Buy to let/Let to buy/moving to Ireland/arrrgh!

justin138

My wife & I are intending to mortgage our home here in England (we've no mortgage on it at the moment), and use the mortgage money to buy a place in Ireland to live. We hope to rent the English house out to pay the mortgage, and maybe even have a little bit of rent left over (to pay the mortgage off early perhaps).

a) does this seem feasible
b) do we need to be aware of any pitfalls
c) will we be able to mortgage for this reason?
d) any idea which mortgage co. would be best?

Any help would be gratefully received, as we're desperate to move this year.
Justin

Ian_W

Hi justin,
I would think it's feasible if your property meets some citeria and you do some research on letting income you're likely to acheive in your area. You'll need a BTL mortgage which will usually be about 85% max loan to value of your property, normally they require that income you generate will cover around 130% of your mortgage repayments. If you can do both of these then it's certainly a possibility.

Be mindful though that as well as your mortgage you're going to have to pay a letting agent [being overseas makes managing it yourself very difficult] and fund buildings insurance and any repairs, maintenance that needs doing. You should also budget for voids [empty months] - so, all in all, you should be looking for a realistic rental to be about 150% of your mortgage payments for you to make a profit.

Lots of areas are over supplied with rental props due to the BTL boom so rents are keen, research where you live to see whether that's the case or not. You do have the option of selling up here to fund your move if the BTL figures don't stack up too good.

If you go to the mortgage section of the site and use the links to moneyfacts moneynet etc you can find "best buy" pages for BTL mortgages. TBH in your circs I would use a whole of market, no fees broker to source the best deal that fits your circs.

HTH & BoL.

justin138

Many thanks for your reply Ian. To put you in a better picture, we've a 2 bed victorian semi in a village, worth about £160-170,000 (not sure who does valuations for mortgage purposes though), we got this info from looking at similar houses sold recently. We're looking to rent out at approx. £500 per month (again, local prices found on-line). We'd gear our buying price in Ireland to whatever mortgage we can get here. And yes, you're right, if it doesn't really work out, then we can sell either home (whichever is best).

Justin

Ian_W

Hi justin,
It doesn't look as if it works to me, I'm afraid. Based on a £160K valuation you could borrow £136,000. On an IO mortgage at 5% interest your mortgage repayments would be about £566pm and the lender would be looking for you to be acheiving about £730 a month rent to allow the mortgage.

Plan B I'm afraid, justin, IMO.

justin138

Plan B? Oops, I haven't one! We can't sell until we've bought and moved in anyhow. But I'm grateful for your input, you've been really helpful.

Justin

leftieM

Justin, I presume you've already researched house prices in the Republic of Ireland? Most places are incredibly expensive. There's still a boom on there and prices are continuing to rise.

SnowyOwl_2

Hello Justin

If you haven't seen it before I thought you might like a look at

https://www.propertynews.com

It's more geared towards N.Ireland, but there are some properties in the south listed too. Perhaps a chat with a couple of "financial advisers" attached to the estate agents might help with some of your queries. There is quite a bit of reverse immigration so your circumstances probably won't be unique to all the property people you chat to. Even have a chat with some of the northern ones, as quite a few people have property both sides of the border so Sterling & Euro, and they must be getting their mortgages somewhere.

BTW I moved from London to Co.Down a while ago. I transported three cats in my Fiesta. It were a bit whiffy...can't imagine what it'd be like with 19 furballs!

If I happen to think of anything else useful I'll put another post up.