Shares or buy a rental

R

robert moon

Registered User
Messages
18
Hi Folks ,

I have enough money invested in a diversified
share portfolio to buy a lovely 2 bed apartment with a rent of €2500pm.
Should I sell my shares and buy the apartment ?
I am blessed to have enough in my pension
I am 66 years old
I would seriously appreciate your help
Robert
 
There is a very simple question to ask yourself here first, do you want to be a landlord with all the hassle that brings at the age of 66 or do you want to sit back and take a passive income instead?.

Once you know what you are comfortable with, not just now but in 10 years time perhaps, then you should look at the cold hard numbers.
 
Peanuts20 said:
Once you know what you are comfortable with, not just now but in 10 years time perhaps
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I would agree with that. My parents have a couple of properties (my father is now in his 80s) and their advancing age has started to seriously worry me.
 
Maybe the OP would be more interested to know if it matters to your parents?

A landlord can pay an agent to manage their rental property removing much of the hassle. However there are still several risks in property investment which I think makes the idea questionable.

E.g: PRTB rights of tenants, rent pressure zone restrictions that limit rent increases to below real inflation, increasing service charges and endless costs to fix this and replace that which can be only partially offset against rental income.

It probably wouldn't be an optimum use of money but if the OP has a sizeable secure pension then I suppose either way he won't be left destitute.
 
CharlieMac said:
Maybe the OP would be more interested to know if it matters to your parents?
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I think it's addressed to me. My parents are fine with the situation as one of the properties currently requires little attention. But I personally am concerned as their health situation could change at anytime as well as their household. At this stage, I start wondering how one alone, getting older, even losing full capacity would manage. I am not talking only about the rentals (as they don't need the income) but the management of the properties, rented or even empty.
 
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DannyBoyD said:
I think we'd need a lot more information before offering an opinion, never mind actual useful advice.
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I agree. In my opinion questions like this are best answered in the context of a Money Makeover.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com
 
There are a number of serious disadvantages in moving from a diversified share portfolio to a single Rental property
  • You're no longer diversified
  • Landlord duties
  • Possibility of Nightmare tenants - if they stop paying it can take months to get them out
  • You're no longer liquid - you can't sell off a few bricks and a window to finance your trip to Vegas
  • You have to pay for upkeep - Maintenance, Property Taxes, RTB fees, Management fees, Agent Fees (if your not doing it yourself)
  • A lot of anti landlord sentiment in Ireland
  • Rent controls in many parts of the country
  • Rental income is taxed as income (which may be higher than Capital Gains tax)

I think a rental property only makes sense if you are using a mortgage to buy it and can write off the interest.
 
Well if you pay income tax at 40% then you still have to pay 60% of the mortgage interest yourself I think?

Would be interesting to know what does the OP find so appealing about buying property. People often get notions about property and find it impossible to keep emotions out of it.
 
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Sorry about the late reply and thank you for your contributions.

I was a full time landlord but I lost everything in the crash.
Thankfully after reinventing myself I have recovered financially.
The truth is The Donald scares the living daylights out of me. I lost 20% of the value of my portfolio on the day he announced his tariffs.
I feel much safer investing in property and I
believe if you have no borrowings very little
can go wrong.
I vet my tenants forensically and I have never
had a bad experience.
I must admit though I will really miss the buzz
of checking my shares regularly !!!
 
1. Stop checking your shares regularly
2. Ignore the short term activity of the market - i.e. if there is a sharp drop

Try not to rely on "feelings" - I think you're nostalgic for the time before the crash and should be a bit harsher on yourself in terms of pros and cons
 
If your pension income is already putting you in the top tax bracket I've no idea why you'd want to invest in property. It would massively reduce diversification, over half the monthly rent will be going straight to Revenue and you have the hassle of dealing with tenants. Not to mention the risk that they stop paying rent for an extended period which could coincide with a property downturn. You say you already lost everything due to the last property crash and have spent the intervening years recovering so why would you want back in!?
 
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