# Non resident buying an investment property



## lou (26 Dec 2004)

Hi everyone
Have been tuning in to this forum for a while, and so decided to avail of all the knowledge that you all seem to have. My query is this:
I'm an Irish citizen , but have been living abroad for the past 15 years.  I don't intend to stay indefinitely where I am now, so have been looking into getting a property for when I move back - in 5 to 8 years time.  As the prices have just gone crazy the last number of years, I'm interested in not leaving it much longer.  So : firstly, does anyone know about tax laws governing non-residential landlords.  Same as for those living in the country?  Anything special  I need to consider when borrowing from the bank in Ireland?  How do investment mortgages differ from regular ones?   To be honest, I don't know where to start, as I keep finding bits and pieces of information, but none that pertain to my particular situation.  Any advice  or informationof any kind would be appreciated.  Many thanks.


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## ClubMan (26 Dec 2004)

*So : firstly, does anyone know about tax laws governing non-residential landlords. Same as for those living in the country?*

The  covers some of the issues relevant here and mentions the _Revenue Guide to Rental Income_ booklet which touches on some of the issues relevant to non-resident landlords. You might also want to check in your country of residence in case you may also be liable for local taxes possible with credits allowed for any _Irish_ witholding taxes under the relevant double taxation agreement if applicable.

*Anything special I need to consider when borrowing from the bank in Ireland? How do investment mortgages differ from regular ones?*

Investment property mortgages often charge slightly higher interest rates than owner occupier mortgages. See the best buys for some sample rates and how they compare to owner occupier rates. I'm not sure that you are necessarily tied to borrowing from an _Irish_ financial institution for such a purchase. Some people recommend using  in order to maximise the amount of interest that can be offset against rental income.

*To be honest, I don't know where to start, as I keep finding bits and pieces of information, but none that pertain to my particular situation. Any advice or informationof any kind would be appreciated. Many thanks. *

If you are not clear on what's involved then you should make sure to apprise yourself of all of the facts beforehand, do some number crunching to ensure that the investment is a viable one and better than any other alternatives that might be potentially suitable to your personal circumstances and perhaps consider getting some  on the matter - possibly from somebody with knowledge of both tax juristictions involved.


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## lou (27 Dec 2004)

Clubman
Thanks for the reply.  I am awaiting a consultation with an Irish financial adviser, but wanted to arm myself with questions I hadn't thought of, as unfortunately most of our interaction will be via e-mails and phone calls.
I'm not running into this thing lightly, as I've been thinking about it for the past 3 years, and feel that I'm at the point where I can go ahead with it financially.  I'm not looking at it as a money-making scheme, but rather as my retirement security, and place to live in the next few years.  I've invested in the stock market the past few years, and have seen my managed fund account bleed money, so property seems the answer to my situation.  I've checked out your suggested sights already, but will review them.
Thanks again for taking the time.


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## ClubMan (27 Dec 2004)

*I'm not looking at it as a money-making scheme, but rather as my retirement security, and place to live in the next few years. I've invested in the stock market the past few years, and have seen my managed fund account bleed money, so property seems the answer to my situation.*

Bear in mind that past performance (of both the stock and property markets) is no guide to future returns and property is not necessarily a safer investment bet than equities even if, with the benefit of hindsight, it may have been over recent years.


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## lou (27 Dec 2004)

*non resident buying investment property*

Thanks again Clubman.
Will bear all your info. in mind. Thanks.


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## Marie (27 Dec 2004)

*non resident buying investment property*

Lou - Recently I went through a similar process and am happy to share my experience.  I recently inherited a half-share in my mother's Dublin house when she died, together with my sister who has lived abroad all her life.  My plan was to get a 50% mortgage with an Irish bank and rent out the property until I retired to Dublin (3 years time).

In this case because it was an inheritance, I was buying directly from a sibling, and the property was under the limit for stamp duty my ambition was to simply cover the mortgage repayments.  Like yourself I was not seeking a profit.  Most people warned that the property market in Dublin was "overheated" and prices would fall but this did not concern me unduly as I wanted the house solely for the garden, which is a passion.  I set a very low rent and floated a "tester" ad on daft.ie.

First thing I discovered on assessing potential tenants is that Dublin is very much a "renter's market" and _they_ quote _their_ terms despite the very low rent I was setting.  Half were foreign nationals e-mailing/telephoning me from their country of origin asking if they could have the house "now".  As they did not have Irish bank accounts or jobs/promises of jobs I felt these tenancies would be problematic as they hadn't even reached the starting-line.  The three prospective couples who came to view had very high expectations and upfront about things they wanted in place.  I spent a great deal of time and energy compiling a list of tradesmen to complete the necessary renovation work before the property could be let and encountered a second big obstacle to running an investment property in Dublin - tradesmen are so busy, so well-remunerated and in such short supply it was going to take months to have the house in rent-able condition.  The large garden actually became a liability as none of my prospects were willing/able to maintain it neatly so I would have to have gardeners for the next 3 years (and in Dublin this is expensive).

Next to agencies. Be alert that in Ireland agencies offer three separate services _each_ of which is charged......obtaining/vetting tenants, property management, trouble-shooting.  As the cost of having the full service is (by UK rates) very expensive, the alternative would have been emergency trips to Dublin whenever a w.c. got blocked or the burglar-alarm malfunctioned and then hope the particular tradesman/technician could be persuaded at emergency rates to do the sorting or repair.  As a non-resident landlord you must  appoint a rent collector in Ireland even if you do not work through an agency.

Thirdly after 30 years in the UK and experience of purchasing a home here I found the process in Ireland to be far less transparent with information difficult to get hold of and I got to the end of a year of effortful long-distance dealings with banks, agents, solicitors, bureaucracy tradesmen etc. completely exhausted and with no sense I was in control of the process or ever would be.

Last but not least when I "did my sums" and deducted the proportion of rent payable to Revenue, accountant's and solicitor's fees, agency, repairs, and mortgage interest.......together with the huge personal commitment l the record keeping entails, plus the stress.

If you have a strong supportive friendship and family network in Ireland being a long-distance landlord/lady is feasible.  In the end I decided to sell as it makes more sense to put the proceeds into my UK bank which currently pays 5% interest.  If I do finally decide to sell up here and return to Ireland I will return as a cash buyer.  If prices continue to rise in Dublin........well, the world is a big big place!


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## lou (22 Jan 2005)

*overseas landlord*

Marie
Apologies for not replying to your mail, but things Very hectic over the past few weeks.
Read your mail with much interest, and it basically highlighted all the hassle that I presumed lay before me, but hoped would not!
Will keep all in mind, Marie.  
Many thanks.    Lou


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## Marie (22 Jan 2005)

*overseas landlord*

Sorry to be the bearer of bad tidings Lou!  This wasn't my experience alone.  A nurse colleague and her partner bought a plot in Ireland about three years ago with intention of retiring to their new self-build.  The plan was for them to buy a mobile home and travel through Europe and the Balkans for a year during the build.

HOWEVER they had to face up to the fact that unless they were there personally the process was extremely slow.  They abandoned their projected trip and the last I heard the building work is now more realistic.  

I thought mobile phones and e-mail would make being a long-distance landwoman/person more viable but face-to-face contact is needed.

Anyway - all the best whatever you decide and it would be nice to hear your experience.


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