I personally would not invest the cash (€40) in another property, simply because you do not need to
There is a conflict of interest I run property investment courses
But if you wanted to make a further investment in property I would sooner go the route of refinancing the existing property to come up with a deposit on another
Or
As an another alternative, have you considered selling the existing property and then re-investing
Capital appreciation means nothing until you sell and you should sell someday
Has the property topped out compared to others which would obtain the same return
I know the entry costs to purchasing properties is the worst part of it but it al depends on the retune you are getting on the €400k property
CGT and stamp duty may cripple the idea but consider it
In relation to investing in equities and the required return you are right that banks are willing to lend for you to invest in property rather than equities and this makes the returns much greater as you are investing much larger amounts
I am not particularly fond of equities so I will leave it at that
If you think of the €40k being paid of your mortgage as reducing it by 5 or 6 years then maybe the return (3.25% mortgage interest saving) does not seem so bad
I would not dream of paying it off the investment property, you get tax relief for the interest ion investment properties and only get a reduced amount on your PPR
I probably have given you more questions than answers
Stu
stuart@buyingtolet.ie