# Family home and 3 buy-to-lets - going for a PIA



## BrokeGuy (6 Sep 2013)

Hello all,

I am sure you'd love to hear my depressing story of poor finances but I will leave that be and get to the point.

I am dealing with a PIA where essentially what will happen is that I will lose 3 rentals and probably keep my own home. The three rentals are worth maybe €170k in total (yeah!) and the loans are a juicy €380k (bigger yeah!)

The mortgage on my home is €289k, it is a tracker with BOS and we are just paying interest (€700 per month). Originally it was a 25 year loan for €310k so only €20k cleared from it. Ouch.

Anyway reading all the PIA examples etc I am thinking the best I can hope for is to go into this misery PIA for 6 years, live on bread and water and walk to work etc (exagerrating a little) and in the meantime the rentals will be sold, transferred to "unsecured debt" and more or less written off. That will also apply to my credit card and other loans but luckily for me the total of them is only €2k or something.

Once the 6 years is over I will then have the luxury of starting a juicy 35 year mortgage for the house which is now worth €150k with the loan of €289k. That loan over 35 years total a repayment of €600k for a house worth €150k. Great. 

As I am on a tracker I can't avail of a lower interest rate.

Because I am 34 they will hamper me with this huge term unlike those in their 50s who will get their lovely write-offs leaving the younger generation carrying the can. That's fair!

Does anyone think I am way off on that prediction? Problem is that is seems rather pointless to me because banking on working continually for the next 35 years to pay off the mortgage is like putting €100 on Stoke to win the league - far fetched.

Is there any other option? I'd love to keep the house but I feel I am being penalised for being within an age bracket where they can increase the term of the loan and that is hard to bear given I have 3 kids and come 10 years time all 3 will be in school and require education funding etc. 

Sorry....


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## Baby blues (6 Sep 2013)

I actually don't really see your point......
All your investment properties will be written off - no effect on you, you'll then have 30 working years (most people's mortgage) in which you will pay off the home you want to stay living in..... Why should you have your debts cleared quicker than an average mortgage given unlike people in their 50's who only have a good 15 years full income in order to clear theirs. 
A tracker is a pretty low rate... You want lower? And you'll be out of the PIA by the time your kids start the big expensive of secondary school.
I think it's an unjustified moan
Perhaps I'm being a bit harsh :/


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## BrokeGuy (6 Sep 2013)

Baby blues...

Fair assessment but critical points missed; when you buy a house over 35 years you usually start of with a loan to value of 90%, like I did. Worse case you are thinking that 10 years down the road if I am sick or something the loan to value could be 75% so if I had to sell I am not crippled with debt.

In this case you would enter into a loan for 35 years with a loan to value of 192% meaning the same instance you'd still owe circa 160% in 10 years time making it seem rather pointless?


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## Baby blues (6 Sep 2013)

Perhaps move to one of your investment homes... Sell the expensive house and keep a cheaper one?


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## Importer (6 Sep 2013)

Why don't you include your PPR with the PIA, allow the PPR to be sold with your investment properties and start fresh in six years ?


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## commonsense (6 Sep 2013)

BrokeGuy said:


> Hello all,
> 
> I am sure you'd love to hear my depressing story of poor finances but I will leave that be and get to the point.
> 
> ...



You are getting 210k written off with the rentals, 2k on a CC along with other unspecified loans (or is this included in the 2k?) and are being asked to repay the existing mortgage on your home over a longer term. 

Had you continued on the PPR mortgage then you would have paid at least 450k over the term.

Forget about the value of your house, many people are in NE. In writing off so much debt you are free to start again, you have your home, the payments are manageable. 

If you are employed then at some stage your income will rise, as will house prices.

I think you are looking at the glass half empty in this situation.

As well as looking for a mortgage write -down (when you got 3), you are looking to have your NE wiped out as well.


