Working in UK, first time buy-to-let in Ireland?

Hi all, would appreciate some help on the below.

I moved to England 4 years ago and have been working in the UK ever since. I’m 29 and currently on a salary of 26,000 though this is currently maternity cover ending in december so I’m obviously looking for a permanent job next.

I’ve got 10,000 sterling saved up and would like (after getting it up more to about 20,000) to buy my first house… but in Ireland. I’d like to buy a 3 bed in Dublin and rent it, while I continue to work in the UK. I’d love to live and work in Ireland, but the unemployment is so high right now it’s not really an option.

I’ve been told a UK lender will not lend on a BTL basis in another country and I need to see if an Eire lender would lend to me.
My question is will an Irish bank consider lending to me, provided of course I’m in permanent employment? I’m under the impression you can’t have a buy to let mortgage as your first one (is this entirely true? I’d imagine you can just get a normal mortgage and then rent your house out, provided there’s nothing written into the contract saying you can’t?), but my situation is a little different from normal buy to let (I’d live in it if I could, but I can’t).

I’m flying blind a bit with this as I’ve been told Irish lenders may not lend to me because I work in another country and they can’t easily pull info on me about my employment/credit rating etc.

I think I represent a low risk candidate (assuming I’m in a permanent job) - no dependents, ok salary, no credit cards, excellent credit history (checked with experian’s free trial) and if I can provide all the info about my financials over here they should take them into account?

I’m nowhere near ready to buy yet, just trying to gather some preliminary info for the future. If anyone has any solid information about cases like mine that’d be really useful!

There are a number of reasons why Irish banks wouldn’t want to lend to you, not least the fact that your main centre of interests is where people go to escape underwater BTLs via bankruptcy.

Forgetting the BTL bit, a €30k salary for a 3 bed in Dublin is going to be a stretch. Your net disposable income must be €2k/mo max. 40% of that is €800. That will service a mortgage of about 125k (stress tested), plus your 20k deposit gives 145k with 86% LTV.

You can buy a 3 bed in Dublin for 145k, but you’d be looking at the lower end of the market (Ballyfermot, Finglas, crappier bit of Blanch) which possibly brings more risks of problem tenants, which will require more management.

Are you going to fly over when there’s a problem? Do you really want to live in those places when you come back?

Plus you’ll struggle to pay that mortgage out of net rent.

This is a bad and/or impossible idea, IMO.

You could “get your foot on the property ladder” in parts of Ireland for less than fifty thousand.

You will struggle to pay for a 3 bed in Dublin on your salary, tbh. At your age /salary / location I think you would be foolish to invest in Ireland, given you cannot even get a job here.

Thanks for the reply.

“There are a number of reasons why Irish banks wouldn’t want to lend to you, not least the fact that your main centre of interests is where people go to escape underwater BTLs via bankruptcy.”

I’m not familiar with BLTs I’m afraid, like I said I’m not ready to buy yet, just gathering info. Butmy record is clean, I’ve never bought a place before, have no bankruptcy or anything negative on my credit report. Could you explain?

145k is about right - I’ve been checking on daft and looking at stuff in the nicer end of smithfield, and there are numerous 3 beds going for around that there. Obviously this means I need a place that’s in good enough nick that I can upgrade the interior myself before renting it out, but that but let’s assume that I find a place like this, that I have the capital to do that.

I have a pretty big network of people who houseshare in dublin around my own age and it’s really difficult for them to find somewhere relatively central, well kept and with a decent landlord, so these are the people I’d look to cater to - from what I can see there’s a lot of demand for house shares and I’m a pretty good judge of character. As for managment, my dad has experience managing properties and lives in dublin so has said he can manage for me.

As for living in the house when I eventually come back… well it’s an option, but I’m looking at it as more of an investment. I can always sell it after renting for a while and shouldn’t be in negative equity, assuming the market will be bottoming out over the next few years. I calculated that 3 bedrooms rented out would more than cover the mortgage - or am I working on incorrect figures here?

As I said I’m not ready to buy yet, am happy to build my deposit up over time to show myself as less risky, and as life goes on hopefully my salary will go up.
I’m aware it’s not an easy thing, but I wouldn’t say impossible.

Good point damoivan! I suppose I’m looking at Dublin as it’s the capital, and therefore there’s always a rental demand there - I’d be worried about not being able to rent a place off somewhere wild, or as Eschatologist pointed out beig forced to accept dodgy tenants who damage the place because of a lack of rental demand.

Fair enough, I should revise the kinds of places I’m looking at downwards - it just seems a good idea to me to invest in a place while the prices are low, and have it paying itself off through rent while I’m busy with other parts of my life. Buying anything in Southeast England is impossible unless you’re very well off, and with the help to buy scheme there is just going to be another property bubble.

