. Wouldn't take much to tip it into negative territory be it a change in tenants or a large one off expense.
another poster on here had that dilemma and went to the tenants and asked them to suggest a rent increase ! And it worked to mutually satisfaction of both parties.
Forget about repayments and capital repayments and the 20 year horizon. You should judge all these on an annual basis.
The investor has a very valuable, free, one way bet on future capital appreciation.
If property rises 5% next year the OP will make €260,000 by 5% = €13,000
If the OP follows your advice and invests €40,000 in a pension and that goes up by 5% the op will make €40,000 by 5% = €2,000.
Leverage certainly increases an investor's exposure to a given market. As such, it magnifies potential gains and, equally, potential losses.
It is currently possible to gain leveraged exposure to equities, through CFDs, leveraged ETFs, etc., at historically low rates and yet you rarely hear people advocating this approach to investing in this asset class. Leveraged property plays seem to hold a particular fascination for some people that always struck me as odd.
Non-deductible funding at 3% is a lot different to deductible funding at (say) 0.5% (which I have).
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