Ideas please!

D

Daisychain

Guest
Hi All

Just wondering where to go from here....

I am in a very lucky situation having bought property at the right time & having a good job.
Have a house with outstanding mortgage of €80k, current value about €230k. This property is currently rented out for €1000 per month which covers mortgage & interest (tracker of 1.9%).
Currently living in rented accomodation at €900 per month.
Savings of €100k in various fixed term deposit accounts ranging from 2.5% to 3.5%
Age 33 with no dependents
Have a good pension plan & making AVCs too.
Life assurance of 4*salary
In secure job for next 2-3 years at least, earning €90k per annum.
Would prefer not to be wasting money on rent but not sure what is the best thing to do. Would consider buying another property to live in but would also consider some short-term investments. Would like to hear some of your suggestions please. Thanks in advance.
 
Honestly Daisychain I don't think rent is wasted money. In some circumstances it can be a good option. Personally if I was you I would keep renting rather than tie yourself up in 2 properties and save all the cash you can to add to your 100k. You have been very sensible to date and you should seriously consider if owning a 2nd property is a good plan. If you are happy to rent then you should perhaps keep doing so.
 
Fair play Daisychain, you are in a great position, I would stay renting for now, you are in no rush.
carpin taxt I have an investment on a tracker too, it was my own home and I moved out, informed the bank and they said it would not change the rate that I would stay on the tracker - pc7 a happy bunny!
 
Hi Carpin taxt. Like pc7, I also lived in the property for some time and did not purchase it as an investment property, hence the tracker. Thanks
 
I wouldnt buy another house,

I would make sure that the 100K is spreadout in multiple accounts and try get as much interest on it as possible

I'm not sure why you rent for 900 and then rent other at 1000.... Are you paying tax on the 1000?..only the interest and maintenance being tax deductible
 
I would vote for not buying another house at least until the prices hit the bottom. I imagine a really nice home or apartment that is energy efficient with a fantastic kitchen would be great to have, not as an investment but just as a base, so maybe look for the house of your dreams when prices hit bottom. As regards investments - how about the 3-year Savings Bonds sold by An Post (not the National Solidarity Bond); a relation of mine put in 40000 to them recently and is happy about it.
 
Daisychain said:
In secure job for next 2-3 years at least
Click to expand...

Hi Daisychain. I wouldn't buy again now for the following reasons:

- The comment above would lead me to believe that the medium term is uncertain. If that is the case I would not tie up cash in another house and have debt to worry about.
- Renting is not dead money. It can let you reside in an area where you would otherwise not be able to afford. Enjoy that freedom (especially when single ;))
- If you are looking at investments then you already have property. Why not diversif? I would look to hold a good deal in cash. Perhaps look at some fixed rates but also keep a substantial portion in an on- demand or 7 day demand account.
There are plenty of capital secure bonds out there you could consider. If you have the stomach for it it is worth considering some of the absolute return bonds. I'm not saying they are to everyone's taste but could play a small part in your portfolio. Best to talk to a financial advisor about them.
 
Thanks all.
I think its time that I met with a Financial Advisor and educate myself on Bonds!

Chlipps, yes I am paying tax on my property but I did not rent out my house to make money. It was more a lifestyle change.
 
Hi OP

You are young, you have great job which is secure for next 2-3 years at least.
You have less than 1 time annum salary in mortgage.

I'd say, take half of the saving offshore, to emerging markets and invest in more risky assets like: funds which are investing in stocks. Asia (China, Singapore), Eastern Europe (Poland).
They went through crisis very well, keeping PKB growth and they will be growing faster than old Europe in comming years.

Invest for 3-5 years in there, follow the news on economy in area where you're investing and check the status of investment itself once every week or two.

Last year return on some investing funds in Poland was around 100%.
If you were buying stock yourself it was really easy to earn 2-3 times that.

Rest put in bonds, just stay away from US$ just in case.

Just an idea to consider, based on info you gave in your post. Maybe talk about this with your advisor as well.
 
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