# 4 properties - no other assets



## elainem (19 Jul 2006)

I have two properties in D4 worth in total 2.6mil. Both rented out, earing E3,600 per month. I own my own home in midlands worth 320K, a house in Waterford worth 450K, rental 800 per month and a S. 23 worth 190 with mortgage of 170,000.

I am a single parent of two small children. I work part-time, but only minimal pension, and have been at home for 3 years.  No propsect of going back to work until children are older, maybe another three to four years.

Currently live on rental income and small, and reluctant maintenance from ex partner.

I find the cost of maintaing the hosue, particularly as one is a period property very costly, and very stressfull.  Has anyone any ideas on a home for this money should I liquidate, or do you think I should liquidate it.  The property was inherited.

I would appreciate any advice.


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## Brendan Burgess (20 Jul 2006)

*Re: Advice re property assets needed*

Hi Elaine

You have around €3.5m in total invested in the property market. That seems to be 100% of your assets. It is not a good idea to have all your eggs in one basket. You should definitely dispose of one property.

The best alternative for your money is the stock market. You are looking for a long term investment and you should probably buy a portfolio of shares with high dividends. This is because you don't have much taxable income and most of the dividends will be received by you tax free An alternative, would be to buy the ISEQ ETF .

I think that you should diversify your assets, irrespective of your views on the property market.  But as it happens, the current prices of property generally, and in particular in Dublin 4, suggest that there is a significant risk of a crash. People will argue for and against, and I am not predicting a crash. I am just saying that there is a significant risk of a crash. 

Property management is hard work. If you are finding the work too much, then you should sell both properties and invest the money in an easy to manage investment.

Brendan


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## therave (20 Jul 2006)

*Re: Advice re property assets needed*

if you do sell one of the properties then i think you should clear the loan on the s23 property and any other debts you have ,credit card,credit union etc.

i agree with Brendan above  but make sure you get good independent advice but i also see that you depend on income from the rental to live on.
if i was in this position i would not be too worried about the pension side as even keeping one property for sale in 40 years time will/should yield you enough to put into a pension


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## Purple (20 Jul 2006)

*Re: Advice re property assets needed*

I agree that you should sell a house but look at the one in Waterford as well. D4 will always be a desirable area and will therefore command good prices.
I'm not saying don't sell D4, I'm saying look at all the options.
Do bear in mind that your return on equity on the D4 properties is less than 2% and that doesn’t take into account costs. Selling them and putting the money in the bank (but not any bank) would give you a better return.


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## SidTheDweeb (20 Jul 2006)

*Re: Advice re property assets needed*



			
				elainem said:
			
		

> I have two properties in D4 worth in total 2.6mil. Both rented out, earing E3,600 per month. I own my own home in midlands worth 320K, a house in Waterford worth 450K, rental 800 per month and a S. 23 worth 190 with mortgage of 170,000.



You actually *own *(no mortgage), 2 D4 properties, 1 PPR midlands, 1 Waterford?


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## elainem (20 Jul 2006)

*Re: Advice re property assets needed*

Hi! Yes, I actually own these properties without a mortgage, as I said they were inherited. The one in D4 was my family home for a few years until my mother died.  She built a mews house in the garden - that's how come there are two Dublin 4 properties.

Thanks everyone for your advice.  I really appreciate it. I agree there is a lost of risk with being so heavily invested in property.  One of the houses in D4 needs a new kitchen and damp coursing at the rear of the house before it will be let next time.  As it is a top of the range house for letting I am facing about 60k for damp proofing, painiting the entire house and a new top of the range kitechen.

I feel the expenses associated with the houses, particularly the period property are very high.  The only thing that is putting me off selling these properties is that I will have to pay a huge capital gain on them, as the period house in Dublin 4 has not been my primary residence since 2002 when it was worth about 800k.

My other thought was to sell the properties in D4 (both on the same Deed) and buy newer and smaller houses or appartments to rent out in Dublin, and then to invest the remainder of the money about 500k.

Any advice on this strategy would be appreciated.


