Hi
We're thinking of investing in a 2 bed apartment in New Ross in Co. Wexford. This would be our only investment property. We currently live in Dublin (mortgage of €120K, house valued at €500K approx). My wife is from New Ross - we hope to sell in Dublin in the next year or two and move down and build on a site we already have. The sale of the house in Dublin would fund the build and we would clear the mortgage in Dublin as well as having some funds left over.
The apartment we are looking at costs €155K and with an interest only mortgage the repayments at current rates would be in the region of €500 pm for the first 5 years (interest only payments). Rental income from the apartment in the current market would yield €650 pm and demand is strong. This apartment does not have section 23 status. The apartment is on first floor in a two-story block of 10 - there are two such blocks in a private estate of about 90 units (3 bed semis, 4 bed semis and 4 bed dormer detached). Each apartment has it's own entrance (not just one door to the block) and has great views across the river estuary. Waterford is a 15 minute drive, Wexford town is about 25 mins. New Ross and Wexford are also on the de-centralisation list (if that ever happens).
Other apartments in the town which are located in much larger blocks (30 - 40 units) are selling for approx €225K but have Section 23 status. I realise there is tax relief to be had with section 23 but am wondering if it is worth it given this is the only investment property we will have.
I guess the questions I have are:
1) Does the non-section 23 apartment make more sense given the price and the fact the rent will cover the mortgage (initially at any rate).
2) What do people think that once section 23 status is gone or if there was a "correction" in the market would the value of section 23 and non section 23 properties harmonise.
In the event of the rental market softening we are comfortable with repayments if the apartment is vacant for a while. We currently divert all childrens allowance to CU accounts for the kids (we're about to have our third) and could use this savings stream to help fund it in the event of a bubble bursting. We also have 2 maxed SSIAs.
We are looking at the apartment as a long-term investment either as a contributor to our kids education in the future or as an investment vehicle to partially fund our pensions.
Any thoughts on the questions above and the investment in general?
Thanks
We're thinking of investing in a 2 bed apartment in New Ross in Co. Wexford. This would be our only investment property. We currently live in Dublin (mortgage of €120K, house valued at €500K approx). My wife is from New Ross - we hope to sell in Dublin in the next year or two and move down and build on a site we already have. The sale of the house in Dublin would fund the build and we would clear the mortgage in Dublin as well as having some funds left over.
The apartment we are looking at costs €155K and with an interest only mortgage the repayments at current rates would be in the region of €500 pm for the first 5 years (interest only payments). Rental income from the apartment in the current market would yield €650 pm and demand is strong. This apartment does not have section 23 status. The apartment is on first floor in a two-story block of 10 - there are two such blocks in a private estate of about 90 units (3 bed semis, 4 bed semis and 4 bed dormer detached). Each apartment has it's own entrance (not just one door to the block) and has great views across the river estuary. Waterford is a 15 minute drive, Wexford town is about 25 mins. New Ross and Wexford are also on the de-centralisation list (if that ever happens).
Other apartments in the town which are located in much larger blocks (30 - 40 units) are selling for approx €225K but have Section 23 status. I realise there is tax relief to be had with section 23 but am wondering if it is worth it given this is the only investment property we will have.
I guess the questions I have are:
1) Does the non-section 23 apartment make more sense given the price and the fact the rent will cover the mortgage (initially at any rate).
2) What do people think that once section 23 status is gone or if there was a "correction" in the market would the value of section 23 and non section 23 properties harmonise.
In the event of the rental market softening we are comfortable with repayments if the apartment is vacant for a while. We currently divert all childrens allowance to CU accounts for the kids (we're about to have our third) and could use this savings stream to help fund it in the event of a bubble bursting. We also have 2 maxed SSIAs.
We are looking at the apartment as a long-term investment either as a contributor to our kids education in the future or as an investment vehicle to partially fund our pensions.
Any thoughts on the questions above and the investment in general?
Thanks