Instead of looking at 50 somethings who get "lovely" write-offs, maybe take into consideration the other section of the population who didn't go mad, or if they did then who are still paying their mortgages on much reduced earnings - these people, who duly pay each month, are entitled to nothing.


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## Baby blues (6 Sep 2013)

Also those 50 something's have
Probably being paying mortgage for the last 20/25 years.
This isn't a get at broke guy it's a your not gonna do that badly.....
As commonsence said, glass half full.....


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## robbie00 (6 Sep 2013)

commonsense said:


> You are getting 210k written off with the rentals, 2k on a CC along with other unspecified loans (or is this included in the 2k?) and are being asked to repay the existing mortgage on your home over a longer term.
> 
> Had you continued on the PPR mortgage then you would have paid at least 450k over the term.
> 
> ...


 

Agree with everything here, you are getting a write off of over €200k. You should be happy with that as you can still keep your PPR and have a fresh start. There are people in much worse situtions were they will lose everything.


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## Aquarian (6 Sep 2013)

My husband and I decided against taking the phenomenal mortgages some years ago as we worried about having an unsustainable loan in the future. We now can't get a mortgage due to being self employed and cannot see a way out of this. We are paying 1k a month off someone else's mortgage (rental) with no hope of putting a permanent roof over our childrens' heads. So forgive my lack of sympathy....


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## Jim2007 (6 Sep 2013)

BrokeGuy said:


> Baby blues...
> 
> Fair assessment but critical points missed; when you buy a house over 35 years you usually start of with a loan to value of 90%, like I did. Worse case you are thinking that 10 years down the road if I am sick or something the loan to value could be 75% so if I had to sell I am not crippled with debt.
> 
> In this case you would enter into a loan for 35 years with a loan to value of 192% meaning the same instance you'd still owe circa 160% in 10 years time making it seem rather pointless?



Actually you are the one that is missing the point - the value of pretty much anything you invest in can go down as well as up!  There is no guarantee that your investments will always go up end of story!


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## so-crates (6 Sep 2013)

BrokeGuy said:


> Hello all,
> 
> I am sure you'd love to hear my depressing story of poor finances but I will leave that be and get to the point.
> 
> ...



You seem rather woebegone and sorry for yourself brokeguy. You need to rethink your attitude, it will do nothing but harm you if you focus on "woe is me"
1) You are healthy
2) You are in your 30's
3) You are employed
4) You are being given a fresh start
5) You have a home
6) And since you say "we" - you have the support of a relationship

Honestly - stop.
Stop kicking yourself for losing on what has turned out to be stupid gamble on property. 
Stop bewailing the fact that you have to deal with the consequences of that gamble for, possibly, six years (before the PIA legislation was in place, what would your options have been?). 
Stop assuming the worst, 


BrokeGuy said:


> That loan over 35 years total a repayment of €600k for a house worth €150k.


thinking like that means you are still betting on current values just now you see them in a negative light. What is worse is if you keep that up - you will start to hate your own home, better to include it in the PIA than do that.
Stop thinking that you are worse off, more shabbily treated, more to be pitied than other people.

Start
Looking at the positives in your life
Looking at what you can learn from this experience
Looking at what you can do and achieve in 6 years
Set yourself some goals, put your mind back into gear and start moving forward. Don't look back and tarry around might-have-beens.

And good luck. You are pioneering this new legislation, it is an incredibly frightening step but because you take it, others will have more confidence in following. Because you do it, financial stability will become more attainable for you personally and for others as they follow.


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## BrokeGuy (6 Sep 2013)

commonsense said:


> You are getting 210k written off with the rentals, 2k on a CC along with other unspecified loans (or is this included in the 2k?) and are being asked to repay the existing mortgage on your home over a longer term.
> 
> Had you continued on the PPR mortgage then you would have paid at least 450k over the term.
> 
> ...


