Dear Forum members,
Here comes a kind request to review and critique my below investment idea:
I have managed to save ~ 200 k EUR, and plan to invest them in a rental property in Dublin. I have been procrastinating for too long, and as a result was priced out of many areas in Dublin city.
Currently, I have negotiated a price of 200 000 EUR for a 2-bedroom apartment in the Charter building in Ballymun (close to Charter Cross); it is in a decent condition, 76 sq.m, 3rd floor.
It has a tenant in situ - a young single mother on HAP. The rent paid is 1450 EUR.
Would such an investment make sense to you? I know, being a landlord can be a hassle, but: i) prices are going up; ii) inflation is eating up my hardly earned savings; iii) the rental yield seems to be decent - 8% gross, 6% net.
Here come my calculations:
1. Yearly gross rent: 17400 EUR (12 * 1450).
2. Tax deductible spending: 3190 EUR ; i.e. 1800 (management fee); 1050 (letting fee); insurance (250); RTB fee (90)
3. Rental income tax at 20% rate: 1192 EUR ; i.e. 14210 EUR * 20% = 2842 EUR; minus the tax credit of 1650 EUR (with no other income currently)
4. Local property tax: 250 EUR
5. USC: 170 EUR
6. PRSI: 0 (as I currently reside abroad).
7. Tax advisory services: 250 EUR
7. Net yearly rental income: 12 348 EUR
Of course there are other costs and risks too; incl. the non-payment of the rent portion by the HAP beneficiary, difficulties of eventual eviction etc.
Would you recommend going for this investment?
Many thanks,
John
Here comes a kind request to review and critique my below investment idea:
I have managed to save ~ 200 k EUR, and plan to invest them in a rental property in Dublin. I have been procrastinating for too long, and as a result was priced out of many areas in Dublin city.
Currently, I have negotiated a price of 200 000 EUR for a 2-bedroom apartment in the Charter building in Ballymun (close to Charter Cross); it is in a decent condition, 76 sq.m, 3rd floor.
It has a tenant in situ - a young single mother on HAP. The rent paid is 1450 EUR.
Would such an investment make sense to you? I know, being a landlord can be a hassle, but: i) prices are going up; ii) inflation is eating up my hardly earned savings; iii) the rental yield seems to be decent - 8% gross, 6% net.
Here come my calculations:
1. Yearly gross rent: 17400 EUR (12 * 1450).
2. Tax deductible spending: 3190 EUR ; i.e. 1800 (management fee); 1050 (letting fee); insurance (250); RTB fee (90)
3. Rental income tax at 20% rate: 1192 EUR ; i.e. 14210 EUR * 20% = 2842 EUR; minus the tax credit of 1650 EUR (with no other income currently)
4. Local property tax: 250 EUR
5. USC: 170 EUR
6. PRSI: 0 (as I currently reside abroad).
7. Tax advisory services: 250 EUR
7. Net yearly rental income: 12 348 EUR
Of course there are other costs and risks too; incl. the non-payment of the rent portion by the HAP beneficiary, difficulties of eventual eviction etc.
Would you recommend going for this investment?
Many thanks,
John
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