ThirstyLizard
Registered User
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- 30
Sorry, the monthly take home is our total after tax income (self-employed + rental income) combined.You say gross income 14k, monthly take home pay 3.8k - is this correct?
Cash of €170k
Defined Contribution pension fund: €10k
Company shares : 0
Buy to Let Property x2 worth €600k (€300k each) with no mortgages.
Yes, all income is split 50/50 and we are separately assessed.Are you distributing your income among both of you equally?
If one spouse has all the income, you have €45,800 at 20%
If the other spouse has at least €27,800 of income in their own name, you get €73,600 at 20%
Brendan
Apologies to all the normally excellent posters I am about to insult.
The OP has received hopeless advice here, among the worst I have seen on AAM.
No one has asked the first question. How much Capital Gains Tax would be payable on the sale of each investment property. Without knowing that no meaningful comment can be made.
I feel like I'd have trouble pulling the trigger on any equity investments tbh, whether that was an ETF, investment trust, individual stocks or combination of same.how would you go about deciding what stocks to purchase. I think holding for the longterm and not going into an ETF (41% tax every 8 years) is a good strategy especially if you are thinking of leaving the shares in your Estate. However what 10? stocks would you purchase?
CGT bill would be around €12k for either property.
If you think that's bad recall Irish house prices fell 50% 2007-2012 and still haven't recovered.We are pretty risk averse by nature and having seen the markets pull back over the past few months is scary.
Given your low income outside rent, you are very vulnerable to your tenant not paying the rent. That is another reason for having liquid assets such as shares.
So, sell one property and invest the proceeds and the €170k cash in a diverse portfolio of shares.
Higher yield usually means higher risk.Return €54k. That is 9.3% before tax.
While there are no guarantees in life, that return is very secure.
It's not at all an apples-to-apples comparison. The value of your house will not increase due to share buybacks the way an equity portfolio will!Diversifying away from an asset yielding 9.3% to an asset yielding 1.69% (S&P dividend yield at present) needs a fairly strong justification imho.
I would say that selling one property would leave the OP much more vulnerable if they had a tenant not paying rent. With all their rental income gone they would have to eat into their capital pretty rapidly.
With two properties they are highly unlikely to have both with non-paying tenants.
they would have to eat into their capital pretty rapidly.
9% yield is more likely to be apartments outside of Dublin or rural houses. Your tenants are more likely to be delinquent and voids between rentals higher.
You' ve misinterpreted my post if you think I am under that misconception.This is a common misconception to discriminate between income and capital.
Which would you prefer
A) A company which pays no dividends but whose share price grows at 10% a year
or
B) A company which pays 5% a year dividend, but whose share price does not grow?
You should prefer A) and feel quite happy to sell some of the shares when you need "income".
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