# Buy to let (cash) in Ballymun



## John1648 (6 Jul 2021)

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


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## cremeegg (6 Jul 2021)

Broadly speaking this seems a fair summary of what you would get for your money. Your question 'would you recommend going for this investment ' really is a matter of choice. 

Some observations.

A single mother on HAP is unlikely to be a problem tenant. All going well for her she will eventually get a council tenancy, thats the gold standard and she will do nothing to risk that such as not paying her rent etc. That said if the tenant does not pay their element of the rent to the council, the council will not pay you anything.

If I had €200k and it was hard earned I wouldn't be giving €1,500 to a letting agent, especially if I had a sitting tenant.


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## John1648 (6 Jul 2021)

cremeegg said:


> Broadly speaking this seems a fair summary of what you would get for your money. Your question 'would you recommend going for this investment ' really is a matter of choice.
> 
> Some observations.
> 
> ...


Thank you cremeegg! 

much appreciated !

I am new to landlording, so initially I thought to have some support in overseeing the lease. But you are right on it. On the other hand, this is deductible for tax purposes ... 

Does Ballymun sound all right ?


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## Thirsty (6 Jul 2021)

> Does Ballymun sound all right ?



I personally wouldn't pay €1450 per month to live there, but then I don't have family or other connections in the area.

Being abroad would be a bigger concern - it can be a pain sorting stuff out even when you are on hand.  Depending on how long a journey you have to return home; you might like to build in a return flight at least twice a year for an inspection.


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## moneymakeover (7 Jul 2021)

I think your plan makes sense.

By the way,
"Tax advisory services: 250 EUR"

That's the accountant? That's also tax deductible.


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## NoRegretsCoyote (7 Jul 2021)

It's a good yield, but you will get >10% for the same type of property outside Dublin, with much the same risk level.

If you are living abroad anyway it shouldn't matter much.


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## John1648 (7 Jul 2021)

moneymakeover said:


> I think your plan makes sense.
> 
> By the way,
> "Tax advisory services: 250 EUR"
> ...


Thank you, yes, that's the accountant. you are right indeed, it is deductible


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## John1648 (7 Jul 2021)

NoRegretsCoyote said:


> It's a good yield, but you will get >10% for the same type of property outside Dublin, with much the same risk level.
> 
> If you are living abroad anyway it shouldn't matter much.



Sounds good too ! On the other hand I am told that in the event of a crisis, the first rents to dive are those outside Dublin. Ballymun is not a prime location either from this perspective, however the airport is near, with a number of jobs there, also DCU is close, IKEA etc. 

Plus, I sense that with the current deficit of housing in Dublin, Ballymun will steeply improve itself.   In the Charter Building where the apartment is located, I could see a number of apartments being brought to higher standards, with an asking monthly rental price of 1600 EUR for one bedrooms (!)  

Although this maybe wishful thinking on my side - which is often "buyer's bias" - where one tend to be charmed by own arguments, tending to ignore the risks and focus on the positives.

Hence, I would appreciate your wideawake critique of idea, pointing to the blind spots, risks that I do no see etc ...


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## NoRegretsCoyote (7 Jul 2021)

John1648 said:


> the first rents to dive are those outside Dublin


So you'd accept an 8% yield over a 10% yield today because rents might fall in future? As long as it has been measured, yields outside Dublin, and on apartments, are higher.

If I wanted to build a rental portfolio in Ireland (and I very much don't!) I would pick apartments outside Dublin.


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## John1648 (7 Jul 2021)

NoRegretsCoyote said:


> So you'd accept an 8% yield over a 10% yield today because rents might fall in future? As long as it has been measured, yields outside Dublin, and on apartments, are higher.
> 
> If I wanted to build a rental portfolio in Ireland (and I very much don't!) I would pick apartments outside Dublin.



mmm, yes, you may be right...    My reasoning was to go for a sustainable rent, which would not fluctuate so much; e.g. in Tallaght, or Balbriggan, or in Ballymun itself - during the crisis times, rents went to less than half of what they are now - or landlords could plainly find no tenants for years - as many migrated outside the country ... Also in Tallaght, in crisis times, 1-bedroom apartments costed 30-40 k; now the same go for 180 k.   What a roller-coaster I must say...

Why would you abstain from building a rental portfolio in Ireland ? For the above reasons? 

I was looking at Netherlands, where I currently reside, but during COVID, basically overnight, prices overshot to a level where I was priced out.

