D
dm101
Guest
Hi, Im new to this forum and would greatly appreciate some advice on investing in dublin.
My job is in the west of ireland and so im renting there (very reasonable at 200 euro/month) and have my principle private residence in dublin which is valued at 1 million euro and I have it rented for 40k euro per year. I currently owe 500k on it which i have on interest-only at 3.1% costing me approx 15k euro per yr thereby giving a surplus of 25k euro per/yr.
I have released equity of 160k from my 2 investment properties (both of which are maxed out at 80% loan to value and have been fully let for the past few yrs). Im looking at increasing my 500k mortgage to 700k and putting this 200k with the 160k would give me a total of 360k to reinvest in dublin 4/6/8.
This would allow me to buy a property for 1.25 million (possibly 4/5 bed semi with extension). I can borrow 1 million euros (80% of the value) and put in 250k (20% deposit) plus approx 110k in stamp duty. My projected rental return on this new property is approx 25k per yr (a poor 2% rental yield). I plan to get a 5 yr fixed rate of 3.8% interest-only loan on 1.7 million it would cost approx 65k per year which would be serviced by the rental income of 40k + 25k. I would hope to achieve at least 6-8% yearly capital increase. Obviously there are extras (insurance, maintenance, void periods etc) which have also to be accounted for.
I accept that the figures Im investing are high and there is certainly a moderate amount of risk involved but the more cast-iron rental areas of dublin should be the last to feel it if there is a property crash...
I reckon that this strategy of buying one large residential property in a good area is more manageable than buying several units across ireland and europe...
Is this strategy too risky with the current over-priced dublin market or is it better to hold the cash and look for alternative investments. Would appreciate any feedback...
My job is in the west of ireland and so im renting there (very reasonable at 200 euro/month) and have my principle private residence in dublin which is valued at 1 million euro and I have it rented for 40k euro per year. I currently owe 500k on it which i have on interest-only at 3.1% costing me approx 15k euro per yr thereby giving a surplus of 25k euro per/yr.
I have released equity of 160k from my 2 investment properties (both of which are maxed out at 80% loan to value and have been fully let for the past few yrs). Im looking at increasing my 500k mortgage to 700k and putting this 200k with the 160k would give me a total of 360k to reinvest in dublin 4/6/8.
This would allow me to buy a property for 1.25 million (possibly 4/5 bed semi with extension). I can borrow 1 million euros (80% of the value) and put in 250k (20% deposit) plus approx 110k in stamp duty. My projected rental return on this new property is approx 25k per yr (a poor 2% rental yield). I plan to get a 5 yr fixed rate of 3.8% interest-only loan on 1.7 million it would cost approx 65k per year which would be serviced by the rental income of 40k + 25k. I would hope to achieve at least 6-8% yearly capital increase. Obviously there are extras (insurance, maintenance, void periods etc) which have also to be accounted for.
I accept that the figures Im investing are high and there is certainly a moderate amount of risk involved but the more cast-iron rental areas of dublin should be the last to feel it if there is a property crash...
I reckon that this strategy of buying one large residential property in a good area is more manageable than buying several units across ireland and europe...
Is this strategy too risky with the current over-priced dublin market or is it better to hold the cash and look for alternative investments. Would appreciate any feedback...