Should I buy an investment property.

T

Teddy2627

New Member
Messages
4
Hi, long time lurker first time poster here.

I'm looking for advise about purchasing an apartment to rent out.

I'm 44 year old single female on 50k gross per year.
Have old First Active Offset mortgage with Ulster Bank, 94k left in mortgage with 20 years left on the mortgage. Mortgage repayments is approx 500 a month after 2 recent interest rates increases.
Have 70k in savings willing to use 40k for deposit on new property. Want to keep 20k in savings (Part to pay the expenses for getting a new mortgage) and the remaining 10k will be used to do up house in near future.
2 bed apartments around my area going for 105k - 120k with great prospect for renting it out long term.
I see Permanent TSB willing to give 70% LTV for buy to let mortgages.

Should I invest in one or what else do you think I should use the 40k on.

Currently paying max into pension each month with the employer also paying.
 
Teddy2627 said:
Currently paying max into pension each month with the employer also paying.
Click to expand...
What do you mean by "max" here?
Maximum age related tax relief amount?

When considering such a large investment it's probably better to do a Money Makeover post so that all relevant aspects of your overall personal/financial situation can be taken into account.
 
Teddy2627 said:
Hi, long time lurker first time poster here.

I'm looking for advise about purchasing an apartment to rent out.

I'm 44 year old single female on 50k gross per year.
Have old First Active Offset mortgage with Ulster Bank, 94k left in mortgage with 20 years left on the mortgage. Mortgage repayments is approx 500 a month after 2 recent interest rates increases.
Have 70k in savings willing to use 40k for deposit on new property. Want to keep 20k in savings (Part to pay the expenses for getting a new mortgage) and the remaining 10k will be used to do up house in near future.
2 bed apartments around my area going for 105k - 120k with great prospect for renting it out long term.
I see Permanent TSB willing to give 70% LTV for buy to let mortgages.

Should I invest in one or what else do you think I should use the 40k on.

Currently paying max into pension each month with the employer also paying.
Click to expand...
Are you strong enough mentally to be a landlord? Despite how it looks from the outside you need to be a strong person to be a landlord.
 
Teddy2627 said:
Have old First Active Offset mortgage with Ulster Bank, 94k left in mortgage with 20 years left on the mortgage.
Click to expand...

1) What is the rate? I assume it's a tracker.
2) How exactly does it work? Is the €70k in an account which is offset against the mortgage? So your net mortgage is actually €24k?
 
Brendan Burgess said:
1) What is the rate? I assume it's a tracker.
2) How exactly does it work? Is the €70k in an account which is offset against the mortgage? So your net mortgage is actually €24k?
Click to expand...
My current rate is 1.65% offset means that the money in my current & savings account is off set against my mortgage to calculate interest payable
Brendan Burgess said:
I assume you mean that you are contributing €12,500 a year into your fund?

Brendan
Click to expand...
I shouldn't have used the word "max" here, what I meant was with my employer if 1 pay 10% they pay 12% and I'm paying the 10% each month
 
Is that ECB of .5% plus a margin of 1.15%?

You are doing well to have your mortgage down to €24k at age 44.

You could buy an apartment for €120k with €70k savings.

This would leave you with a mortgage on your home of €94k
And a mortgage on the investment of €50k.

That is close to three times your salary. Further increases in interest rates or a tenant who chooses not to pay and your financial stability and enjoyment of life would be ruined. It's just not worth the risk.

1) You can contribute up to 25% of your salary and you should do so. This is simply the best long-term, tax-free investment.

2) As it's an offset mortgage, leave it as is - no need to pay it off as such. The flexibility of an offset is great.

Brendan
 
Teddy2627 said:
Hi, long time lurker first time poster here.

I'm looking for advise about purchasing an apartment to rent out.

I'm 44 year old single female on 50k gross per year.
Have old First Active Offset mortgage with Ulster Bank, 94k left in mortgage with 20 years left on the mortgage. Mortgage repayments is approx 500 a month after 2 recent interest rates increases.
Have 70k in savings willing to use 40k for deposit on new property. Want to keep 20k in savings (Part to pay the expenses for getting a new mortgage) and the remaining 10k will be used to do up house in near future.
2 bed apartments around my area going for 105k - 120k with great prospect for renting it out long term.
I see Permanent TSB willing to give 70% LTV for buy to let mortgages.

Should I invest in one or what else do you think I should use the 40k on.

Currently paying max into pension each month with the employer also paying.
Click to expand...
You in all fairness have completed a lot of the heavy lifting.
You could go ahead and take on a BTL but post after post on AAM have addressed the huge risks involved.
Congrats on your comfortable current position. Dont get involved in a BTL.
Pay off your mortgage.
 
You must log in or register to reply here.
Back
Top