H
Hino
Guest
I have recently signed up to invest in a retail centre in a major retail park in Spain through a reputable wealth adviser. While the park is currently in construction it is fully prelet.
The rental yield is currently lower to attract tenants and is expected to be revised upwards considerably in a few years.
The projected IRR is 8.8%-12% and the investment has an estimated timeline of 5-10 years.
Most of their projects have however been sold within 3-4 years with an average return of 25% but obviously this is no guarantee and there is no point on holding out for that outcome.
The principal investment is 300k on an interest only for the first 3 years so repayments are 15k per year rising to 30k in year 4 as some of the capital portion begins to be paid off. Year 4-25 pays off the capital repayment. Obviously the investment wouldnt be intended to run for 25 years so somewhere between year 5-10 it will ideally be repaid.
Performance fees are 20% of any return in excess of a compounded 8% pa
Although pensions are absolutely the most tax efficient way to release funds out of a company to invest in something like this I have decided that I would prefer to simply release funds from my company which i will clearly have to pay tax on at the highest rate.
Seeing as the repayments for the first few years will be approx 15k I will have to withdraw approx 29k per year to make these payments at least for the first 2-3 years.
I have also invested in a new york residential project with an estimated 2 year timeline and an IRR of 21%. Investment: US350k paid interest only in US dollars every month so am hoping, all going well with (i appreciate that us dollar is not great at the moment) that the return (70-80k)on this can be paid in to pay 2-3 more years on the spanish investment.
I am a little anxious simply on the size of the spanish repayments particularly once it hits year 4. I also appreciate that my releasing funds and not doing it through a pension may not be the wisest in many eyes
Would someone mind giving me their opinion on the above.
The rental yield is currently lower to attract tenants and is expected to be revised upwards considerably in a few years.
The projected IRR is 8.8%-12% and the investment has an estimated timeline of 5-10 years.
Most of their projects have however been sold within 3-4 years with an average return of 25% but obviously this is no guarantee and there is no point on holding out for that outcome.
The principal investment is 300k on an interest only for the first 3 years so repayments are 15k per year rising to 30k in year 4 as some of the capital portion begins to be paid off. Year 4-25 pays off the capital repayment. Obviously the investment wouldnt be intended to run for 25 years so somewhere between year 5-10 it will ideally be repaid.
Performance fees are 20% of any return in excess of a compounded 8% pa
Although pensions are absolutely the most tax efficient way to release funds out of a company to invest in something like this I have decided that I would prefer to simply release funds from my company which i will clearly have to pay tax on at the highest rate.
Seeing as the repayments for the first few years will be approx 15k I will have to withdraw approx 29k per year to make these payments at least for the first 2-3 years.
I have also invested in a new york residential project with an estimated 2 year timeline and an IRR of 21%. Investment: US350k paid interest only in US dollars every month so am hoping, all going well with (i appreciate that us dollar is not great at the moment) that the return (70-80k)on this can be paid in to pay 2-3 more years on the spanish investment.
I am a little anxious simply on the size of the spanish repayments particularly once it hits year 4. I also appreciate that my releasing funds and not doing it through a pension may not be the wisest in many eyes
Would someone mind giving me their opinion on the above.
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