Moneymakeover High expense era -3 in college and feeling really squeezed

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live123

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Personal Details


Your age: 48
Your spouse’s age: 50
Married


Number and age of children:
3 dependents (currently financially dependent due to university):

  • Age 23 – finishing MSc, expected to be financially independent by end of 2026 (contract secured)
  • Age 22 – finishing degree, contract starting September 2026
  • Age 21 – currently in 2nd year of university (living away from home)

All three live away from home during term time and are fully dependent, aside from summer income.

Income and Expenditure


-Annual gross income from employment or profession: €100,000
-Annual gross income of spouse/partner: €75,000 + company car (low BIK)


Other income:
  • Side business: approx. €25,000 per annum (currently stable with potential to grow)
  • Rental income: €1,800 per month (€21,600 per annum)

Monthly take-home pay: €7,900 (combined job salaries - not rental or side business)


Type of employment:
  • Both PAYE employees (permanent roles)

Employer type:
  • Both employed in the private sector

In general are you:
(b) Spending more than we earn at the moment


Summary of Assets and Liabilities


Family home value: Approx. €600,000
Mortgage on family home: €73,000
Net equity: Approx. €527,000


Cash: €25,000 (credit union)


Defined Contribution pension fund:
  • €300,000 (self)
  • €285,000 (spouse)

Company shares: None


Buy-to-let property value: Approx. €340,000
Buy-to-let mortgage: €160,000
Net equity (buy-to-let): Approx. €180,000



Family Home Mortgage Information


Lender: Pepper Mortgages
Interest rate: 3.9%
Type of interest rate: Variable
Remaining term: 4 years
Monthly repayment: €1,700


Other Borrowings
  • Car PCP: €750 per month

Do you pay off your full credit card balance each month? Don’t have one


Pension Information

Value of pension fund:
  • €300,000 (self)
  • €285,000 (spouse)
Contribution rates:
  • 10% (self)
  • 8% (spouse)

Buy-to-Let Properties

Value: Approx. €340,000
Rental income per year: €21,600


Rough annual expenses (excluding mortgage interest): unclear

Lender: Pepper Mortgages
Interest rate: ECB + 0.5%
Repayment type: Interest and partial capital
Monthly repayment: €650
Remaining term: 7 years

Note: Capital balance will remain at end of term; plan would be to refinance or clear at that point.

Other Savings and Investments
  • €25,000 in credit union
  • No other investments specified
Life Assurance
  • Whole-of-life policy in place with Irish Life, including serious illness cover
  • Premium: €130 per month
  • Cover linked to family home mortgage, with option to extend beyond mortgage term
  • Additional mortgage protection policy on buy-to-let property
  • Premium: €43 per month

Other Relevant Information
  • College fund of approx. €100,000 has now been fully used
  • Currently supporting 3 adult children through university (high cost phase)
  • One income stream (primary job) currently somewhat unstable - company not going great
  • Considering reducing employment hours to develop side business
  • Recent bereavement in the family has prompted reflection on stress levels and financial pressure


What specific question do you have / issues of concern?


We are currently under financial pressure due to supporting three children through university, increased cost of living, and one potentially unstable job.


We are considering whether to sell our buy-to-let property. While it generates rental income and has long-term potential as a pension supplement or future housing option for one of our children, it is also contributing to our current financial and mental strain.


If we sold the property, we could clear our family home mortgage and retain some additional equity in cash, which would significantly ease our current situation.


However, we have a strong emotional attachment to the property as it was our first home, and we are conscious that our financial position may improve within the next 12–18 months as our children become financially independent. We are also conscious that one of the kids may need the house in the future

But also the new rental laws are worrying and a stress


We are trying to determine whether it is better to:
  • Sell now to relieve financial and emotional pressure, or
  • Hold the property and manage through what may be a temporary period of strain

In addition, we would really value views on:

  • Whether there are other options or strategies we may not be considering
  • What people’s overall assessment of our financial position is
  • Whether we are overextending ourselves or simply going through a temporary high-cost phase

We also considered remortgaging the family home and release a small mount of equity to finish college off and extend the term of the mortgage by a yr or two ?? Maybe crazy - the thoughts of no mortgage is so good !


We would appreciate guidance on the best course of action given both the financial and lifestyle considerations.
 
Can the kids take out student loans and let them find their own way? I don't think anyone will recommend holding on to the rental property.
 
Will two of them not be finished college at the end of the month and can move home even if there contracts don’t start for a bit?

Does that change things?
 
Remortgaging the family home is on the extreme end and not necessary.

live123 said:
However, we have a strong emotional attachment to the property as it was our first home, and we are conscious that our financial position may improve within the next 12–18 months as our children become financially independent. We are also conscious that one of the kids may need the house in the future
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Emotional attachement is a bad reason to keep your BTL. Given all of the changes around rental rules, it is a liability. If you get a difficult tenant you will be adding huge stress to your life.

It's pretty peachy to be able to sell your BTL, clear your PPR mortgage, and still have a nice amount of cash left over.

Then instead of worrying about mortgages, you can spend more time on growing your side business.
 
I would get out a notepad and workout your annual expenses - it's hard to say if you are overspending if you don't know where your 7,900 a month is spent on
 
live123 said:
we have a strong emotional attachment to the property as it was our first home, and we are conscious that our financial position may improve within the next 12–18 months as our children become financially independent. We are also conscious that one of the kids may need the house in the future
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This makes no sense to me. You have an emotional attachment to a property that you have strangers living in? The property isn't loving you back! It is causing you stress and financial strain.