So here I am looking back at the good old Ballymun. Some say Ballymun would take a dip , in the event of a crisis, but somehow, second after areas outside Dublin. Even now if you go to e.g. Mayo, you find rents of 300 - 400 for two-bedrooms. In a situation of salaries being only lower by 30 % than in Dublin, but with rents lower by 70%.


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## NoRegretsCoyote (7 Jul 2021)

@John1648 

If you are buying for the long term you should pay your €200k and forget about prices (and even rents) in the short term. You have no leverage so no risk of negative equity or a bank on your case.


Trying to predict future trends in rents both nationally and locally is hopeless. Is 6% a good risk-adjusted net yield right now for you? If you think yes, then go for it, and hold for a long time.




John1648 said:


> Why would you abstain from building a rental portfolio in Ireland ? For the above reasons?


In my view (over the very long run) tax-relieved pension investment provides a better return. But it depends on your circumstances and time horizon. Rental yields in Ireland are very high compared to most of Europe, and your non-resident status means you don't pay much tax.


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## John1648 (7 Jul 2021)

NoRegretsCoyote said:


> @John1648
> 
> If you are buying for the long term you should pay your €200k and forget about prices (and even rents) in the short term. You have no leverage so no risk of negative equity or a bank on your case.
> 
> ...



That is a great piece of advice ! Indeed, with no mortgage, my only risks seem to be related to tenants/non-payments/difficulties of evicting them / need for majour and costly communal repairs  - that is what I often hear... 

6% net yield would be fairly good - no other countries in the EU offer that ... Outside EU, according to globalpropertyguide, only countries like Ukraine and Moldova would offer such levels, in Europe. But there are other risks there too, investing in those countries


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## John1648 (7 Jul 2021)

P.s. - some say a significant downward correction in real estate prices in Ireland is due - so then I would need to wait for a year - to buy the same property for 125 k instead of 200k.

I personally do not see this happening anytime soon. After reading tons of info - the outlook for a couple of years more is - one way only - up! - for the prices.

There could be desperate - and doomed - attempts by say - SF, or other parties to limit / cap the prices / rents etc - but this will not work - or will screw the markets - by creating even more deficits and a black market for rentals - or driving black rents even higher. Look at Berlin e.g.


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## cremeegg (7 Jul 2021)

John1648 said:


> during the crisis times, rents went to less than half of what they are now - or landlords could plainly find no tenants for years


I dont think this is true and I was a landlord at the time, though not in Ballymun or Dublin. Rents weakened certainly and voids of a few weeks happened, but rents never rollercostered the way purchase prices did.


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## moneymakeover (7 Jul 2021)

John1648 said:


> P.s. - some say a significant downward correction in real estate prices in Ireland is due - so then I would need to wait for a year - to buy the same property for 125 k instead of 200k.
> 
> I personally do not see this happening anytime soon. After reading tons of info - the outlook for a couple of years more is - one way only - up! - for the prices.
> 
> There could be desperate - and doomed - attempts by say - SF, or other parties to limit / cap the prices / rents etc - but this will not work - or will screw the markets - by creating even more deficits and a black market for rentals - or driving black rents even higher. Look at Berlin e.g.


Low rates for the foreseeable
And plenty of credit mean house prices, here and other countries are only heading up


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## kinnjohn (7 Jul 2021)

moneymakeover said:


> Low rates for the foreseeable


who knows  Inflation is rising ,


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## noproblem (7 Jul 2021)

John1648 said:


> P.s. - some say a significant downward correction in real estate prices in Ireland is due - so then I would need to wait for a year - to buy the same property for 125 k instead of 200k.
> 
> I personally do not see this happening anytime soon. After reading tons of info - the outlook for a couple of years more is - one way only - up! - for the prices.
> 
> There could be desperate - and doomed - attempts by say - SF, or other parties to limit / cap the prices / rents etc - but this will not work - or will screw the markets - by creating even more deficits and a black market for rentals - or driving black rents even higher. Look at Berlin e.g.


I'd love to know the non payment percentage of rents to councils, and if they can't collect their rents how are you going to do it? People renting are very savvy in knowing what the house owner can and can't do and any individual thinking they can just go, buy a house/apt, then rent it out and live happily ever after is living in cuckoo land. If I had €200k in my back pocket the last thing i'd do is buy a property for rent in any part of Ireland. Don't go asking me why, just go and do it and you'll find out soon enough.

John1648;
Of course there are other costs and risks too; incl. the non-payment of the rent portion by the HAP beneficiary.