Just trying to think ahead and work out the best way forward financially really.

You’re already living in the place that people go for bankruptcy tourism, owing to its short discharge time. Given that they’re worried enough about Irish residents bailing out for a couple of years and coming back debt free, they’ll be doubly concerned about somebody who (in their eyes) has already done the first part of the job. Whatever your plans, they have a responsibility to think the worst (if only they’d done this ten years ago, we might have escaped some of our present mess).

“You’re already living in the place that people go for bankruptcy tourism, owing to its short discharge time. Given that they’re worried enough about Irish residents bailing out for a couple of years and coming back debt free, they’ll be doubly concerned about somebody who (in their eyes) has already done the first part of the job.”

Thanks for the explanation. They need to be cautious - a check on the candidate should tell them their financial history and if they’ve been declared bankrupt in the past though, right? Isn’t that what credit reports and all the checks run beforehand are for, to throw up any past problems?

I’d find it an odd perspective for them to take if they were still suspcious, having got all the info on a candidates history and it being straightforward but for working in the uk.

I left more or less out of uni (finished late as did an MA) tbh. With our rate of emigration isn’t it going to become more and more common in the coming years for younger people who’ve emigrated to want to buy in Ireland, either to live or as investment properties? Just curious as I’d have thought it’d become pretty common scenario in the next few years.

I take it the house you would buy, would be a potential house for you to live in if you return to Ireland?

It is very difficult to buy a 3 bed house in Dublin at the moment if you’re tied to a particular area.

And it is not that cheap if you need financing - repayments are not drastically different to boom time tracker mortgage ones.

If you had an intention of coming back to live here I could see your point but thinking of borrowing to buy a property as an investment here doesn’t make sense in my opinion.

Property is a good hedge against inflation if you buy close to the long term average of prices. We may well be close to that in Dublin. However if you borrow to do this you immediately add the cost of borrowing and therefore reduce your chances of making a gain. So your rent must cover your costs of borrowing, and your costs associated with maintaining the house. Even if there is another boom (possibly in 20 years when the current generation has forgotten ) will you have the good fortune to get out with a gain or will you (like most people did in the last boom) think that you can hang on a bit longer and get hit by the crash?

As you are only able to fund a single property in a single location you have no diversification of your investment - all your eggs are in one basket. And if you do not have funds invested in other sectors you are in an even worse situation. You are in a single asset sector, in a single location, in a single property.

You have also taken on a currency risk - Ireland and the UK have a history of pretty volatile exchange rate differences.

You have also the massive hassle of being a landlord although you are getting your Dad to do this so that might not worry you too much.

If you really want to invest in your future there are much better ways to do it and you should take professionial, fee based advice if you want to do that (and no - I have absolutely no vested interested in any company that provides such services).

The one great satisfaction in my life is that I am in my fifties with no debt and when I compare that to the stress borne by some of my more unfortunate peers who ‘invested’ in ‘borrow to let’ properties I feel mightily relieved. It’s a feeling that no possible gain could replace.

If you do go ahead with your plan I wish you the best of luck. You are being sensible in planning for your future at your age and I wish I had started earlier but I think a better investment plan is based on saving rather than borrowing. Saving now will put you in a better situation when you come to buy your family home and leave you with less debt when life becomes more expensive.

I thought you had to have 25% to 50% deposit for BTLs at the moment

I should also add that Estate Agents, in some areas are pitching asking prices low to attract interest, so be advised that MyHome asking prices may not even be close to what the sale price will be.

I don’t see anything in your proposal that makes sense. You’re young, about to be unemployed, can’t afford a house, clearly have done no research into how things are here right now - or how they are likely to dis/improve in the future, you talk about renting three rooms but give no indication what your figures are, you want a UK bank to give you money to buy in the most fucked up market on Europe with no indication of what this investment - mad word- might yield or when. In the nice area of Smithfield - where exactly is that high-potential property you’ve looked at - and what makes you think it will be a desirable area to live in?

It defies sense. I don’t see you how you could entertain the notion.

Calm down Orienlair! I’ve made it clear if you read my posts that I’m simply asking preliminary questions about a vague idea and have got some good advice from others here, particularly metalmike. No intention of doing anything in the near future - I was thinking years ahead.

I just very basically wanted to find out how would Irish lenders potentially view lending in the case that you’re working and living in the uk, that’s all.

And we wonder why the market is still irrational…

Hi Swingy.
I hope you are intending to pay your Dad for agency work if this plan goes ahead!
I have heard of a few fathers left holding the rental baby for folk who have emigrated and left their dwellings let out.
I tell you, I would not do it for mine!

Correct 25%