we very fortunately have an option to buy an apartment for reduced rate (400K, worth about 550K/600K) and rent it out for 2500 minimum a month.
we very fortunately have an option to buy an apartment for reduced rate (400K, worth about 550K/600K)
Your pensions seem extremely low for your age and income. The rest of your asset position is really good but it is all in Irish property!Do you have a pension scheme?
I did in previous roles but not now. I have a pension fund of 150K E.
Wife has a 50K pension and pays a bit in each month that her company also match.
It's not going to be much, but worth getting a fixed rate at 2.x% with your current provider. There is no reason to be on variable long term.Mortgage on home
E50,000
Mortgage provider:
Type of mortgage: Tracker, interest only, fixed rate
Variable
Interest rate
4%
This jumped out at me. What are you going to do? You are leaving good jobs that have provided you with a good standard of living. What are you going to live on? If you start your own business, do you need capital to get started or can you start the business for next to nothing? How long will it take before you are able to take an income from it? Or if you work part time, will it be in the industry you are in or do you mean something like a shop?We would both be keen to leave our current well paid jobs and either start a small business and/or work part time to supplement the move. It's very much a lifestyle move that we're teasing out.
Yes but you would still be heavily in on Irish property. Two reasons which this is a bad idea:So the investment property we buy would also intend on being our pension and we would also look to top up our existing pensions etc as we can going forward.
I presume this is the €250k 3 bed semi. You haven't mentioned if it is rented (assume it is) and how much rent it generates. But two things to keep in mind:moving to our mortgage free property
I'm making a lot of assumptions here but it must be a family member (parent) willing to sell it to you at this discount. If that is true, then it is an unnecessarily convoluted way of giving you a gift of €200k. They should sell it and give you a cash gift if that is what they are really trying to do.option to buy an apartment for reduced rate (400K, worth about 550K/600K) and rent it out for 2500 minimum a month
We would intend on investing the 300K (pensions and investing) so we can hopefully grow it to a point to buy another investment property in 10ish years.
So the investment property we buy would also intend on being our pension
I presume this is the €250k 3 bed semi. You haven't mentioned if it is rented (assume it is) and how much rent it generates. But two things to keep in mind:
1. If the gross rental yield is good on this property, you should be keeping it and looking to buy another more suitable property as your new PPR
2. With an income of €190k and 2 small kids, I think you will quickly regret moving into a 3 bed semi. Location is obviously a factor in your current PPR's value but you must be living in a larger more comfortable house than the €250k 3 bed semi.
I'm making a lot of assumptions here but it must be a family member (parent) willing to sell it to you at this discount. If that is true, then it is an unnecessarily convoluted way of giving you a gift of €200k. They should sell it and give you a cash gift if that is what they are really trying to do.
Think of it this way, if they sold it for €600k and gave you a cash gift of €200k, there is no way that you would buy this type property as a rental with gross rent of 5%.
If you sell your PPR (€700k net), receive a €200k gift and keep your existing rental, you now have €900k to buy a more appropriate PPR in the area you want to move to and buy another lower value rental similar to your current 3 bed semi.
I think you may have an unhealthy bias towards property because of the growth in value of your own properties and possibly seeing others (eg. parents) do well also. But that was mostly luck in the last 20/30 years in that some got in at the right time or got exceptionally lucky with a combination of poor lending practices and cheap trackers.
You should try to break away from this line of thinking and use your pension as your pension. You are in a healthy position financially so you need to spread your wealth (mainly into pension). You shouldn't put all your eggs in the Irish property market
Ah sorry, my bad. I am so used to reading 3 bed semi that I misread your original post. In that case, it is a suitable property for you and it wouldn't be a good rental at €1-1.2k rent so if it suits your lifestyle then yes you should use this property as your PPRthe 3 bed we would move to isn't a semi, it's a detached 2 story house on couple acres of land
I understand the logic and why people think like this but if your kids were 18/19 today, would you buy them a €600k property to live in? Probably not. Even in Dublin you could do a lot better than that and still be connected to public transport for universities etc. And then there is a very real possibility that your children want to go to university outside Dublin.The main goal of the purchase alongside an income obviously would be to ensure there's an asset there for the kids in the future if they go to University etc.
Including the gift inflates your return artificially. If you have €400k cash and a €200k cash gift, you would not buy this property as a rental investment at 5% gross yield. Even though I think it is the wrong approach, the only reason to buy this property is because it is the only way to get the gift or the current owner wants to "keep it in the family".The rental yield with discounted/gift included price for us would be 6% which I thought was decent
@Ronaldo9 I think Steven’s questions here are critical for you to answer before deciding what to do with your spare funds.If you start your own business, do you need capital to get started or can you start the business for next to nothing? How long will it take before you are able to take an income from it?
I would in this situation 110% agree with Steven here.There's a lot more to be thought through on this one...
We allocate our money (mortgage, bills, investing, saving) and spend the rest.
yes, our pensions have been underfunded, it's so hard to do it all.
For a couple on €190k you don't seem to have much to show for it I do note that you've a house worth €750k and only €50k of a mortgage and a second property worth €250k presumably mortgage free, is this where all the excess income has gone??I'd be amazed if 4,000 Euro net a month wouldn't be enough though. Cost of living is lower where we'd move to also.
We are considering selling our primary residence in south Dublin, clearing our mortgage and moving to our mortgage free property for a lifestyle change in the next 18 months (before kids start school).
Plan would be to buy a 2 or 3 bed apartment in South Dublin as a rental and for the kids to use if/when they go to uni in Dublin, we very fortunately have an option to buy an apartment for reduced rate (400K, worth about 550K/600K) and rent it out for 2500 minimum a month.
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