Property Investors & Investment Property Mortgage Donegal

Some useful information when buying property in Ireland

Investment Property Mortgage Donegal House

For Property Investors doing Investment Property Mortgage in Letterkenny, Donegal

First-time investor issues: Buying an investment property is an important long-term financial decision. Before buying you should seek independent advice as to the merits of the purchase This advice should include the following

  • Understanding the impact of rising interest rates
  • Understanding the taxation implications
  • Understanding the obligations of a landlord

A minimum deposit of 30% is required.

Matters to consider when buying a residential investment property

  1. Be prepared to become a landlord and take on the responsibilities associated with this. There is work involved and before embarking on this type of investment for the first time, talk to somebody who has already been down this road.
  2. Discuss with your advisor the implications of changes in occupancy rates, mortgage rates, and other factors.
  3. Before buying, work out exactly what is included in the sale and budget carefully for fit-out costs and other associated costs e.g. stamp duty, solicitor, etc.
  4. In some instances, in order to purchase a residential investment property, it will be necessary to have both your current residence and the new property as security for the lender. You should carefully consider the implications of this requirement, should this come with your lender.
  5. Ensure you obtain legal advice before any proposed lettings.
General advice notes for residential investors

In general, residential investment properties are an excellent form of investment provided of course that you do not overpay for the property in the first instance.

Some points to consider before heading to Property Investment Mortgage in Letterkenny, Donegal
  1. Does the investment make economic sense? Is the return on investment adequate? If you need help working this out. Give us a shout at 074 910 3938
  2. You can no longer assume that property prices will increase. This is a long-term investment and you need to be certain that the term fits in with your long-term financial plans.
  3. Satisfy yourself with the rental potential for your chosen property. Don’t take the selling agent’s advice as a guarantee. If you are buying an apartment make sure you see the Management Company accounts. Talk to existing owners in the area. Talk to existing tenants.
  4. You need to be in a position to live with vacant periods. Keep a fund aside to maintain repayments in the event that your property is vacant for some period of time.
  5. Be sure you budget for taxation obligations.
  6. To keep costs down consider supervising the letting and rent collection yourself. For multiple investments, this may not be possible. If this is possible remember this is your property and there is no better way to know your tenants than to vet them at the outset and to make regular monthly visits.
  7. Be prepared to become a landlord and deal with the related tenant issues.
  8. A slightly lower rent from a solid long-term tenant can very often be the best option

Some useful information Stamp Duty If you buy a property in Ireland you will have to pay Stamp Duty which is a tax based on the value of the property. Rates correct as of Feb 2019

Stamp Duty rates on land and buildings
Type of propertyConsiderationRate of Stamp Duty
ResidentialFirst €1 million1%
ResidentialExcess over €1 million2%
Non-residential6%*

For further information on Stamp Duty click here Stamp Duty

Tenancy Registration with the Residential Tenancies Board (RTB)

Registration of tenancies
What is the tenancy registration system?
It is a requirement for all landlords to register details of their tenancies within one month of their commencement. For more and how to click here Tenancies Board The information on the register will be used to provide aggregate data on the privately rented sector. Personal details such as the tenant name, landlord name, rent, etc. will not be made public.

What dwellings are exempt from the tenancy registration system?
The registration of some tenancies in certain dwellings (a “dwelling” means, a property let for rent or valuable consideration as a self-contained residential unit and includes any building or part of a building used as a dwelling and any out office, yard, garden) is exempt

(a) a dwelling that is used wholly or partly for the purpose of carrying on a business (the exemption does not apply to a dwelling that is for example above a retail unit)

(b) a dwelling to which Part II of the Housing (Private Rented Dwellings) Act 1982 applies,

(c) a dwelling let by or to— (i) a public authority,

(d) a dwelling, the occupier of which is entitled to acquire, under Part II of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978, the fee simple in respect of it,

(e) a dwelling occupied under a shared ownership lease,

(f) a dwelling let to a person whose entitlement to occupation is for the purpose of a holiday only

(g) a dwelling within which the landlord also resides (i.e. landlord and tenant share the same self-contained property)

(h) a dwelling within which the spouse, parent, or child of the landlord resides, and no lease or tenancy agreement in writing has been entered into by any person resident in the dwelling

(i) a dwelling the subject of a tenancy granted under Part II of the Landlord and Tenant (Amendment) Act 1980 or under Part III of the Landlord and Tenant Act 1931 or which is the subject of an application made under section 21 of the Landlord and Tenant (Amendment) Act 1980 and the court has yet to make its determination in the matter

Will RTB provide confirmation of exemption from the tenancy registration system?
No, the RTB will not routinely provide individuals confirmation of exemptions from the tenancy registration system.