That's minor if the tenant doesn't pay the council their portion. If that happens the council do not pay you anything!! Then try getting them out, good luck with that too.


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## John1648 (7 Jul 2021)

Here is a big dilemma in fact.

If inflation, incl on real estate, goes up, inflating various bubbles, then presumably ECB will raise the reference rates. 

If this happens, then we are due a correction  in prices. Some say, even a crash.

However, even if so, this will happen after say a period of one year of 10-15 % inflation in real estate. A correction, not a crash, will take us where we are now, price wise. 

Yet - if rates go up, countries like Italy, Spain and Greece are doomed Re the servicing of their debt. In which case - another Euro debt crisis is looming. That was also the lowest point in time for Irish real estate in 2013. 

From this what can be concluded- ECB will either NEVER increase the rates. OR, it will increase them to fight inflation but will be there to bail out Italy. However, Italy is not Greece, they have a debt over 2 trillion. Will Germany pay the bill? Or will ECB pull a FED trick and drop trillions of new Euros? In such a case - inflation high again, then increasing rates, and here we ago again to lines above. Rinse and repeat ...

But hey, how will that play out for a small investor in Ballymun?!


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## John1648 (7 Jul 2021)

noproblem said:


> I'd love to know the non payment percentage of rents to councils, and if they can't collect their rents how are you going to do it? People renting are very savvy in knowing what the house owner can and can't do and any individual thinking they can just go, buy a house/apt, then rent it out and live happily ever after is living in cuckoo land. If I had €200k in my back pocket the last thing i'd do is buy a property for rent in any part of Ireland. Don't go asking me why, just go and do it and you'll find out soon enough.



I have read your postings on the other threads here -  very interesting! Certainly very useful.

I am not totally delusional, yet, I hope, on imagining a carefree bourgeois life as a small landlord in Ballymun.

However, the hard earned savings are being eaten by rampant inflation. I do not trust the stock market now, this one is certainly overvalued - much more than the Irish real estate - and due a serious correction if not crash.

So for me, it is also a way to preserve the value of the savings - and hey, why not, try to make 1 k net in rent...

If there would be other ways or other countries offering this yield, I would be willing to learn of it, and highly appreciate it


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## moneymakeover (8 Jul 2021)

So long as the central bank keeps the lending rules as they are, currently 3.5 times joint income I don't think there's danger of overheating/bubble. 
But there is possibility of loosening of lending to allow first time buyers get on the ladder.


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## John1648 (8 Jul 2021)

noproblem said:


> I'd love to know the non payment percentage of rents to councils, and if they can't collect their rents how are you going to do it? People renting are very savvy in knowing what the house owner can and can't do and any individual thinking they can just go, buy a house/apt, then rent it out and live happily ever after is living in cuckoo land. If I had €200k in my back pocket the last thing i'd do is buy a property for rent in any part of Ireland. Don't go asking me why, just go and do it and you'll find out soon enough.
> 
> John1648;
> Of course there are other costs and risks too; incl. the non-payment of the rent portion by the HAP beneficiary.
> ...



I was told that a young mother on HAP is usually a good tenant, no arrears, all in the hope of getting council housing, not risking it by playing tricks. 

Does this info I have quoted above make sense?


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## peemac (8 Jul 2021)

Poster has several very long running threads on boards with same queries and changes the locations.

Tallaght, citywest, ballymun, Balbriggan.

My guess is Enfield will be the next town.


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## letitroll (8 Jul 2021)

8% gross....6%net with no leverage attached to lever the returns......... just buy Altria, British American Tobacco stock.......8% gross quarterly paid dividend right there.....don't worry about getting the rent paid every month.........smokers always pay the nicotine rent on time........& Altria won't call you at 4am to tell you the toaster isn't working


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## moneymakeover (8 Jul 2021)

kinnjohn said:


> who knows  Inflation is rising ,


That is possible and been suggested for some time now but 10 year bond yields have been doing past week or so

Definitely seeing inflation but how/ when that will translate into higher interest rates


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## noproblem (8 Jul 2021)

John1648 said:


> I was told that a young mother on HAP is usually a good tenant, no arrears, all in the hope of getting council housing, not risking it by playing tricks.
> 
> Does this info I have quoted above make sense?


