If you own your own home, have a mortgage well under control and very little extra financial commitment, chances are you are considering an investment property. You know you can afford to do this and with so many incentives available from financial institutions your only questions are where and when? 

Location is extremely important when considering an investment property as your rental income will be vital to the transaction being successful.  If you purchase in a good rental area, have a property that is easy to maintain, a good lease agreement in place and keep good records of all transactions relating to the property you are very likely to make a success of the transaction. 

The vital ingredient in an investment property is to remember that there is no room for sentiment; you want a property that will make you money.  You hope and should be able, to make the rental income cover the interest costs and then the property will, in an ideal world accumulate value over time. 

Some important facts:

Interest paid on an investment mortgage can be offset against any rental income. 

Section 23 relief is a tax relief that applies to rented residential property in a tax incentive area.  It is available to a person who has incurred expenditure on the purchase, construction, conversion or refurbishment of a qualifying property and who lets that property, having complied with certain conditions. Relief for expenditure incurred can be set against the rent received from that property and other Irish rental income so that the amount of a person’s taxable income is reduced. 

It should be noted that it is the first use of the property following construction, conversion or refurbishment that determines the type of relief that will apply. If the property is first used by an individual as his or her sole or main residence, owner-occupier relief applies. If the property is first let by an individual under a qualifying lease, section 23 type relief applies. It is not possible for both types of relief to apply to the same property at different times.  

Let Metropolitan Finance guide you through the process