What happens if I don’t register? Until such time as a tenancy has been entered into the RTB’s register of tenancies, the RTB is precluded from dealing with any dispute relating to the tenancy that may be referred to it by the landlord. The registration requirement applies only to ongoing tenancies so it is important that the registration process be completed as quickly as possible in case any difficulties arise in relation to the tenancy.

What is the RTB doing about unregistered landlords?
Landlords are legally obliged to register all tenancies to which the Act applies. Failure to register a tenancy may result in a criminal conviction A person, if convicted under the Residential Tenancies Act 2004 for failing to comply with a notice, faces a fine and/or imprisonment, along with a daily fine of €250 for a continuing offense, the current fine is up to €4,000 and or 6 months imprisonment. Where prosecution proceedings have been instituted and on conviction, the RTB will at least seek reimbursement of costs.

What happens if a landlord or occupier does not comply with the PRTB’s notices about not registering? If the landlords and occupiers fail to comply with the provisions of the Residential Tenancies Act 2004 as outlined above, the PRTB will exercise the power open to it under the Act in relation to prosecutions. However, this process may take time as in order to maximise success and effective enforcement, it is essential that the information available to the RTB is accurate and that the RTB operates in accordance with the appropriate procedures. This is because the successful conviction of the landlord or tenants of criminal offenses requires a high standard of proof and a correct name and address are vital to this process.

Are landlords eligible for tax relief on interest paid on borrowing to purchase investment properties?
You can deduct the interest on mortgages used to purchase, improve or repair rented residential property when working out your rental income for tax purposes. You must show that you have registered all tenancies in the property with the Residential Tenancies Board (RTB). Interest can only be deducted during the period in which the property is let. The amount of interest you can deduct on these mortgages has increased in recent years:

  • Prior to 2017, it was 75% of the interest
  • In 2017, it was 80% of the interest
  • In 2018, it was 85% of the interest
  • From January 2019, it will be 100% of the interest (as announced in Budget 2019)

Interest is treated as accruing on a daily basis and the date the loan was taken out is not relevant.

Will the RTB meet with Residents/Community Associations? Unfortunately, due to the volume of work in the PRTB and the demands on its staff, it is not presently possible to receive deputations from or supply speakers to meetings of Residents’ Associations, Community Councils, etc.

Why does the form ask for the PPS numbers and other details?
The PPSN is the State identification number for dealings with public sector bodies. It will act as the unique tenant and landlord identification number on the registration record. Most of the other details are required as a record of the tenancy in case disputes arise or so as to gather aggregated data on the sector. Certain contact details are also requested. This is necessary as the registration application must be made within one month of the commencement of the tenancy and if later, the landlord will have to pay a double fee (currently €140).

Why is there a confirmation letter sent to the tenant?
A confirmation letter is sent to all tenants as well as landlords acknowledging the registration of the tenancy with the RTB. Landlords and tenants must quote the registration number given in the letter in any future correspondence with the RTB.

When can I expect a letter from the RTB acknowledging my application to register?
Confirmation letters are being issued to landlords and tenants in all registrations processed by the RTB generally on a 2-weekly basis. However, the registration process can take upwards of 6 weeks depending on the volume of applications on hand at any given time.

What do I do with the confirmation letter?
Landlords and tenants must quote the registration number given in the letter in any future correspondence with the RTB. In addition, landlords may use the confirmation letter as a receipt for payment of the registration fee, where appropriate. Landlords may be requested to provide this confirmation letter to the Revenue Commissioners when seeking mortgage interest relief on residential properties.

What do I do if my tenant leaves my rented property?
If your tenant(s) leaves the rented property then it is deemed to be the end of the tenancy. You will need to register with the PRTB the new tenancy within one month of the new tenants moving in. For tenancy, registration click here https://bit.ly/2m65afi. If at least one of the tenants remains in the rented property and the other tenants are replaced by new tenants, then this would be considered an update of the tenancy details. If there is a change of rent you are required to notify the RTB and when doing so, you are required to advise of any other change of the tenancy details that have arisen in the interim – no fee is payable when providing an update of tenancy details.