With respect, you make no sense at all. If it walks like a duck, quacks like a duck, etc etc. As for other countries offering the yield you talk about, or higher, why don't you open a deposit a/c in Turkey. They'll pay you anything from 15% to 20% per annum for your money, you'll just have to change it into Turkish Lira and you're up and running


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## John1648 (8 Jul 2021)

noproblem said:


> With respect, you make no sense at all. If it walks like a duck, quacks like a duck, etc etc. As for other countries offering the yield you talk about, or higher, why don't you open a deposit a/c in Turkey. They'll pay you anything from 15% to 20% per annum for your money, you'll just have to change it into Turkish Lira and you're up and running



of, course, all is with due respect. 

Same - here. 

I quoted somebody else and I have asked whether this makes sense. You then tell me that I do not make any sense. 

Hmmm, why this emotional charge in a discussion on cold money matters? 

Anyway, appreciate your insights, and long experience in being a landlord, from what I understand. 

However, I fail to deduce the point you are making with Turkey. Do you make the analogy between banking sector risks in Turkey - equating it with the risks of being a landlord with HAP tenants in Ballymun? Or are you strengthening my argument that 6% net rental income in a stable country like Ireland is a very good deal ?


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## John1648 (8 Jul 2021)

moneymakeover said:


> That is possible and been suggested for some time now but 10 year bond yields have been doing past week or so
> 
> Definitely seeing inflation but how/ when that will translate into higher interest rates



What FED and ECB are doing is: keeping low interest rates to make Govt debt serviceable. the rates on the bond markets are then suppressed by the QE. so it is a tandem - QE and low interest rates. As a result - the real rates go negative, as a result of inflation - and the debts remain manageable. They can kick the can for a while longer still... but not beyond a year or two - when the markets catch the game plan and start demanding higher rates - or until a black swan event happens.

Such as e.g. - Chinese navy sink a British warship in the South China sea - next month - for pulling the same trick the UK "Defender" warship did next to Crimea....

Another risk  -  foreign CBs do not buy US treasuries anymore - all is bought out by FED. If this continues for too long and too high - credibility of USD as a reserve currency will questioned, with unpredictable consequences, triggered by any even minor incident, to be followed by a debacle


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## John1648 (8 Jul 2021)

noproblem said:


> With respect, you make no sense at all. If it walks like a duck, quacks like a duck, etc etc.



I would still appreciate your view on this - "I was told that a young mother on HAP is usually a good tenant, no arrears, all in the hope of getting council housing, not risking it by playing tricks."


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## noproblem (8 Jul 2021)

John1648 said:


> I would still appreciate your view on this - "I was told that a young mother on HAP is usually a good tenant, no arrears, all in the hope of getting council housing, not risking it by playing tricks."


It would be politically incorrect of me to say what my view would be. Then again, nothing to stop you from investing in an apartment and renting out to a HAP tenant for a 6% net yield or whatever. You'll get plenty of advice on here, indeed you already have, but at the end of the day it's your money so go play with it and see how easy it is to make 6% net from it. Good luck.


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## Rasputin (8 Jul 2021)

John1648 said:


> - or until a black swan event happens.


e.g young single mother in Ballymun has house party that gets out of control and leaves thrashed rental for pastures new and unknown


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## John1648 (8 Jul 2021)

noproblem said:


> It would be politically incorrect of me to say what my view would be. Then again, nothing to stop you from investing in an apartment and renting out to a HAP tenant for a 6% net yield or whatever. You'll get plenty of advice on here, indeed you already have, but at the end of the day it's your money so go play with it and see how easy it is to make 6% net from it. Good luck.



very useful - I have read a lot in between the lines ! experience speaks ....


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## John1648 (8 Jul 2021)

Rasputin said:


> e.g young single mother in Ballymun has house party that gets out of control and leaves thrashed rental for pastures new and unknown



)) a good one, - you have made my day !


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## galway_blow_in (10 Jul 2021)

letitroll said:


> 8% gross....6%net with no leverage attached to lever the returns......... just buy Altria, British American Tobacco stock.......8% gross quarterly paid dividend right there.....don't worry about getting the rent paid every month.........smokers always pay the nicotine rent on time........& Altria won't call you at 4am to tell you the toaster isn't working



I know nothing about any of those companies but its rarely a positive sign for a company when dividend yields are at those levels ?


