Residential Investors

 

Buyers Broker Ltd. offers a comprehensive agency service to investors looking towards investing in residential property within Ireland. By understanding and responding to your property needs, we will ensure that you get the maximum return from your investment.

Residential investment property is a highly tax-efficient and low risk method investing for the future. While 2008 and 2009 (so far) have proved disastrous beyond all economic forecasts, the right property in a well thought-out location is still the most likely means to provide substantial returns for investors, with the still likely added bonus of capital growth. Investors in residential property should, however, be prepared to take a long-term view at the investment and have the resources to deal with any periodic slump in the market.

What can Buyers Broker Ltd. do for you?

Buyers Broker Ltd. is thoroughly familiar with the residential investment market and has a strong working knowledge in terms of house prices, rental income and potential capital appreciation. Based on your instructions, requirements and budget, our team will source the right investment property for you in the right location. We will advise on strategic locations based on your budget and the type of tenant you wish to attract. Generally, students and professionals will have different expectations of a rental property. In terms of location, it is important to consider whether the area will sustain a growth in property values and whether it would be easy to sell this property in the long term. Residential investment properties may be either houses or apartments and while apartments are generally smaller and easier to maintain, there is very often an obligation to pay a maintenance charge to a management company. Houses in a suitable location will generally be larger than apartments and therefore will command a greater rent. They do, however, require a greater level of maintenance.

Once we have sourced your ideal property, our experienced staff will negotiate with the seller/seller’s agent on your behalf to broker the best deal for you, which means the best possible price and favourable conditions. ALL properties sourced are well below market value so that investors acquire an attractive level of equity with their new purchase.

Buyers Broker property professionals also represent clients at auctions and we have a network of agents to ensure attendance nationwide.

The main benefits of investing in residential property are as follows:

1. Regular rental income to cover the mortgage, in full or for the most part.

2. The security of investing in a real asset in the form of property.

3. Likely capital appreciation, yes, even now!

4. Interest rates, while increasing slightly, are currently at a historically low level.

5. Tax advantages under a variety of tax relief schemes, where applicable.

Noteworthy drawbacks to be aware of:

1. If you need to free up capital, it may take several months or more to sell the property.

2. Additional costs involved for example, Legal fees, auctioneer fees, engineer/surveyor fees, fit-out costs; maintenance, repairs, insurance and letting costs if engaging a property management company (link to information section on this).

3. Periodic times, between different tenants, when the property may be vacant.

4. Probable increases in mortgage repayments in the event of a rise in interest rates.

5. Market trends may result in decreased rent values, 2008/9 proved quite an eye-opener for all property investors.

Costs involved:

1. Stamp Duty - There is no stamp duty on residential investment property below €125,000. For current stamp duty rates click here.

2. Legal Costs - Legal fees usually cost about 1% of the purchase price plus VAT, and outlay however Buyers Broker Ltd will source the most competitive legal packages on the market and present you with a number of options.

3. Tax - As an investor you must pay tax on your rental income, however this may be reduced by qualifying mortgage interest payments i.e. interest on borrowed money used in the purchase, improvement or repair of a residential property. It is important to note that pre-letting expenses are not allowable tax deductions. Capital allowances may be allowed on items you buy to furnish the property and are deducted from your income for tax purposes.

4. Capital Gains Tax - When you go to sell your property you will be charged CGT on the capital profit from the sale of the property at a rate of 22% - 25%.

5. Insurance costs - The building will need to be insured to cover rebuilding costs to satisfy most lenders requirements.

6. Residential landlords will see the amount of tax relief allowable against mortgage interest reduced from 100% to 75%. This new measure will apply to new and existing residential (not commercial) mortgages from May 1.

Click here for our guide to the Private Residential Tenancies Board (PRTB).