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## beattie (20 Jul 2006)

*Re: Advice re property assets needed*

I would dispose of the properties and follow the advice of Brendan but then I am bearish with regards to property in Ireland. The yield you are receiving is quite poor and could be greatly enhanced by diversifying your investments. The difficulty is where to put your money if you did sell. The stock market is quite hairy at the moment.


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## markowitzman (21 Jul 2006)

*Re: Advice re property assets needed*

I like hairy stockmarkets.......good time to buy!
seriously you need top notch financial advisor and get on the private banking scene along with tax specialist etc etc


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## lukegriffen (21 Jul 2006)

*Re: Advice re property assets needed*

Assets worth €3 mi & the word 'stressful' should not be in the same post.
Do something. Donate the 'stressful' house to Focus Ireland. I think they'd be happy to look after it.


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## JohnBoy (21 Jul 2006)

*Re: Advice re property assets needed*

you are in a position to live quite comfortably off existing assets - I am envious. You need a good financial advisor to guide you through this process. Reducing your property exposure sounds prudent and your advisor ought to guide your towards other asset classes in order to provide you with some diversification.

I agree with beattie - whilst property has served you well so far, Irish rental yields are not attractive enough to warrant further pruchases (even if the property were mortgage free)

You do mention an ex-partner. I take it that the properties are in your name and that they have no claims.


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## Brendan Burgess (21 Jul 2006)

*Re: Advice re property assets needed*

elaineM

A local auctioneer has told me that there is a bizarre feature in Dublin 4 property prices now in that houses needing refurbishment are getting ridiculous prices from builders, so it's probably just perfect to sell.

I think you should bite the CGT bullet now. CGT is unlikely to fall and it could rise. You will pay 20% of the adjusted gain. Have you done the calculation? The value of the house in 2002 is irrelevant. It will be the gain from when you acquired it and it will be apportioned over the period during which it was not your PPR. 

I think that the ideas you are geting here are excellent, and I don't see the need for a professional adviser who will represent only one point of view. 

Brendan


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## runner (21 Jul 2006)

*Re: Advice re property assets needed*

Have you had these d4 properties values at 2.6M?
Seems incredibly low for the area.
Certainly sell now, eevn if prices go up you still will have sufficient cash to make alternative investments with more access to cash as and when needed. Also agree with Brendan re state of property having little affect on price, as it seems lots of buyers want to have 'their' home.


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## F. Kruger (21 Jul 2006)

*Re: Advice re property assets needed*

elainem,

You haven't disclosed how risk averse you are but, a professional advisor would probably tell you to start some diversification as soon as possible. Whether that is equities, deposits, bonds, syndicated or direct commerical property will be up to you. They would probably even advise you to invest in another 'stable' jurisdiction on the property side.

As it stands, 100% in Residential Property in Ireland looks very risky but a more diversified portfolio would appear a better option. It is hard to make this decision as your existing strategy has served you well, at least for capital appreciation, but I think that your assets are not 'working' for you.


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## elainem (21 Jul 2006)

*Re: Advice re property assets needed*

Hi! Keuger, Bendan and John Boys.

Thanks for all the advice.  I am wary of financial advisers.  In relation to being risk adverse - I am almost completely risk averse - I have two children under 5 -and a long way to go in terms of supporting them and getting them through college.  Father very reluctant about financial obligations so I can't count on this indefinitely.  I'm a nurse and unlikley to go back to work full-time until they are a few years older.

I inherited the two D4 properties in 2001.  Their total values were 500k and 250k (Irish Pounds).  I lived in the 500k house until June 2002. The houses are 1850sq feet and 850 sq feet respectively with off street parking for two cars.  A house on the same street with no parking and no mews recently sold for 2.2. million, so maybe my values are a bit low.  I got them both valued last year by Lisneys and they suggested 2.4 for both of them.  I'm glad to hear that houses needing refurbishment in D4 are getting good prices.  I really don't want to refurbish.  The larger house is listed and its a huge problem in terms of planning permission and price. 

