This is good advice. If you could get a 3 bedroom place, rent out 2 rooms(tax free) you'd be paying down an asset you could sell(or rent) at retirement. With interest rates so low on mortgages, it's the next best investment you could make after your pension.It looks like you are doing all the rights things in terms of maximising your pension contributions but continuing to rent in your circumstances seems unwise.
Say you took out a mortgage of €200k at a rate of 2.2%. Your annual interest payments would be roughly half what you are currently paying in rent.
When you want to move back to the UK, you could sell your PPR with no CGT and use the equity to buy in the UK.
It is very difficult to retire comfortably if you don’t own your own home so that’s where I think you should focus your attention.
If you're paying €800 for rent at that moment, and you get a place that has 2 other rooms that could be rented at this price, that's €2400/month. If that was your mortgage over 20 years you could get some place at a price of €450,000.This is good advice. If you could get a 3 bedroom place, rent out 2 rooms(tax free) you'd be paying down an asset you could sell(or rent) at retirement. With interest rates so low on mortgages, it's the next best investment you could make after your pension.
Isn't it the greater of 1.5 x final salary (or some average over the last few years) or 25% tax free?Maxing out your pension is a good idea, but you will only draw down 1.5 x your salary as a lump sum on retirement.
Is concentrating so much of the overall net worth in domestic property necessarily a good idea from a risk perspective?To safeguard against house inflation the idea of purchasing a house in Dublin and doing the rent a room scheme sounds pretty cost neutral to me.
PPR?By the time you reach retirement age you can sell the ppp
He's 48 and will presumably retire at 66 or so.Buying property over a short timeframe is not wothout it's risk. You also need to factor in the extra upkeep, buying and selling costs, property tax and hassle of being a LL. The OP has not indicated how long they are going to stay in Ireland for anyway.
There could be bumps on the road but you'd struggle to find an 18-year window over which Irish property wasn't a good investment.
Yes, but how much rent have you not had to pay over that 17-year period?I bought property in 2005, so over a 17 year period I have (so far) gained about a 10% return pre tax but if I accounted for expenses it would probably be a good bit lower. That wasn't very good
That is highly unlikely unless the owners failed to make their scheduled mortgage re-payments or had interest-only mortgages with a high LTV.There are still properties in my estate that are in negative equity since purchased in 2007
Correct, I should have said "worth less than what they paid for it", as opposed to negative equity.That is highly unlikely unless the owners failed to make their scheduled mortgage re-payments or had interest-only mortgages with a high LTV.
Yes, but how much rent have you not had to pay over that 17-year period?
The important thing to compare is the interest payments on the mortgage with the rent you would otherwise have paid on the same property.
But even in that scenario rental income should be factored into assessment of investmentI was referring to buying property as an investment for rental, as opposed to a PPR.
The gain would be double if you'd bought 18 years ago in 2004 thoughbought property in 2005, so over a 17 year period I have (so far) gained about a 10% return pre tax but if I accounted for expenses it would probably be a good bit lower. That wasn't very good
The gain would be double if you'd bought 18 years ago in 2004 though
It is if you are making an annual profit from the rental income over that period.But a 20% gain over a 18 year period is hardly considered "good investment"?
I was a little vague it's true.But a 20% gain over a 18 year period is hardly considered "good investment"?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?