 
I sense this is a moral "lashing" more than advice. Well I am sorry if you think I went mad, well I didn't. Two people have small properties get together and buy a house but keep the other houses = 3 houses. Hardly nuts when you got to consider that those some people don't have the jackpot pension public servants have so have to save for their own (e.g. rental income) and/or needed to buy a larger house (3 bed is all) for their 2 children.

The 4th property was excessive but the debt on that is actually only €45k.

Anyway...


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## daftpunk (6 Sep 2013)

Hi BrokeGuy,

I think you have some fair responses so far, and maybe some not to your liking. 
Has the PIP actually negotiated on your behalf yet, with your creditors, or are you presuming this will all happen?

Stoke are currently 2550/1 to win the league,for a good reason. 

Some PIPs have claimesd to have been negotiating behind the scenes with creditor in reaching deals already, thats why I'm very curious to know will you receive write-downs as described, and also keep the most expensive house out of three?

Hope things work out for you and you get a second chance in life.


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## BrokeGuy (6 Sep 2013)

Jim2007 said:


> Actually you are the one that is missing the point - the value of pretty much anything you invest in can go down as well as up! There is no guarantee that your investments will always go up end of story!


 
Thanks for the advice for an obvious novice here but all I am saying is that starting a repayment plan on a loan with a loan to value of 192% is madness. Seriously. Say it out loan, 192%.


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## daftpunk (6 Sep 2013)

Stoke are 5000/1 in ladbrokes, better again!


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## Importer (6 Sep 2013)

Go bankrupt mate.....

Heard there might be an apartment to rent in Swansea close to a pub


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## daftpunk (6 Sep 2013)

Ivan awful feeling I know what you are talking about


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## commonsense (6 Sep 2013)

BrokeGuy said:


> I sense this is a moral "lashing" more than advice. Well I am sorry if you think I went mad, well I didn't. Two people have small properties get together and buy a house but keep the other houses = 3 houses. Hardly nuts when you got to consider that those some people don't have the jackpot pension public servants have so have to save for their own (e.g. rental income) and/or needed to buy a larger house (3 bed is all) for their 2 children.
> 
> The 4th property was excessive but the debt on that is actually only €45k.
> 
> Anyway...



I'm sorry if you took it so, it certainly wasn't intended that way. I think that you have to put things into perspective and sometimes hearing a straight point of view is what is needed. 

My post related directly to the circumstances you are in now, I made no reference to how you got there. Merely to how you feel hard done by in getting the balance of 3 rental properties wiped off along with other debt.

You keep referring to the 192% loan rate - but that isn't what it is. You are basing this on the current value of your home, you are asking for the Negative Equity portion of the property to be wiped out.  Can you not see how unrealistic that sounds.

Thousand's of people are in Negative Equity. But they will not receive a write down because of this. You are young and have a future ahead of you. Yes it'll be tough for 6 years, but if the banks are taking a hit, the taxpayer is taking a hit, then don't you think it somewhat fair that you take some of the hit too?


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## Gerry Canning (6 Sep 2013)

Broke Guy; I think So-Crates and Commonsense make good points.

Knuckle down , you will be surprised how things will turn.
Some of us have been there. The difference today is there are far too many!
Your home will go up in value. Your Residual Debt will become easier. You will in time afford the Holiday.
Don,t be so fast to knock public service pensions. MOST have pensions that are POOR. We only hear about the gilded Big Boys.Again this a glib falsehood from a lazy media.
I wish you well,


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## BrokeGuy (6 Sep 2013)

daftpunk said:


> Hi BrokeGuy,
> 
> I think you have some fair responses so far, and maybe some not to your liking.
> Has the PIP actually negotiated on your behalf yet, with your creditors, or are you presuming this will all happen?
> ...


 
Daftpunk, I'd probably accept losing all properties to be honest it is just that the most expensive is the home and has been for 6/7 years and it is in the city where we both work so you'd logically hope that is the house we'd keep, if any.