Does anyone think that it would be a good idea to reinvest some of the money in say an appartment for the kids for when or if they go to college, and a house in the Dublin suburbs for myself, if I ever wanted to move back again, say when the children are in college and invest the rest of the money.  Probably about a million?

Thanks for all the advice.


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## therave (21 Jul 2006)

*Re: Advice re property assets needed*

i think you need to be careful in what you diversify into,shares are all over place and the price of oil is having a big affect on so many areas.
personally i don't see it as a bad thing that you have all your funds in property.If i had a choice i would sell the big house and keep the mews,paying the CGT and paying the legals to sort out the deed.If somebody wants the house that bad they will be willing to put up with you in the garden.
clear all of your loans with the money and maybe think about buying a house/apartment in Cork or Limerick,the kids may not go to college in Dublin.based on the money left over i would then serioulsy consider retiring for a few years until the kids were a little more self sufficent.this would also give you time to deal with your properties i needs be.. but those are my thoughts.obvioulsy the more money you make the easier you can make your life with regards to work. adn as they say in the ads the value of your investments can rise as well as fall


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## conor_mc (21 Jul 2006)

*Re: Advice re property assets needed*

I'd be careful what you diversify into also, however that doesn't mean I wouldn't diversify _out _of property. Even if you put a large sum on deposit for a year or two while the markets stabilise, it's less risky than leaving all of your eggs in the one basket(-case?) i.e. Irish property. I'm sure you could negotiate a very favourable deposit rate for a fixed term of 1-2 years if you're sticking a cool million in the bank! Besides which, you have a lifestyle change to consider also as you are obviously not enjoying the stress of being a landlord.

I'm not sure about the idea of buying an apartment for the kids. Whatever about a property bust, even estate agents see house price growth rates adjusting to ~3% next year, which is just over inflation. If you're a cynic, as I am, then you'll believe that the vested interests are over-stating the case. So while a crash may not occur, house prices look likely to fall in real terms (i.e. house price growth < inflation) at some stage between now and 2019, when your nippers head off to college. That's when you should buy an apartment for them.

Re a house for yourself, why not hang onto the mews? Are you currently renting it seperate to the main house? What is it's yield like? More importantly, would you like to live in it yourself at some point?

By the way, since you've mentioned your pension, it's obviously something you feel may need addressing. I think you should do so, if you do decide to sell some of your property portfolio, but do so in such a way as to take bets advantage of the tax treatment available.


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## JohnBoy (21 Jul 2006)

*Re: Advice re property assets needed*

selling one Dublin property to buy another does not make a huge amount of financial sense given high property transaction costs. Moreover, given current low rental yields the income from the property is not going to generate much more than a high interest bank account. the problem with Irish residential property is that if you are dependent upon the investment income - property currently represents a poor trade-off between risk and return. (your €3,600 in monthly rent represents an annual retun of just 1.7% on assets valued at €2.6m - you would get more on deposit with much less risk and hassle).

buying an appt. for the kids for 3rd level does make some sense but then what if they decide not to study in Dublin (if at all). if this is a consideration then keep the smaller of the dublin properties.

selling at least one of your properties would free up capital and allow you to cash in after one hell of a ride thanks to the Irish property market.

getting exposure to other asset classes can be done in a fairly straight forward and cost effective manner via index funds.

even by having some of your assets in cash you will have achieved a degree of diversification.


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## Purple (21 Jul 2006)

*Re: Advice re property assets needed*

If you want to stay in property you can sell the larger house and invest the money in stocks, bonds and a property fund that own property in Ireland and abroad, as well as having a commercial and residential mix. This will allow you to track the market without the high entry costs.
Considering your personal circumstances you would be mad to keep going as you are. You are asset rich and cash poor and your lifestyle does not match your worth. If for no other reason you should sell.


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## markowitzman (21 Jul 2006)

*Re: Advice re property assets needed*

i think if you are risk adverse and want to invest for income you need to outpace inflation.
Would agree with high yielding stocks for income.
My worry is that can you psychologically deal with the potential for significant volatility and losses in the stock market.
Without an advisor who can help you allocate and rebalance I sense this could be a very stressful experience for you.
Hedging your position also would be of help.
Consider commodities or covering options etc.
It would cost you damn all to get advice from a number of advisors or stockbrokers in this regard.
If you are wary of the financial advisors AAM can help with a suggested allocation or maybe someone like Eddie Hobbs could help?