I lease my property to a management company which in turn rents out the property to individual tenants; I have no relationship with the tenants of the management company. Do I need to register?
In the above scenario, there are two actual tenancies and they both need to be registered. Under the RTA, the landlord is legally obliged to register the tenancy where the dwelling is leased to the management company and the management company is legally obliged to register the tenancy with the individual tenant(s). Each tenancy will then have a unique RT number assigned to it. The above applies in all arrangements where the dwelling is sublet and is ultimately a residential dwelling other than for those dwellings excluded in Article 3 of the RTA (a list of excluded dwellings is provided above in Question 2.)

Need for Mortgage Protection for Investment Properties

Some lenders do not insist on mortgage protection as a requirement. Where there is a potential deficit in an investor’s estate to the extent that there may be a loss on the sale of the investment property. Mortgage protection covers this gap and protects you. Our advice would alway be to put mortgage protection in place though.

Checklist for Property Investors Donegal

We need the following.

  • Photographic ID (originals or certified copies)
  • Address verification (household bills)
  • Proof of PPSN
  • Most recent 6 months’ bank account statements (for all bank accounts)
  • Most recent 6 months’ savings account statements
  • Most recent 6 months’ credit union statement (if any)
  • Last 6 months’ credit card statements (if any)
  • 12 months’ statement on all loans (if any)
  • Latest annual statement on all Mortgages (if any)
  • Copy of marriage cert (if married)
  • Copy of Divorce or separation agreement (if applicable)
  • Credit history report from any Country you are living, working or have bank accounts in, if outside of Ireland

If Employed

  • 3 recent payslips
  • Most recent Employment Detailed Summary ( available on your online revenue account)
  • Salary Cert (available from your broker or lender)

If Self Employed and for existing rentals

  • 2 years’ accounts as a min, if you have 3 years’ accounts even better
  • 2 years’ revenue notice of assessment ( 3 years’ even better)
  • Form 11 & Chapter 4 for the 2 or 3 years.
  • Confirmation from an accountant that all taxes are up to date
  • Confirmation of tax clearance cert
  • Most recent 6 months’ business bank account statements (for all bank accounts)
  • 12 months’ statement on all business loans

Questions If you have any questions or need advice Give us a call at 074 910 3938 or  email us

Recommendation on Application for Investment  Property Mortgage in Letterkenny, Donegal

The best recommendation is by far to get guidance from a source not connected to the lenders. The ideal person to provide this advice is a financial broker/mortgage broker (like us). Many people talk themselves out of a mortgage by contacting lenders directly without first seeking guidance.

I advise you to consult with me before making any mortgage financial choices since the material above is provided for informational purposes only and in no way represents financial advice. I advise using a comprehensive strategy when making financial plans, and I can assist you in implementing your ideas.

Make Sure to Find a Mortgage  Broker Donegal Advice

When  looking for a Mortgage in Letterkenny, Donegal, and Ireland, engaging a mortgage broker might provide a number of advantages and valuable benefits. Some benefits of hiring Brokers and Advisors are: offering access to a wide range of lenders, helping you save time and effort, providing expertise and knowledge, negotiating power, and personalized mortgage service.

Make an appointment with one of our mortgage advisors in your search for a mortgage in Donegal.  We are available to assist you with your Mortgage concerns and worries. Ask us questions about mortgages. We cover first-time buyers’ mortgages, re-mortgage or switcher mortgages, self-build mortgages, investor or Holiday home mortgages, and more. Contact findamortgage.ie in Letterkenny, Co Donegal, or by phone at 074 91 03938.

The Central Bank of Ireland regulates Mortgage Brokers in Donegal , Ireland

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2023-02-13
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M C.A.
2023-01-30
Paschal is not only an adviser but a good person. He has helped me set up my mortgage 15years ago and he’s still around giving advice. He’s very trustworthy. Thank you Paschal and God bless you for all your good deeds.
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2023-01-18
Pascal & the team are excellent to deal with - highly recommend
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Paul Magee
2022-12-15
Excellent service from Pascal and the team. For a first-time buyer, his mortgage advice and expertise took the hassle out of the entire process. Highly recommend.
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Meanit Web Design Agency Donegal and Dublin
2022-10-14
Independent, clear, honest, friendly, trustworthy - we recommend Pascal Curran and the team at Advice First to our clients in Donegal, friends and family. Just simply explained, professional, experienced financial advice to suit your specific needs.
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2022-09-28
Pascal gives good unbiased financial advice. I'd recommend him over many of the other "advisers" available.
Warning: If you do not keep up your Investment Property Mortgage Donegal repayments you may lose your home