How do we stand ,dont seem to have any cash

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elcato

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This is where your money is going every month, you're subsidising your tenants.
Of course you've taking into account that rents are rising over time ? His tenants will still be paying 1300 amonth in 20 years time ?
 

ClubMan

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I know the chatter about housing is banned but I can't believe no one has spotted the elephant in the corner here. An investment property on an interest only mortgage which is costing the OP 300 Euro EVERY month before any costs (maintenance fees, depreciation, etc).

This is where your money is going every month, you're subsidising your tenants.
See my post above :)
Or even earlier...
Some questions and observations.

...

2) You are paying out €300 a month more on your mortgage than you are getting in on rent. Hopefully, this is because you are paying off capital. Switching this to interest only will save you some outgoings.

...
 

Howitzer

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Of course you've taking into account that rents are rising over time ? His tenants will still be paying 1300 amonth in 20 years time ?

As are (currently) interest rates. The one thing not changing on an IO mortgage is the debt.

The Daft rental report showed rents were only now greater than the level the reached in 2002, 5 years ago. There is no guarantee whatsoever that the OP will be able to achieve significently higher rents over the short to medium term of the mortgage, and certainly not the 27.3% increase needed to break even with interest payments (at current levels) alone.

Assuming a uniform 5% increase in rents, and no increase or decrease in interest rates, the OP would be at a break even point on a day to day basis in 5 years, and would recoup the amount of subsidised rent in 9 years.

Assuming no maintenance charges, voids, insurance or further expenditure. Once those are taken into account a period of 20 years before the OP sees a profit from the rental income would seem about right.
 

Howitzer

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Or even earlier...

I missed extopias post, there was no further reference to it. Brendan assumed the mortgage wasn't IO and suggested changing it to IO. The OP subsequently clarified that the mortgage was already IO, hence the incredulous post by myself.
 

!RAY

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The investment property is costing me 300 per month but i have made about 110,000 on this and any loss i will offset against capilal gains when i sell .So i look at this as a saving plan. I am going to sort out the cc.As for the car ,well i could be dead tomorrow .I dont really worrie about money and do belive in living for today but also look after the future. MY post as i stated above was just a rant about how expensive ireland has got.There are a lot worse off so i am thankfull for what i have got.
Cheers
Ray
 

ClubMan

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but i have made about 110,000 on this
Do you mean capital gains - on paper right now? And does this figure account for all costs incurred to date including any periods during which rental income was less that mortgage and other costs or maintaining the asset?
MY post as i stated above was just a rant about how expensive ireland has got.
So you just wanted to moan and didn't really want assistance? What a waste of people's time. :rolleyes:
 

Kendr

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The investment property is costing me 300 per month but i have made about 110,000 on this and any loss i will offset against capilal gains when i sell .So i look at this as a saving plan. I am going to sort out the cc.As for the car ,well i could be dead tomorrow .I dont really worrie about money and do belive in living for today but also look after the future. MY post as i stated above was just a rant about how expensive ireland has got.There are a lot worse off so i am thankfull for what i have got.
Cheers
Ray

Heck of a strange way to ask how he stands because he doesn't "seem to have any cash". If you don't (worrie) worry about money why bother posting in this section? Just curious.
 

!RAY

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“MY question was ,I feel I am doing ok have a lot of investment shares, property there are a lot worse off. Anyway I have done a budget and work out I should have 400 euro a week left after paying loans,avc,investment . It just never works out that way everything in this country is so expensive. Do other people feel the same?”



Hi
The investment property is costing me around 300 per month .This gives me a loss on my investment which I will offset against c gains tax. I have made about 110,000 on the property at the mo .I do feel that prices while steady at the moment ,will still increase at a slow rate. Properties at present worth about 380,000 say 3% increase 11,400 per year. About the car ,well could be dead tomorrow (hope not).I don’t want to go through life not enjoying the good things .I can afford it at the moment and realize I am lucky to have what I have there are a lot worse off through no fault of there own. In 3 months time cc will be gone and will still have 25,000 in shares.
Cheers
Ray
 

Bronte

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You cannot offset the 300 rental income deficit per month against capital gains.

There is no guarantee that property prices will go up, nor is their a guarantee that rents will go up. If you estimate that property prices are going up by 3% where does that leave you in relation to inflation (currently 5% in Ireland?). Also at some point people are just not going to be able to keep increasing their rents by the huge percentages that we have seen in the recent past.
 

extopia

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“It just never works out that way everything in this country is so expensive. Do other people feel the same?”

It depends on how much you earn. In your case, for example, your car is expensive compared to your salary. You've decided it's worth it, which is fair enough, but it reduces the cash you have available for saving, investing, or buying other things.

The investment property is costing me around 300 per month .This gives me a loss on my investment which I will offset against c gains tax.

CGT is applied to the appreciation of the property value (less certain maintenance expenses). You can't deduct rental "losses" of the type you describe. (Think about it - if that was the case, there would be an incentive to maximise the monthly mortgage payment to creat a "loss".)


I have made about 110,000 on the property at the mo.

You haven't made a penny until you actuall sell. At the mo, it's costing you money as your rental income is less than the interest on the loan.

I do feel that prices while steady at the moment ,will still increase at a slow rate.

Speculation at best. It is possible for property prices to actually fall. Irish property prices, as a multiple of average income, are far higher at the moment than they have been historically.

I don’t want to go through life not enjoying the good things..

Fair enough. But some of the best things in life are free. ;)

In 3 months time cc will be gone and will still have 25,000 in shares.

Share prices can fall too. :) But keep paying off that cc.
 

ClubMan

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As for the car ,well i could be dead tomorrow .I dont really worrie about money and do belive in living for today but also look after the future. MY post as i stated above was just a rant about how expensive ireland has got.There are a lot worse off so i am thankfull for what i have got.
Cheers
Ray
Since you're patently not genuinely looking for assistance I'm closing this thread to avoid wasting any more contributors' time.
 
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