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## Brendan Burgess (21 Jul 2006)

*Re: Advice re property assets needed*

Your main problem is that you are overexposed to property. Selling D4 to buy in some other area doesn't address that problem and will be costly in terms of Stamp Duty, CGT and transaction costs. 

You get tax relief on the interest paid on your mortgage, but you should  consider paying off the mortgage with any proceeds. 

Another advantage of investing in equities is that you can convert them into cash in whole or in part as you need it. 

Investing in equities fits in with a risk averse approach. The long term risk of investing in equities is very small. Putting the money on deposit has a huge risk that you will lose a substantial part of it due to inflation.

I would certainly not take advice from a stockbroker. They earn their money from encouraging you to buy shares, then sell them, then buy more. The right strategy is to buy the ISEQ ETF and forget about it. 

Brendan


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## tyoung (21 Jul 2006)

*Re: Advice re property assets needed*

Selling Irish property to buy an ISEQ tracker does not represent significant diversification. Any downturn in the property market will hit the share price of the banks which make up about 40% of the index.  I agree you need to reduce your exposure to property. High yielding stocks are a good idea as the dividends will help replace your rental income.   Given your situation I think you should put some of the proceeds in cash/Bonds. You definitely need at a minimum an emergency cash fund. You want to avoid becoming a forced seller of either property or stocks if there is a shortfall in your income.


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## markowitzman (21 Jul 2006)

*Re: Advice re property assets needed*

I would agree with you tyoung
this has been discussed before but consider eem ige vti efa gld djeurostoxx as an etf sample with maybe a hedge fund or options to protect portfolio or at least to reduce volatility and have a look at vig (dividend etf).
my only worry with etfs would be low income and I would personally avoid iseq etf in preference to djeurostoxx 
re the stockbroker.....get one on advisory only and set the record straight that you are long term buy to hold and let him know if he attempts to churn you that you will leave.
I just think with an equity portfolio of this size for the sake of a dozen or so commissions it could be worth your while going down the road of a stockbroker rather than discount broker.
This is against my gut feeling on stockbrokers but to go wading in buying stocks with a 7 figure investment at a discount broker is risky in my book unless you are experienced.
avoid at all costs discretionary approach with stockbroker.


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## beattie (21 Jul 2006)

*Re: Advice re property assets needed*



			
				Brendan said:
			
		

> I would certainly not take advice from a stockbroker. They earn their money from encouraging you to buy shares, then sell them, then buy more. The right strategy is to buy the ISEQ ETF and forget about it.
> 
> Brendan


 
Why invest in the ISEQ at all? Why not in the equivalent tracker in a country which doesn't have such an exposure to property. Germany is starting to grow again, they have gone through some painful reforms and they have world beating comanies in many industries.


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## therave (22 Jul 2006)

*Re: Advice re property assets needed*

if you are a little nervous of losing any money then stay away from the shares,they are definately not for the faint hearted.
i'm sure Mr Hobbs would be more than happy to talk to you,considering the position you are in.


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## Brendan Burgess (22 Jul 2006)

*Re: Advice re property assets needed*

I would think that moving from owning a property to owning shares is a signficant diversification, even if the outcome of both is influenced by similar factors e.g. interest rates and the Irish economy. Irish banks would prefer a soft landing for Irish property prices and a crash won't help them, but it's only a part of their portfolio and so it's an even smaller part of Elaine's overall portfolio. 

Elaine is new to this area. She is trying to grapple with some difficult issues. She is not a sophisticated investor. Talking about covered options and foreign investments will likely make the decision so complex, that she does nothing about it. 

I would guess that about 50% of the ISEQ ETF's earnings come from overseas? It's easy to understand. The tax implications are easy to understand. It's a simple choice. There might be a marginally better choice, but what is most important is that she diversifies. 

