okay in this video I want to take a look at buy to let property investment in
Ireland
the landscape here has changed significantly in the last 10 or 15 years
10 years ago 15 years ago the Irish property market and the Irish lending
market went bananas with the result that people were buying buy-to-let properties
residential in the main apartments for buy to let purposes and most people were
doing it on the basis that were trying to create some sort of a pension for
themselves not a lot of people at the time had pensions and not sure what the
current situation is generation the pensions but most people would have seen
property it's a safe space as a nest egg for the future as a hedge against
inflation and there's a nice way to acquire capital and keep a few Bob
together and so on so back then 10-15 years ago it was easy enough to get
financed for buy to lets and you had ordinary people in ordinary jobs
building up these property portfolios portfolios of apartments or three beds
semis or whatever in the bite solid markers then the whole thing came
crashing down around about 2009 2010 and clearly the banking landscape the
financial landscape has changed significantly the lending requirements
and the lending guidelines and so forth have changed dramatically as well it's
not as easy to get money and it is far more restrictive in terms of credit
being advanced by the finance houses but in any event there's still a buy to let
market it's still quite a good investment depending on your
circumstances depending on your capital depending on what you're looking for but
there's a couple of things that you will need to know so the situation as I see
it in 2019 is you get a loan for between five and thirty years and you get a loan
to value value advance of between 50 and 70 percent depending on the borrower and
depending on the lending institution this used to be the case or used to be a
hundred percent 95 percent whatever and the great thing about
property situation back in the day and which clearly was a factor in the
downfall was that you could buy a property putting down 5% or 10% of the
most and this allowed people to leverage whatever few bob they had and before
you knew it with her rising market and property number one rising value
soon people were refinancing remortgaging buying property number two
and the whole thing created a sort of a ratchet effect with the result two
people became massively over extenders that landscape has changed situation has
changed now in relation to finance and as I say 50 to 70 percent is what you're
looking at in terms of loan to value and it will depend on where the property is
have seen one Bank for example Ulster Bank where I think they will advance up
to seventy percent in the four major cities in Ireland Dublin Galway Limerick
and Cork but they will only advance 50 percent outside of those four cities so
that's something that you need to consider another thing you need to
consider is the taxation situation you're gonna have rental income you are
liable for that it's case five income you're also gonna have write-off Stowe
against the cost of buying the property and maintaining it and so on you're
going to have a write-off in terms of the interest that you're paying the bank
and various payments management company fees repairs and maintenance and so on
and so forth so consider the taxation situation as well and get accounting
advice advice from an accountant who understands the situation
another factor you need to consider is the bank's legal costs you're buying an
ordinary house to live in it's a residential purchase it's for
your sole occupation it's not a residential or it's not a commercial
property it's not a buy to let you only have to pay your own legal fees however
in a commercial purchase and investment buy to let unless you will be expected to pay
the bank's legal costs as well because the bank will appoint a solicitor to act
on their behalf and to ensure that the property is the their mortgage is
secured on the property and it's registered
with the property registration authority and so on so they appointed their own
solicitor so you want to have the solicitor appointed by the bank you have
to pay their fees you're gonna have the solicitor appointed by you you're gonna
have to pay his or her fees as well so you're gonna have two sets of legal fees
again shop around some of the banks give subsidy or an incentive or
promotion where they pay a certain percentage or a certain sum of legal
fees so shop around have a look at that the other situation you may be looking
at would be an interest-only situation where you pay interest only for a number
of years that is a possibility but it's not that common generally the more
prudent financial and fiscal atmosphere that prevails in Ireland since
the crash means that you would be expected to pay back principal and
interest but as to say shop around you will get lenders who will give interest
only but you need to be very very careful because it's a little bit like
you know taking cocaine or something getting interest only if the property
market Falls at all and you're only paying interest no you're gonna be
possibly in negative equity after three four five years of just paying interest
and you may be facing a difficulty then so that's something to consider
by-and-by our overall then in essence the property market in Ireland is strong
enough certainly the rental market is very strong there's a huge demand
another thing you need to factor in is the whole question of the political and
therefore nearly legal climate arising from the question of homelessness and
the difficulty with people getting accommodation so on the pendulum in
terms of landlords rights versus tenants rights appears have swung quite
significantly towards tenants in the last number of years and there's quite a
lot of safeguards in the legal system now for tenants the Residential
Tenancies board is a body that you're going to have to tangle with sooner or
later and you do have to register your property with that body but the
difficulty of tenants not performing in accordance
with the letting agreement or damaged your property or getting tenants out who
are not paying and so on these are difficult enough legal issues difficult
enough problems because as I say the pendulum has swung towards tenants to a
great extent it's difficult to get a tenancy but when you do get it you're
in the strong enough position from a legal perspective and the landlord can
only evict the tenant in very limited circumstances so you need to factor that
into your your decision to invest in a buy to let in Ireland it may well work
out fine if it might prove to be a good investment it's entirely a matter for
yourself I'm not giving you financial advice I'm simply pointing out the pros
and cons the huge thing of course what property is that generally you can
leverage a relatively small amount of money by way of a mortgage into a bigger
investment whereas if you're buying shares for example you are generally
unless you're looking at contracts for difference which is very very risky
you're generally looking at having to pay cash or pay at least for your shares
so you don't have the same opportunity for leverage with shares and you do have
a better opportunity for leveraging a relatively small amount of an issue seed
capital to build up some sort of a folio some sort of a property folio you do
need to factor in as well and on the factor is the question of maintenance
and management of your property it is not a set and forget sort of the
situation you may be lucky you may get a very very good tenant at
the outset but you need to factor into your considerations the fact that you
will get an average tenant or indeed sometimes unfortunately a tenant from
hell and that can make things very very difficult I could tell you some really
appalling stories of tenants I've had down through the years you know tenants
being arrested taken off and animals for example dogs being left in the apartment
for days and I land down then to pick up the rent and not only is the tenant
gone but now there's a dog after chewing the leg off a table or something you
know it's appalling situation but that has happened I've seen apartments
broken into or not broken into or doors broken down apartments belonging to me
where the searches lawful search is carried out by an Garda Siochana and
again all of these things come back to the landlord he must pick up the tab and
and sort things out so that's a story hope you find this video useful if you did
give it a thumbs up down below and you may be interested in subscribing to my
youtube channel thank you for supporting the channel and the shares and the likes
and the comments and so forth