Buy a house to rent out for just a year?

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My wife and I currently live on the northside of Dublin (renting) with our two children. Our eldest is 4 1/2 and due to start school in a local school in September. We would like to buy a house but are finding it hard to find something suitable near where we live as there are very few suitable houses on the market.

We found a very nice house on the southside (and we would like to move to the southside), but we don't have a school place lined up there. We could buy the house and put our child down for some local schools near the new house, but
a) we don't know which school we might get (it might be one we don't like, e.g. we would prefer non-religious)
b) we don't know if we would get a school place at all (as she is only 4 1/2 - if she was 5 1/2 I believe she would HAVE to be taken by a school somewhere in the general area)

b) is a worry as we definitely want her to start school this September, as she is quite bright and we feel she is very much ready.

One idea is to buy the house on the southside, but rent it out for a year, and continue renting ourselves on the northside and our child would start school on the northside, and then move in next summer and transfer our child to some local school near the house for the start of Senior Infants. In theory we could use the rent we take in there to pay our current rent on the northside, which would be similar. But we would only get some tax relief on the rent we take in (75% of the interest portion of the mortgage repayments only), and we pay tax at the top rate, so we would be paying tax of maybe 30-40% of the rent we take in. That said, if property prices rose say 7% between now and this time next year, we would still probably be ahead financially compared to staying renting as we are. But of course we don't know what will happen with property prices.

Our current mortgage approval is for a house for us to live in, so we would need to seek approval for a buy-to-let I guess.

Any other obvious flaws in this plan? Does it make any sense financially or otherwise?

Of course, there will be the hassle of renting out the house, finding tenants, furnishing the house, etc.

One danger is that we end up really liking the school here and our child makes lots of friends, etc. and in a year's time we don't want to move any more!
 
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from the school side of things my daughter is just finished her first year of junior infants, it takes them about 6 months to settle in and get used to the school. my daughter had been in crèche since 6mths so being away from us wasn't an issue but primary school is a massive difference to crèche, it would be a lot on her to move schools after one year. my daughter was a feb baby so only 4 1/2 going to school also.
you will most likely have missed enrolment for school for Sep 2016 in most southside schools and but it might be worth calling a few. do you know what area southside you want to buy in?
 

Thanks for the reply.

I have called a few of our preferred schools in the area (Educate Together and others) and they have significant waiting lists for Sept. One might get a last minute offer closer to the time, but there's no guarantee. Also no guarantee of getting a transfer into Senior Infants next year either.

But I suppose what I'm looking for here are any financial "gotchas" (apart from the tax hit, or property prices falling) with the above plan? Or any better alternative suggestions?
 
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There is a considerable risk that the tenant won't leave after the year.
If the tenant dug their heels in,it could be a further 15 months before you get possession.
 
vandriver said:
There is a considerable risk that the tenant won't leave after the year.
If the tenant dug their heels in,it could be a further 15 months before you get possession.
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Okay, why 15 months? Would appreciate any pointers on this.
 

I think getting a school place on the southside even in senior infants is going to be our big problem.

A lot of Educate Togethers would be hugely oversubscribed with children whose name s were put down the day they were born not getting places because they were born too late in the year.
 
Clara16 said:
you will most likely have missed enrolment for school for Sep 2016 in most southside schools and but it might be worth calling a few. do you know what area southside you want to buy in?
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I would say you have absolutely missed the enrolment for school on the south side for September 2016.

I am not sure what Educate Together you contacted, but when I contacted my local one (Monkstown) about two years ago for entry next year I was basically told not a chance as the waiting list was so long.

Depending on where the house is, there may be a few schools which tend to have places available. I contacted all around me to see what the story was with them.

Another option is to move your child to a 'proper' Montessori as opposed to the creche. This can act as a nice bridge between creche and primary school. This is what we are doing with our daughter next year who will also be 4.5. The creche have advised us she is ready to go to school, but we feel she will be too young - socially not academically.

I think it might be difficult to socially put a child into senior infants as most others will all know each other at that stage. The child will still only be 5.5 at that stage.

In terms of your general plan, I guess there are two issues
1. whether you will want to move after the year. A year is a long time for someone with a young family, and will be very hard to settle during the year knowing you are moving. This will be in the back of your mind all the time.
2. whether you will have issues getting your tenants out after that period of time. One option here could be rent to students, so they vacate in June and allows you the summer to settle in before school term starts. But I am guessing this would mean you have closed the sale and are ready to rent by start of September which is not that far away in reality.

Also, every time you have an issue with the tenant, you will curse the decision.
 
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