Brendan


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## markowitzman (22 Jul 2006)

*Re: Advice re property assets needed*

I wonder would there be any equity funds that would give her 102%+ allocation and could she negotiate a reduced management fee given the figures involved?


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## elainem (22 Jul 2006)

*Re: Advice re property assets needed*

Hi! everyone,

Thanks again for advice.  I'n going to sell the period property which was my private residence.  It is not in that bad a shape so I would hope to get 1.9 to 2 mil for it on its own - maybe more.  Brendan, with regard to the ISEQ EFT if I invested a large sum of money, would the dividends be likley to provide me with an adequate income for the next couple of years - I am unlikely to work outside the home again until my youngest is in 1st class in four years time.  Perhaps you could explain a little bit more about the ISEQ EFT.  I am from a family that, like most Irish people, is property mad - and I'm frequently told to buy land/property as they're not making more of it.  Any further info./explanatin re. ISEQ EFT would be appreciated.


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## Brendan Burgess (23 Jul 2006)

*Re: Advice re property assets needed*

Follow the link in my original post to the ISEQ ETF. 

I think that the income should be around 2%, so you will be getting around €40k per annum. 

Don't worry about the income not being sufficient. You will get income and capital growth. If the income is insufficient in any year, you can sell part of the fund. That is the great attraction of shares and share based investments, when you need part of them, you can access them.

Brendan


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## therave (23 Jul 2006)

*Re: Advice re property assets needed*

would leaving the cash in the bank at 2% or credit union at 2.5% not be the same as putting it in the ISEQ ETF,whith none of the risk or stress and no fees to pay ?


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## markowitzman (23 Jul 2006)

*Re: Advice re property assets needed*



> would leaving the cash in the bank at 2% or credit union at 2.5% not be the same as putting it in the ISEQ ETF,whith none of the risk or stress and no fees to pay ?


no potential for capital appreciation with deposit or credit union so in essence you are pretty much going to erode the capital via inflation by leaving money on deposit which is too risky in most investor's eyes unless a very short term time horizon.
Conventional wisdom would say only to have a few months emergency money on deposit for this reason.


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## tyoung (23 Jul 2006)

*Re: Advice re property assets needed*

If you do decide to buy the ISEQ ETF make sure you fully understand it. In particular how your dividends will be paid. They are paid on a twice yearly basis, in July and Jan.   This July slightly over 13 euro was paid. In Jan of 05 13.19 was paid. I think it is reasonable to expect an increase this year. I think you can expect a yield of about 1.8%. It is also reasonable (although not certain) to expect an increase in the dividend over time. You can see the dividends for the ISEQ ETF at the Irish Stock exchange, ise.ie.   Click on ETF market data  and then on  dividend data.
 I still think you should consider some further diversification. The ISEQ has no energy stocks, very little technology or consumer stocks.
I still think it is a good idea to keep six months living expenses in a cash account. The ISEQ could easily drop by 20% in a year. The cash would act as a cushion and help avoid being a forced seller in a down market.
 Good Luck what ever you do. You are actually in a very good spot.
Regards


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## therave (24 Jul 2006)

*Re: Advice re property assets needed*

i started reading Eddie Hobbs' latest book last night and i think you might find it interesting/informing,as a lot of what people are advising here is also explained in the book.I think it may be worth the money just so you can even familiarize yourself with the terms being used.


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## JohnBoy (24 Jul 2006)

*Re: Advice re property assets needed*

on the subJect of equity ETFs be aware that the ISEQ's dividend yield is pretty poor compared to some of the larger pan-European ETFs - in addition these are also € denominated. For example the DJ Stoxx 50 yields 3.6%; the Stoxx 600 3.5%; the MSCI Pan-Europe Index 3.5%.


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## F. Kruger (24 Jul 2006)

*Re: Advice re property assets needed*



> I am almost completely risk averse


 
elainem,

Can you live with the fluctuations of equities or is this likely to add to your existing worries?


