Hi all,
Long time follower of AAM here and have found the information really useful over the years, thank you...
I now have a direct query pertaining to an investment I am considering.
Background
Employed sal €93k
Wife home maker
3 kids 13, 9, 6
Own home no mortgage no other debts
Current investments
Hse 1 Bought for €96k in '16 mortgage of 15 Yrs for €55.5k Rent €11k/yr
Hse 2 Bought for €111 in '16 mortgage of 15 Yrs for €55.5k Rent €11k/yr
Savings €130k
Life cover €237k dual lives convertible
Serious Illness Cover €70k
Pension Fund currently €225k. Currently putting in max 25% salary via AVC Company contribute 6%.
Looking at the following
Hse 3 Purchase for €130k mortgage of 20yrs Yrs for €91k Rent €11k/yr
Apt 2bed purchase for €95k mortgage of 20yrs for €66k Rent of €6k 90% Section 23 relief available.
Is this a sound investment or is Hse 1&2 enough of property assets?
Any advice would be most appreciated.
Rgds
Atport1
@galway_blow_in I'm surprised. you're playing it too safe if you're not getting yields like that!those are impressive yields , where can a house costing as little as 130 k and delivering a rent of 11 k per annum be bought right now ?
invest in the stock market as a way of diversifying
GBI
The main reason one diversifies is to reduce risk.
Borrowing money to invest in the stock market increases risk.
Brendan
@galway_blow_in I'm surprised. you're playing it too safe if you're not getting yields like that!
All about risk.
I can point you towards regional towns where you could achieve an 18% gross yield on apartments.
pm sent.can you really though ?, i have friends in the property sector and even you buy an apartment for 40 k in somewhere like ballinasloe , you wont get 18% unless im completely behind on where rents are in places like that
does the fact that the OP has such a high income not slightly change this principal ?
Current investments
Hse 1 Bought for €96k in '16 mortgage of 15 Yrs for €55.5k Rent €11k/yr
Hse 2 Bought for €111 in '16 mortgage of 15 Yrs for €55.5k Rent €11k/yr
Looking at the following
Hse 3 Purchase for €130k mortgage of 20yrs Yrs for €91k Rent €11k/yr
Apt 2bed purchase for €95k mortgage of 20yrs for €66k Rent of €6k 90% Section 23 relief available.
Is this a sound investment or is Hse 1&2 enough of property assets?
those are impressive yields , where can a house costing as little as 130 k and delivering a rent of 11 k per annum be bought right now ?
Well for a rent of €11k you paid, first €96k, then €111k, and now you are looking at €130k. Prices have not risen that much since 2016. The only real mistake in property investment is paying too much.
Here, in your part of the world.
http://www.daft.ie/galway/houses-fo...-habhain-ballygaddy-road-tuam-galway-1507153/
And that is with 2 minutes searching.
But that is not the source of risk in this case? These investments are small in relation to his total assets and he can repay them in full at any time.
If any of the following go wrong, then borrowing will make the losses worse:
As it happens, in this case, the OP will be able to handle these bad outcomes comfortably, but borrowing does increase the risk and it seems to me that he does not need to do so.
- A sustained fall in value of the property
- An increase in interest rates
- A fall in rent
- A bad tenant who refuses to pay rent
Brendan
houses in dublin alone are up 20% since then as my sister has been looking for that long in D 6 , limerick city is up more than 20% in that period of time
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