I came from non-EU country and lived in Ireland for > 10 years. Bought a property in 2014, renovated and lived there for 10 years and paid off the mortgage early. Was enjoying life with no debt, including no mortgage, however was looking for a larger property as the kids are growing up. Recently I have bought a larger house, but kept the original. Both are in West Dublin with good transport links.
Thinking of my options:
1) selling and reducing the mortgage on new house with the proceeds or part of them (potentially investing a portion into shares).
2) renting/keeping as investment/income stream for retirement ages.
In general I am coming from a culture and country with high interest rates and where most properties are bought outright with the help of relatives. This country is also a potential place of retirement (I have potential of inheriting a property in the home country), with lower living expenses, although this is not a given as the political situation is uncertain in that region. Having an income stream at older age from Irish property could allow for a decent living there.
Another consideration: could easily downsize into original property, leaving the larger one for the kids, or vice versa, for when they are at college/young adult times. I don't see a reason for paying for college accommodation if they're in Dublin. And yet I realise that the tax on rental would be extortionate.
Personal details
Your age: 39
Your spouse's age: 39
Number and age of children: 2 children (6, 8).
Income and expenditure
Annual gross income from employment or profession: 144K + yearly bonus of ~25K (varies +- year on year)
Annual gross income of spouse/partner: 83K
Monthly take-home pay: 10.5K/month without bonus, 11.5K with the bonus (~12K bonus once a year)
Type of employment: employee.
Employer type: private company.
In general are you:
- saving. Previously -4-5K month, currently less (1-2K) due to larger mortgage (see below).
So overall spending ~3K on the mortgage + 4K other life expenses.
Current expenditure is high due to furnishing and other purchases for the house.
I would also like to invest ~ 30-50K into house repairs/renovations in the next couple of years.
Summary of Assets and Liabilities
Family home value: 770K
Mortgage on family home: 610K
Net equity: 160K (>20%)
Cash: 13K (small amount for current needs, as have access to some liquid shares in case of emergency).
Defined Contribution pension fund: 180K
Company shares : 120K (+ 80K still to vest within 2 years)
Other shares: 30K
Second (initially bought) Property value: 380K (potential gross rent 2800 eur/month, with net profit of 1000 eur/month (after taxes and other expenses))
Second (initially bought) Mortgage: 0K
Total net assets: ~880K
Family home mortgage information
Lender: AIB
Interest rate: 3.25%
Type of interest rate: 200K Fixed at 3.25%,410K variable at 3.95% (pending decision on selling vs renting out)
If fixed, what is the term remaining of the fixed rate? 2 years
Remaining term: 30 years
Monthly repayment: 2850
Other borrowings – car loans/personal loans etc
0K
Do you pay off your full credit card balance each month? Yes
Pension information
Value of pension fund: 180K
Own contributions: 8% + 8% employer
For spouse: 8% + 5% employer
Other information which might be relevant
Life insurance: 100 eur/month
What specific question do you have or what issues are of concern to you?
I would like to have an option to retire after 60, having sufficient 'passive' income streams. At the same time, I would like to provide an opportunity for my children to have a good starting position, without the absolute need for them to pay someone else's mortgage, or living with the parents until they're 30+.
Any advice is welcome on maximising wealth growth with these considerations in mind. Thank you.
Thinking of my options:
1) selling and reducing the mortgage on new house with the proceeds or part of them (potentially investing a portion into shares).
2) renting/keeping as investment/income stream for retirement ages.
In general I am coming from a culture and country with high interest rates and where most properties are bought outright with the help of relatives. This country is also a potential place of retirement (I have potential of inheriting a property in the home country), with lower living expenses, although this is not a given as the political situation is uncertain in that region. Having an income stream at older age from Irish property could allow for a decent living there.
Another consideration: could easily downsize into original property, leaving the larger one for the kids, or vice versa, for when they are at college/young adult times. I don't see a reason for paying for college accommodation if they're in Dublin. And yet I realise that the tax on rental would be extortionate.
Personal details
Your age: 39
Your spouse's age: 39
Number and age of children: 2 children (6, 8).
Income and expenditure
Annual gross income from employment or profession: 144K + yearly bonus of ~25K (varies +- year on year)
Annual gross income of spouse/partner: 83K
Monthly take-home pay: 10.5K/month without bonus, 11.5K with the bonus (~12K bonus once a year)
Type of employment: employee.
Employer type: private company.
In general are you:
- saving. Previously -4-5K month, currently less (1-2K) due to larger mortgage (see below).
So overall spending ~3K on the mortgage + 4K other life expenses.
Current expenditure is high due to furnishing and other purchases for the house.
I would also like to invest ~ 30-50K into house repairs/renovations in the next couple of years.
Summary of Assets and Liabilities
Family home value: 770K
Mortgage on family home: 610K
Net equity: 160K (>20%)
Cash: 13K (small amount for current needs, as have access to some liquid shares in case of emergency).
Defined Contribution pension fund: 180K
Company shares : 120K (+ 80K still to vest within 2 years)
Other shares: 30K
Second (initially bought) Property value: 380K (potential gross rent 2800 eur/month, with net profit of 1000 eur/month (after taxes and other expenses))
Second (initially bought) Mortgage: 0K
Total net assets: ~880K
Family home mortgage information
Lender: AIB
Interest rate: 3.25%
Type of interest rate: 200K Fixed at 3.25%,410K variable at 3.95% (pending decision on selling vs renting out)
If fixed, what is the term remaining of the fixed rate? 2 years
Remaining term: 30 years
Monthly repayment: 2850
Other borrowings – car loans/personal loans etc
0K
Do you pay off your full credit card balance each month? Yes
Pension information
Value of pension fund: 180K
Own contributions: 8% + 8% employer
For spouse: 8% + 5% employer
Other information which might be relevant
Life insurance: 100 eur/month
What specific question do you have or what issues are of concern to you?
I would like to have an option to retire after 60, having sufficient 'passive' income streams. At the same time, I would like to provide an opportunity for my children to have a good starting position, without the absolute need for them to pay someone else's mortgage, or living with the parents until they're 30+.
Any advice is welcome on maximising wealth growth with these considerations in mind. Thank you.
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