I don't think banks, however bad, are keen on kicking the likes of us out especially when we could actually afford a "normal" mortgage so it isn't a pipe dream in hoping we could stay in the house.

This isn't a case, like I personally know of, with a guy owing 25m going into receivership and still living in a house which is 8,000 square feet! No lie. That person lives around 6 miles from me.


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## Baby blues (6 Sep 2013)

As I said, like others, this isn't a get at broke guy situation, sorry if you seem it is but i think when everything settles for you and if it does in they way you outline then you will realise having a house in the area you chose to begin with close to work and I presume schools is worth more than a house in an area you hate with a massive loan for neg equ investments and not being able to ever move will perhaps bring you some comfort - I genuinely hope you get a good outcome and look forward to any update that you feel you want to share in the future.


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## dub_nerd (6 Sep 2013)

BrokeGuy said:


> I sense this is a moral "lashing" more than advice. Well I am sorry if you think I went mad, well I didn't. Two people have small properties get together and buy a house but keep the other houses = 3 houses. Hardly nuts when you got to consider that those some people don't have the jackpot pension public servants have so have to save for their own (e.g. rental income) and/or needed to buy a larger house (3 bed is all) for their 2 children.
> 
> The 4th property was excessive but the debt on that is actually only €45k.
> 
> Anyway...


 
Huh? How many people have nearly €400k in a pension pot in their late twenties/early thirties (the amount you said the loans were for). If it was supposed to be a pension investment you have to realise that a) you borrowed it rather than earned it like most people investing in a pension have to do before they can invest it, b) you invested it in a single asset class in a single market, the antithesis of sensible pension investing, or any kind of investing. Sorry, but it _was_ nuts. The only reason it doesn't seem that way is because so many other people did the same nutty thing. After the Wall Street Crash it was forty years before investing your pension in the stock market stopped looking nuts (when people forgot how nuts it was).

Other people have lost money on their pensions and had to suck it up. You're getting your abysmal investment decisions written off. I'd say complaining about it is pretty rich to be honest.


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## BrokeGuy (8 Sep 2013)

Dub Nerd, many thanks for your incredible advice - so valued. Guess I am the fool here 'cos people don't use property for pensions even though a high percentage of pension funds are both directly and indirectly invested in property. Guess they are wrong too.

Remember those who lost on pensions got tax relief on the contributions so those losses have been subsidised too.

It is fine, the normal joe soap without the absolute sickening and bankrupt inducing pensions of the civil service has three options; invest in property, invest in pension or do nothing. I did the first option, it failed but it was logical at the time. Not everyone is in a situation where a teacher can retire in mid 50s with a pension essentially worth €1.5m when valued against an annuity - that is the real injustice not the normal guy who took on a second property to assist for the future years.


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## so-crates (8 Sep 2013)

BrokeGuy said:


> Dub Nerd, many thanks for your incredible advice - so valued. Guess I am the fool here 'cos people don't use property for pensions even though a high percentage of pension funds are both directly and indirectly invested in property. Guess they are wrong too.
> 
> Remember those who lost on pensions got tax relief on the contributions so those losses have been subsidised too.
> 
> It is fine, the normal joe soap without the absolute sickening and bankrupt inducing pensions of the civil service has three options; invest in property, invest in pension or do nothing. I did the first option, it failed but it was logical at the time. Not everyone is in a situation where a teacher can retire in mid 50s with a pension essentially worth €1.5m when valued against an annuity - that is the real injustice not the normal guy who took on a second property to assist for the future years.



1) Civil Servants are "normal joe soaps"
2) You didn't have a pension plan, you had an aspiration that the property you *borrowed money to buy* might one day form the basis of a secure income in retirement

You can't garner sympathy for a position predicated on bashing someone else because they have not shared your misfortune. 

You took a series of steps which resulted in you borrowing way beyond your means and are now suffering the consequences. This has nothing whatsoever to do with public sector pensions. You didn't borrow money because of public sector pensions and you have not become broke as a result of public sector pensions.