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## John1648 (12 Jul 2021)

*Well,  - I will crack it as it is: *

I am afraid of:

- Investing in Ballymun
- Investing in a property with a sitting tenant in Ballymun
- Investing in a property with a HAP tenant
- Being hours away in flight times, from the property
- Buying a "lemon" property, at a steep high in market prices
- Throwing *all *my current cash savings at such a property

I ended up looking at such a property due to the:

- Fear of missing out on a last train of investment property
- Fear of inflation
- being priced out of other regions / good options, due to - waiting for too long now already

Stocks are likely to fall. If they do fall, property will fall too.


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## dereko1969 (12 Jul 2021)

It might have been more useful if at the very start of your thread you had pointed out you are living abroad.


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## John1648 (12 Jul 2021)

I indeed currently reside abroad; but the plan is to eventually return to the homeland.

Have been away long, so lost a bit the touch with the Irish realities. 

Hence, would appreciate your views on the above dilemmas


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## dereko1969 (12 Jul 2021)

John1648 said:


> I indeed currently reside abroad; but the plan is to eventually return to the homeland.
> 
> Have been away long, so lost a bit the touch with the Irish realities.
> 
> Hence, would appreciate your views on the above dilemmas


You've already been advised. No one can really tell what your level of fear should be. The one thing you can be guaranteed of is that this is not the "last train of investment property".


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## SPC100 (12 Jul 2021)

How much of your net worth will that 200k represent?
How long would it take you to save another 200k?
How much if any do you have invested in stocks?
How much if any do you have invested in pension?
Would you be willing to live there yourself if push came to shove?
How many more years do you think you will be earning income from your job?

Or maybe do a money makeover thread.

I think those sort of questions could help people reason about how wise it is.

If this is your last and only 200k that it might be too risky...

But from your posts you have your eyes fairly wide open as far as I can tell


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## John1648 (13 Jul 2021)

SPC100 said:


> How much of your net worth will that 200k represent?
> How long would it take you to save another 200k?
> How much if any do you have invested in stocks?
> How much if any do you have invested in pension?
> ...



Thank you SPC100 !

Very useful and rational checklist !

The 200k is 95% of cash / of the most liquid assets I have. I also own a fully paid small apartment in Spain.
It would take me 6-7 years to save another 200 k
I have zero stocks
I have some pension investments, but not much; basically I have already gained the right to a small pension with the UN (the more years you work, the higher it will go, eventually)
If push came to shove - in a tough scenario, I could leave there, in Ballymun myself. Of course, in case if you can evict the tenant. Is a single mother on HAP with a child at all evictable ? Not planning to do it, but just to know.


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## Thirsty (13 Jul 2021)

Posts here seem to be rather fixated on the status of the tenant.

To answer your question re eviction, neither the marital or child status of the tenant is relevant. 

If you wish to regain your apartment, you must follow the requirements of the legislation.  It's detailed on the PRTB website.

If you want to purchase property for rental, you might do better to buy two units in a smaller city (e.g. Limerick) and somewhat spread your risk, insofar as you are less likely to have voids in both properties at the same time.


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## SPC100 (13 Jul 2021)

Based on your numbers I don't think this investment will break you if it turns out bad. It will just meet less money in the future. I think you would be overweight in property. But if you don't have a ppr I guess that is fine overall.

What is value and income from apartment you own?

I'd lean towards investing and immediately committing your 30k saving potential p.a. into stocks regardless of stock market price. (Well after emergency fund built back up).

Is pension db? Can you buy extra entitlements?


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## John1648 (1 Aug 2021)

The other apartment I own is pretty small, is in Tenerife (45 sq m., now worth approx 100 k, and is fully paid). It is meant as a refuge on the sunny side at the (early) retirement moment.  

The other apartment, in Dublin, is supposed to offer a steady additional income of approx. 1000 EUR a month, on top of the small pension income. 

So the stakes for me of choosing the right apartment are high.

Instead of Dublin, - places such as Ballymun or Clondalkin, I am also looking at possibly Nice, or Cannes in South France, a smallish apartment to be rented out via airbnb, to get the same 1000 net per month, on average.


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## John1648 (1 Aug 2021)

Being mindful of all the potential difficulties in Ballymun, I am now closely looking into buying instead in Clondalkin, a slighly better area, less drug addicts for sure. It is a one bedroom apartment,  or 45 sq. m, in Rosebank view estate, price negotiated at 194 000 EUR. Somewhat overpriced, but so seems the market these months. The monthly rent would stand at 1300 EUR. 

Is Rosebank view, Clondalkin, better? Would such an investment make sense?

Clondalkin is also notorious for antisocial behaviour... 

So I am thinking of - location, location, location rule ...


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