Age:
46
Spouse’s/Partner's age:
49
Annual gross income from employment or profession:
E56,000
Annual gross income spouse:
E44,000
Monthly take-home pay:
EUR 3,000 self
EUR 2,100 spouse (25% going into AVC)
Type of employment:
Both private sector employees
In general are you:
(a) spending more than you earn, or
(b) saving?
Is there an option C – treading water
We sort of just get by every year, I feel we’re trapped in our jobs by the size of our mortgage repayment and putting 500 per month by from after-tax income to pay the tax on the rental income.
I would like us to be a bit more free to either move to lower stress and lower paying jobs and/or to enjoy life a bit more as having buried two members of my family very young, life is for living, we’re not here forever. But my default setting is to plan for the future so I’m conflicted……
Earning more / moving jobs is not an option for either of us right now due to the age of our son and extended family commitments, believe me, we’ve examined all options for the moment.
Rough estimate of value of home
E600,000
Mortgage on home
E242,000 – 16 years remaining
Mortgage provider:
AIB
Type of mortgage: Tracker, interest only, fixed rate
Tracker
Interest rate
ECB + 0.75%
Other borrowings – car loans/personal loans etc
None, but probably next year we need to replace one of the cars.
Do you pay off your full credit card balance each month?
N/A don’t have any (I’m a bit of a spender so best I don’t have one )
Savings and investments:
E25,000 in prize bonds. Full disclosure – we didn’t save this, it was the result of the sale of another rental property a few years ago, after we put all we could into our pensions over a few years. We try to save 500 monthly but it all goes on the rental income tax return plus holiday / oil fill / Christmas.
Do you have a pension scheme?
Yes, was making AVCs but have ceased these recently due to parental leave reduction in our take-home. Company pays 10% and there’s approx. EUR 200k balance on mine.
His pension is also paid 10% by company plus AVCs at 25% with current balance approx. EUR 150k. We’ve prioritised getting his to a higher level over the last while.
Do you own any investment or other property?
Yes, bought 2005 for EUR 232k. Current value probably around same so effectively no CGT if we sold.
Mortgage outstanding of EUR 121k. 13 years remaining. Mtg pmnts 830 per month.
Tracker – ECB + 1.05%
Rental income EUR 800 per month (I know, I know, moved in just over two years ago so it’s only now I could raise the rent and it’s not what I want to do – they’re excellent tenants, hence our our quandary, please read on.…)
Ages of children:
1 aged 9.
Life insurance:
Yes through work for both of us plus mortgage protection on own home and level cover of EUR 208k on rental property (my life only).
What specific question do you have or what issues are of concern to you?
I realise we’re very fortunate in many ways, but also it feels like we’re constantly burning ourselves out to just tread water, or am I overly negative in my view of our overall position? It's good we've no loans, but I can't help but think we're barely treading water without a car loan etc. so are we actually able to afford all this or are we fooling ourselves?
We decided a while ago that when the current tenants in the rental property move out – which may not be for a few years – we would then sell and use the proceeds to reduce mortgage on our PPR. The reason being we’re just done being landlords, but the current tenants are excellent, the place is immaculate, so we were happy to leave them be. Same tenant's sister rented the house for several years' prior so we know she won't change overnight. Recent developments in the whole rental sector have me spooked that now might be a better time to sell than in a few years, and that it might not be the best idea to leave the timing of it to someone else but to take control of it ourselves while we still can!
BUT, they are excellent tenants, I would hate to put them out. However, if we don’t move now, after Oct we would need to give them 6 month’s notice – could that change to 12 overnight given labour’s failed bid to remove selling as a reason for ending a tenancy? It worries me for what will come next. I’m tired of propping up an asset that I seem to have less and less control over.
Not in RPZ yet but we all know that can happen anytime at the stroke of a pen. They moved in Oct 2019 when EUR 800 was about right, under the rules I could only have looked to increase the rent from Oct just gone, I’m only getting to look at all this now due to a family tragedy. I don’t want to increase the rent to market rates which let’s face it, could be anything, I could literally ask 1,400 for it but the highest bidder isn’t the best tenant, and I’m not going to do that to the current tenants. So, I could increase it to 1,000 pm, they are paying another 200, would probably then look for a few more things to be done / replaced, long story short we would still have to put by the same amount of money every year to pay the tax and upkeep, no-one is better off from a rent increase I don’t want to make but impending RPZ rules are sort of forcing me towards?
On the other hand, mortgage is a tracker plus an excellent level cover life assurance (on my life only) linked to it.
I don’t want to turn 50 in 4 years’ time with 300k debt hanging over us, that might not seem like much compared to some but feels a lot right now. What we are considering is if we could net 100k at least from the sale, reduce our own mortgage repayments to 800-odd but continue to pay 1400 as an overpayment of 600, bringing the term down to 9 or so years, and the 500 a month that currently goes on tax could be saved (with some into my AVCs again).
Thanks for reading.
