At current rates, you would save almost €4,000 in interest by paying off the PPR mortgage, whereas you appear to be making an after-tax profit of around €3,000 on the rental.
Beyond that you are simply speculating on house price movements.
If you assume that rents and interest rates remain the same, then the rental will gradually become less (not more) profitable over time, particularly on an after tax basis.Future rental income (and increased profit) are the main reasons I see for keeping the apartment as a long-term investment.
If you assume that rents and interest rates remain the same, then the rental will gradually become less (not more) profitable over time, particularly on an after tax basis.
My basic point is that there is no point earning a risky return on an asset when a higher return is available with less (or in the case of paying down a debt, zero) risk.
You could max out your AVCs for €350 a month and still save €150 a month. And you don’t really need to save with €30k in the bank.
I’d do that and invest all of your pension fund in the cheapest global equity fund available to you.
Where in North Dublin is it and is the owners management company in okay shape?
Sorry but I thought that was what you meant by this phrase -I wouldn't make that assumption about rents and interest rates.
The only reason to accept a risky current return of ~€3,000 over a risk-free return of ~€4,000 is because you expect the capital value of the property to increase over your holding period. That's called speculation.If there is no significant increase in interest rates or decrease in rents
Well, you must be making a profit or you wouldn't have an income tax bill. The rental may well be cash flow negative - because you are paying down the principal outstanding on the mortgage - but that doesn't mean it isn't profitable.Currently I am not making any profit on the apartment due to mgt Fees and other costs. I am paying down roughly 5K a year on the investment property.
The only reason to accept a risky current return of ~€3,000 over a risk-free return of ~€4,000 is because you expect the capital value of the property to increase over your holding period. That's called speculation.
That's really my key point.If I were to pay off the mortgage I could be saving myself the interest on the mortgage 30-50k depending on future mortgage .
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