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## Taximan (25 Jul 2006)

You are receiving some very contradictory advise you have people telling you to sell D4 properties and invest in ISEQ ETF's. What stocks dominate the ISEQ - Banks! where are banks making their money mortgages What effect will a property crash have on the Banks - very negative i.e ISEQ crash, and equities will have a far quicker correction then Prop. 

The D4 properties are like Gold, They should be the last things you sell, I would look at selling the country properties to fund refurbishment & maintaince. 

The worst advice you received is not to get financial advise by a professional. I hate the dentist but when a tooth hurts I don't tie a string around a door handle. You really should get professional advise if you are not confident take a relative or trusted friend. Go to your solicter or accountant ( ask them to accompany you to any meetings) and they will point you in the right direction. Bounce the banks off each other you are a high net worth customer let them work for their money let them come back with suggestions. i.e Asset allocation etc.

Also you definetly need tax advise on the property sales.

If you do go into equities split it between passive (index tracking) and active ( managed funds) this will lower stock selection risk. Look at fund of fund structures this will diversify asset manger risk.

Remember you are in control not them.


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## Brendan Burgess (25 Jul 2006)

elainem

The real problem going to an advisor is that you might well get very opinionated advice expressed in broad generalisations with no evidence to support those generaliations. You may also be subjected to totally inappropriate analogies which would lead you to wrong conclusions. 

You may also get advice such as fund of fund structures where the advisor gets maximum commission and you pay charges on the double. 

Brendan


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## HighFlier (25 Jul 2006)

I would agree with Brendan's earlier point that there is a significant risk of a rise in Capital gains Tax in the medium term . So a coupling of a rise in CGT along with a drop in property values ( and that is the most likely direction of both of these variables) would be a pretty serious double whammy esp. as the two most expensive properties will attract no PPR relief.

If "Bunny" Rabbite and his mates have their way (and they well might in the not too distant future) the CGT could revert to 40% or at least the euro norm of 30% plus.


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## elainem (25 Jul 2006)

Thanks, Brendan, and everyone else who replied.  I am definielty worried about a rise in CGT.  I had the properties valued yesterday, and the value  the acutioneer gave me was E3mil for both. I have estimated that I would net E2.6 mil after CGT, if the Auctioneers valuation was correct. They suggested offering the properties as one lot to see what would happen, though I would prefer to retain the mews house. I am contempalting putting the houses on the market in February.  Does anyone think this is a good time? One of the properties is still tenanted, and between repainting and getting ready for the market, I migh not be ready for late September/October.


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## beattie (26 Jul 2006)

The ECB rate could be up 0.75% by February which would make the properites less attractive to an investor as it is debatable whether there will be any corresponding increase in rents thus reducing the yield. Still as it is D4 there should be no shortage of interest.


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## JohnBoy (26 Jul 2006)

we would probably all like to live in D4 (if it were not for all the southsiders) but what is of issue here is not the address but Elainem's financial wellbeing. Irrespective of anyone's views on the futures direction of Irish property prices these D4 properties are not generating adequate income relative to their market values - remember the the gross yield on these two houses is less than 2%. Given that the renovation costs of the larger property would probably consume 2 year's worth of rental income it makes even less sense to hang on to them.


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## F. Kruger (26 Jul 2006)

Brendan said:
			
		

> elainem
> 
> The real problem going to an advisor is that you might well get very opinionated advice expressed in broad generalisations with no evidence to support those generaliations. You may also be subjected to totally inappropriate analogies which would lead you to wrong conclusions.
> 
> Brendan


 
......and the difference between that course of action and posting on an anonymous website is...?


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## liteweight (26 Jul 2006)

*Re: Advice re property assets needed*



			
				Brendan said:
			
		

> I
> Elaine is new to this area. She is trying to grapple with some difficult issues. She is not a sophisticated investor. Talking about covered options and foreign investments will likely make the decision so complex, that she does nothing about it.  Brendan



Completely agree with this. Happened to me. I may not be the sharpest tool in the box but I'm certainly no dolt either. However, when it comes to stocks and shares I find it all very confusing. The people 'in the know' seem to give too much info and even conflicting info. My brain starts to hurt and I just leave my money in the bank albeit at a good rate. I know this is foolish and I might just do as Brendan suggests. Maybe if I start at this level I can gradually learn the ins and outs of investment! 

