg off a table or something you know it’s appalling situation but that
has happened I’ve seen her broken into or not broken into or doors
broken down apartments belonging to me where the searches lawful search is
carried out by unguarded Chicana and again all of these things come back to
the landlord he must pick up the tab and and sorting those so that’s a story hope
you find this video useful if you did give it a thumbs up down below and you
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3 Replies to “Buy to Let Investment Property in Ireland-Factors to Consider Before Investing

  1. By no means am I interested in any type of violence, however I do happen to be 6ft 4 and quite active, if I physically removed my tenants from my rented house with proof of rent default on theur parts, how would the law treat me jail or fine, it would be my first offence,??

  2. Good info, how long does it take for a bank to approve a loan on a buy to rent property and what cost are the solicitors fee's,yours and there's.

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