It pay to learn from other peoples mistakes, There was a BTL boom in Ireland that ended badly for a lot of people
I really don't know why people would pay from their own income for someone else to live in their apartment. If someone would not pay enought rent to cover your mortgage, you were paying too much for the apartment.
I would call that a BIG boom.
The buy-to-let landmine | The Post
Many of the borrowers enjoyed high incomes or bonuses during the boom - accountants, lawyers, doctors, builders, mortgage brokers but took big hits in the crash.
A lot of residential investment property was subsidised out of normal income in the hope of future equity gains, but that surplus income is no longer available.
Due to the more than 40 per cent fall in property prices since 2007, the option of selling the property and discharging the debt is not an option for those who find themselves in difficulty. One investor who spoke to The Sunday Business Post had four properties mortgaged with one lender for €1.8 million. He wants to sell the properties for €800,000 and service the remaining unsecured debt from his non-property business income, but the bank will not approve the deal.
Due to the more than 40 per cent fall in property prices since 2007, the option of selling the property and discharging the debt is not an option for those who find themselves in difficulty. One investor who spoke to The Sunday Business Post had four properties mortgaged with one lender for €1.8 million. He wants to sell the properties for €800,000 and service the remaining unsecured debt from his non-property business income, but the bank will not approve the deal.
I would call that a BIG boom.
In the worst case scenario, the losses would exceed €6 billion for the four institutions alone. Across the whole sector, that translates roughly to a €12 billion hit.
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