I am actually in a similar position to Elaine although at mo don't have her cash shortfall. Considering selling 'gold' in D4. Unfortunately most properties in D4 are not gold but red brick and mortar. They are old so need constant attention in order to stop them falling into a state of disrepair. If you do not have cash to maintain them they can be a nightmare and cost a fortune.


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## ecstatic (27 Jul 2006)

Remortgage some of the D4 properties and proceed to a leveraged investment.

With that much equity you can make a significant return from property not necessarily in ireland.

Going into shares without leveraging leaves you in an unleveraged position which to be frank is stupid. 

Leverage / Gear that money into an investment.


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## RainyDay (27 Jul 2006)

ecstatic said:
			
		

> Remortgage some of the D4 properties and proceed to a leveraged investment.
> 
> With that much equity you can make a significant return from property not necessarily in ireland.
> 
> ...


Would you consider advising OP on the risk associated with a leveraged investment?


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## elainem (28 Jul 2006)

Hi! Ecstatic, I can't leverage the equity because I am dependent, almost entirely, on the rental income to live for the next couple of years. I am a stay at home mother of two children under five, and cannot see myself going back to work until the youngest is in school, in two years time, or even until he starts first class -that's why I have cash flow problems at the moment.


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## Brendan Burgess (28 Jul 2006)

Hi F Kruger

Look at the advice which follows from ecstatic. It sounds clever - it uses big words like leverage. "Gear that money into an investment". 

It is so totally inappropriate to ElaineM's circumstances. If a broker gave that advice, there would be no one to challenge it and the client would probably follow the advice.

On askaboutmoney, it is challenged immediately. 

That is the difference. I have been astonished by some of the suggestions made on Askaboutmoney. I have been equally astonished by some of the suggestions made by brokers.  They are almost always corrected on Askaboutmoney.

In this present case, ElaineM now has the benefit of many opinions. I suppose there is no right answer. But she at least has a full range to choose from. 

Brendan


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## dam099 (28 Jul 2006)

I would have to say I largely agree with the suggestions in Brendans first post, sell at least one of the properties (like others I'd suggest the bigger D4 period property as the maintenance on this one seems to be a significant issue). 

As suggested by a few others I would however also be considering looking at investing in ETF's other than just the ISEQ one especially something like the DJ Eurostoxx which is denominatated in Euros. I take Brendans point about over complicating things but I would like a little more diversification away from Ireland say 50% ISEQ ETF and 50% Euro Stoxx ETF. 

(Personally if I was lucky enough to have 2m+ to invest I'd be putting probably 60-70% between ISEQ & Eurostoxx ETF's and the balance in overseas and alternative strategy ETF's but for Elaine the simpler the better.)


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## dam099 (28 Jul 2006)

Taximan said:
			
		

> You are receiving some very contradictory advise you have people telling you to sell D4 properties and invest in ISEQ ETF's. What stocks dominate the ISEQ - Banks! where are banks making their money mortgages What effect will a property crash have on the Banks - very negative i.e ISEQ crash, and equities will have a far quicker correction then Prop.


 
Even if banks make up 40-50% of the ISEQ you are still diversifying somewhat

a) Yes the banks are exposed to Irish property but unless you believe most the Irish banks are so overexposed they will fail in the event of a property downturn (unlikely IMO) they do have other revenues and overseas operations that will cushion them from a complete collapse in share price.
b) 40-50% in companies exposed to property is still less than 100% in property, yes you could diversify even more but its still a lot better than nothing.


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## elainem (31 Jul 2006)

Hi! Everyone, thanks again for your replies.  Brendan, this might not be the thread to ask this - but if I invest in the ISEQ EFT how does this affect the children's inheritance - i.e. can my investments still be left in trust, so that my children get so much of an income each year. Also, is the inheritance tax the same (I have a S. 60 policy). Are there any advantages or disadvantages to leaving money in this way to my children.  Thanks for your help.


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