46
Spouse’s/Partner's age:
49
Annual gross income from employment or profession:
E56,000
Annual gross income spouse:
E44,000
Monthly take-home pay:
EUR 3,000 self
EUR 2,100 spouse (25% going into AVC)
Type of employment:
Both private sector employees
In general are you:
(a) spending more than you earn, or
(b) saving?
Is there an option C – treading water
We sort of just get by every year, I feel we’re trapped in our jobs by the size of our mortgage repayment and putting 500 per month by from after-tax income to pay the tax on the rental income.
I would like us to be a bit more free to either move to lower stress and lower paying jobs and/or to enjoy life a bit more as having buried two members of my family very young, life is for living, we’re not here forever. But my default setting is to plan for the future so I’m conflicted……
Earning more / moving jobs is not an option for either of us right now due to the age of our son and extended family commitments, believe me, we’ve examined all options for the moment.
Rough estimate of value of home
E600,000
Mortgage on home
E242,000 – 16 years remaining
Mortgage provider:
AIB
Type of mortgage: Tracker, interest only, fixed rate
Tracker
Interest rate
ECB + 0.75%
Other borrowings – car loans/personal loans etc
None, but probably next year we need to replace one of the cars.
Do you pay off your full credit card balance each month?
N/A don’t have any (I’m a bit of a spender so best I don’t have one )
Savings and investments:
E25,000 in prize bonds. Full disclosure – we didn’t save this, it was the result of the sale of another rental property a few years ago, after we put all we could into our pensions over a few years. We try to save 500 monthly but it all goes on the rental income tax return plus holiday / oil fill / Christmas.
Do you have a pension scheme?
Yes, was making AVCs but have ceased these recently due to parental leave reduction in our take-home. Company pays 10% and there’s approx. EUR 200k balance on mine.
His pension is also paid 10% by company plus AVCs at 25% with current balance approx. EUR 150k. We’ve prioritised getting his to a higher level over the last while.
Do you own any investment or other property?
Yes, bought 2005 for EUR 232k. Current value probably around same so effectively no CGT if we sold.
Mortgage outstanding of EUR 121k. 13 years remaining. Mtg pmnts 830 per month.
Tracker – ECB + 1.05%
Rental income EUR 800 per month (I know, I know, moved in just over two years ago so it’s only now I could raise the rent and it’s not what I want to do – they’re excellent tenants, hence our our quandary, please read on.…)
Ages of children:
1 aged 9.
Life insurance:
Yes through work for both of us plus mortgage protection on own home and level cover of EUR 208k on rental property (my life only).
What specific question do you have or what issues are of concern to you?
I realise we’re very fortunate in many ways, but also it feels like we’re constantly burning ourselves out to just tread water, or am I overly negative in my view of our overall position? It's good we've no loans, but I can't help but think we're barely treading water without a car loan etc. so are we actually able to afford all this or are we fooling ourselves?
We decided a while ago that when the current tenants in the rental property move out – which may not be for a few years – we would then sell and use the proceeds to reduce mortgage on our PPR. The reason being we’re just done being landlords, but the current tenants are excellent, the place is immaculate, so we were happy to leave them be. Same tenant's sister rented the house for several years' prior so we know she won't change overnight. Recent developments in the whole rental sector have me spooked that now might be a better time to sell than in a few years, and that it might not be the best idea to leave the timing of it to someone else but to take control of it ourselves while we still can!
BUT, they are excellent tenants, I would hate to put them out. However, if we don’t move now, after Oct we would need to give them 6 month’s notice – could that change to 12 overnight given labour’s failed bid to remove selling as a reason for ending a tenancy? It worries me for what will come next. I’m tired of propping up an asset that I seem to have less and less control over.
Not in RPZ yet but we all know that can happen anytime at the stroke of a pen. They moved in Oct 2019 when EUR 800 was about right, under the rules I could only have looked to increase the rent from Oct just gone, I’m only getting to look at all this now due to a family tragedy. I don’t want to increase the rent to market rates which let’s face it, could be anything, I could literally ask 1,400 for it but the highest bidder isn’t the best tenant, and I’m not going to do that to the current tenants. So, I could increase it to 1,000 pm, they are paying another 200, would probably then look for a few more things to be done / replaced, long story short we would still have to put by the same amount of money every year to pay the tax and upkeep, no-one is better off from a rent increase I don’t want to make but impending RPZ rules are sort of forcing me towards?
On the other hand, mortgage is a tracker plus an excellent level cover life assurance (on my life only) linked to it.
I don’t want to turn 50 in 4 years’ time with 300k debt hanging over us, that might not seem like much compared to some but feels a lot right now. What we are considering is if we could net 100k at least from the sale, reduce our own mortgage repayments to 800-odd but continue to pay 1400 as an overpayment of 600, bringing the term down to 9 or so years, and the 500 a month that currently goes on tax could be saved (with some into my AVCs again).
Thanks for reading.