And after all the stress and financial strain, would you let one of your kids live in it? Is it not a future pension?

Beside the property, your kids living away from home for college are the big financial issue. But college is finished in a few weeks, are they not back home then and no rent to pay? I presume they will get summer jobs and then two of them will be working full time in September and paying their own way. Can you charge them housekeeping if they are still living at home.

What is your balloon payment on the car? Paying €750 a month for a car is nuts. And then rolling it over to pay another €750. You are renting a car...and an expensive one at that cost. Get a smaller car.

Your pensions are behind the curve, so having rental income is a good supplement to your pensions in later years if you can hold onto the property and continue to rent it (as a business and not to your kids). Use the credit union money to pay for other things that you need to cover, like college next year. Boost your savings with your side hustle income and get kid 3 through college.
 
arbitron said:
Emotional attachement is a bad reason to keep your BTL. Given all of the changes around rental rules, it is a liability. If you get a difficult tenant you will be adding huge stress to your life.
Click to expand...
arbitron said:
It's pretty peachy to be able to sell your BTL, clear your PPR mortgage, and still have a nice amount of cash left over.
Click to expand...
arbitron said:
Then instead of worrying about mortgages, you can spend more time on growing your side business.
Click to expand...

100% correct advice on the rental property.

Much better to sell and use the proceeds to pay off the PPR mortgage and/or put the money into your pension and/or increase your cash cushion in case anything happens to the second job.
 
Thanks for your reply - Yes the kids will be working for the summer - however the jobs are in a different count so will prob be moving in August/sept and we will help them with deposits and supplement living expenses if needed until forts pay check.

I am only think of having a home for the kids if needed in the future given the talk of the difficulties getting on the property ladder - o don’t know what that would look like - temporary situation to save of a mortgage and we would only charge low rent or maybe they could buy it from us at the time - I’m not really sure - just may be an option that’s all

Regarding my pcp - yes it very high - I was in a car accident yrs ago and have a lot injuries and need something comfortable for me. Many cars I travel in can increase pain lasting days after. But I will look again and see if I can find anything else that works. I would love a smaller and cheaper car for many reason.
 
You’ve 3 kids so I’m not sure how you plan to divide the home or is it somewhere they can all share? Keeping it for the next generation is laudable but it’s one house for 3 kids.

If it is somewhere they will probably live then holding on to it for a year or two would make sense as they’ll be paying a lot of rent and you may as well keep it in the family.

Seems to me you are nearly at the end of a very expensive period. You’ll only have one in college next year.
 
If the rental property was your first home, then you have a partial CGT shield (PPR relief) that is gradually reducing the longer you hold onto the property.

In your shoes, I would:-

1. Sell the rental property;
2. Discharge any CGT arising on the sale;
3. Get the kids through college;
4. Pay off the mortgage on your family home;
5. Buy a car with zero debt; and
6. Dramatically increase your tax-relieved pension contributions.
 
If you have the opportunity to sell the BTL without the encumbrances of a sitting tenant who may overhold, and before any additional onerous regulations are introduced requiring additional spend on the BTL - that can only be capitalised over an 8 year period or offset against a CGT liability, my view, as a soon to be ex-landlord ( – sold 4, one remaining) is to view this as a fortunate opportunity to reduce your risk and enable you to get rid of your PPR mortgage. Paying off your PPR mortgage will give you a great sense of security and relief. As other posters have advised, post tax, the return is not worth the risk.
 
Sarenco said:
6. Dramatically increase your tax-relieved pension contributions.
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You should ideally be maxing these at the earliest possible opportunity as a priority.

You are 48 and 50. Most people at this age are at the peak of their earnings capacity. The most tax-efficient way of saving and investing is through pension contributions. I don't know what age you are considering retirement at, but if you followed the suggestions on this thread and pushed hard on your pensions, you and your partner will have combined pots well into the €1m range in ten years time and would at least have the option of retirement should you so wish.
 
My husband and I are the same ages as you both with the same income levels and we also have 3 children except ours are each c10 years younger than yours. I really think you are to be congratulated on getting two children to the point of independence and so well educated at your ages. I am slightly envious.

I agree with the point about selling the BTL and would add two points to next steps.
1. If you sell before end of October this year you could back date AVCs for 2025 and also make AVCs for 2026.
2. Take a lovely family holiday before the two eldest start their first jobs and celebrate your achievements - you all deserve it.
 
Sell the rental and pay off your home mortgage. Cancel the mortgage protection insurance on both. Now you have about €30k more in your pocket to play with each year. Plus €160k - CGT from the equity when you sell. You only lose the rental income you make after tax and expenses. And you will have a much more peaceful life without a rental and 2 mortgages to be thinking about.
And your cashflow is much, much better. Tweak your AVCs and your are even better off in the long run.

For reasons which are obvious to anyone not living under a rock you are better off not being a landlord.
But also have a think about what you said about one of the children living in the rental house. How will the other children feel about that? Will they buy them out. All sorts of questions there and reasons to just get rid. Realistically the children are ready to stand on their own feet now and you should be able to relax and enjoy your life stress free from now on.
 
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