How do u get liquidity from it ?
You get liquidity from it by remortgaging.
This does not make any sense. Liquidity is an economic measure of how easy it is to convert an asset to cash. You are talking about extacting cash (not liquidity) through remortaging. Property is highly illiquid as it is difficult to sell versus selling say equities by the click of a button or a phone call.
It's more than just a theory - I have a number of blue chip residences (5)in 3 different cities. Dublin,London,new york.
That said - for me it's only at the beginning of the wole process (1st one bought 3 yeras ago). - So only time will tell.
The whole argument and discussion has definately fallen apart at this stage. You have bought 5 properties overy the last 3 years at a time when interest rates have been increasing from a long term minimum. You have thus paid a speculative premium for them. The speculative premium you paid is much greater than the rent premium you will get. New York and London are considered top places to own because of their significane as financials centers, Dublin is not.
As for the person who said my logic is flawed by saying over the longterm property prices will rise,can you provide me with examples please.Japan does spring to mind,as does Berlin, but these are very much tehe exceptions and if u buy in a number of countries u spread that risk.
As I said - no investment is guaranteed but as risks go,property pretty much always increases in price over say,a 10 year period or more.
I said your logic was flawed because longterm property prices track wage inflation. I did not say "longterm property prices will rise". Maybe you meant "will not rise" which again I did not say. Property is a low capital appreciation asset.
Also - remortgaging is tax free.
I hear this all the time. I think the banks must have started this one.Yes it's tax free, but you have to pay interest on the money you borrow through remortgaging (and in Ireland at least you can't write the extra borrowings off against interest unless you use it to buy another property). Unless you're remortgaging to put into an asset class with higher returns and thus greatly compounding your gains this isn't an argument. You're just substituting paying interest for paying tax. See how much interest you'll pay over 30 years on 100k (versus 20% CGT in Ireland anyway). See below for the risk side of this.
Also - as for the poster who said what happens if interest rates rise an the banks won't leave u remortgage and you the have to sell with possible negative equity?
Obviously this is the situation u wanna avoid. This is the risk involved. Faced with this is bad news.
But - if you buy in great locations you should always be able to rent it out at a premium - ALso perhaps go into fixed rate loans for the first few years. That way u know what your costs will be.
ANd yes - I do want to reiterate that I know there is risk.
But whar I am saying is that by using the above approach you minimise that risk abd greatly stack things in ur favour as much as possible.[/quote]
This is very very very false. If you remortgage you are levereging. Thus you are actually increasing your risk. Leverging and putting money elsewhere does not change this, especially when you're putting that money into riskier assets.
Long term property has been considered a solid asset class with low gains. Globally, property prices increased speculatively over a 10 year period as if they were commodoties or tech stocks. Right now, this removes them from being a solid asset class and makes them the same as any other asset class. They have the potential to drop considerably in price over coming years.
I don't think you will have built up much if any equity in the properties you talk about so I don't see how you can remortgage anyway.
I don't believe you would have posted here unless you were worried about the position you have built up. You seem to be looking for confirmation that buying 5 residences in 3 different countries over a 3 year period was a great idea. Your terminology and thinking indicates to me that you bought based on belief rather than fundamentals such as yield. I think you have exposed yourself to considerably risk. I fear for you and hope you have the cashflow to cover the shortfall between your mortgage repayments and the rental income these places generate. Otherwise you are in serious trouble.
You've bought in 3 different cities. While this reduces your risk from a localized price crash it adds to the costs of renting (as you can't do it yourself) and tax returns etc. Dublin, London, New York. You must have paid an absolute fortune for these places.
I'm afraid your theories are really just belief and not based on any kind of sound economic or investment principal.