I have said it already, you have to take control of your situation and change your attitude, it is deeply unhealthy for you. Dwelling on and mulling over perceived "wrongs" will get you nowhere fast. You will simply embitter yourself.

You are being given a massive help and an enormous hand out, though from your posts I am sure you don't see it that way. Take a deep breath, and deal with the fact that despite the size of the debt forgiveness you will benefit from there is still much that you will have to handle.


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## daftpunk (8 Sep 2013)

BrokeGuy;
Have you actually received assurance the debt will be written down from your p.i.p or is this your hope?


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## Cantalia (8 Sep 2013)

Hello broke guy.
You are in the darkest hour now. On my reading no one is giving you a moral lashing. The responses seem fair and honest to me. Although you are not seeing it at the moment you are really not that bad. Ivan see light at the end of the tunnel yates for you!


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## honest (8 Sep 2013)

BrokeGuy said:


> Dub Nerd, many thanks for your incredible advice - so valued. Guess I am the fool here 'cos people don't use property for pensions even though a high percentage of pension funds are both directly and indirectly invested in property. Guess they are wrong too.
> 
> Remember those who lost on pensions got tax relief on the contributions so those losses have been subsidised too.
> 
> It is fine, the normal joe soap without the absolute sickening and bankrupt inducing pensions of the civil service has three options; invest in property, invest in pension or do nothing. I did the first option, it failed but it was logical at the time.


 
+1.  There was another option ; you could have invested in shares.  If you were patriotic, you could also have invested in the Irish stock market (instead of abroad) , where most of the blue chip plc's were banks.  You did not do that.  You invested in the Irish property market, which as you said was logical at the time, and it was even encouraged by the government through section 23 / section 27 tax incentives...as the government wanted people to, and needed people to, invest in the housing stock of the country.   I do not blame you for your past actions - you wanted to provide for your own pension needs and was sold the wrong products in a market which you thought was regulated.

That being said, you are where you are.  In my humble opinion a previous poster was right, as was Ben Dunne when he was asked about a similar persons debt recently.  Go to Newry or Wales or wherever in the UK.  Its a better governed country and the madness that went on here did not happen there, at least to the same extent.   You can come back in a years time debt free.


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## Jim2007 (8 Sep 2013)

BrokeGuy said:


> Thanks for the advice for an obvious novice here but all I am saying is that starting a repayment plan on a loan with a loan to value of 192% is madness. Seriously. Say it out loan, 192%.





BrokeGuy said:


> Two people have small properties get together and buy a house but keep the other houses = 3 houses. Hardly nuts when you got to consider that those some people don't have the jackpot pension public servants have so have to save for their own (e.g. rental income) and/or needed to buy a larger house (3 bed is all) for their 2 children.
> 
> The 4th property was excessive but the debt on that is actually only €45k.



You invested in four properties! It went wrong and now you expect society to carry the can for you, seriously?  If we followed your logic and compensated everyone who made a bad investment during recession, the country would go bankrupt in a matter of weeks!!!

If you are in a position to repay your debts then of course you should be required to do so.


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## Luternau (9 Sep 2013)

I don't think you are get the predicament you are in. You are being offered a fresh start by BOSI, who are probably the best bank you could be with in this circumstance, but you want more....or feel entitled to more ....?

Have you not realised how lucky you are? Read the threads here from people with no income, and struggling with one home, which the banks are threatening to repossess. You don't even come close to the stress and austerity they are enduring. They would love more-but more is a feint hope for them. 

Move on and stop blaming others or comparing to others, specifically civil servants, and their pensions etc. You dont seem to understand the first thing about pensions. For example you could have sold the properties (not bought the 4th) and bought one family house with little or no borrowings and then created a substantial pension fund from then on. 

It's too late now to lament on values paid borrowed etc. Your money invested is gone. Just like you did not know what the future would be with 4 properties you don't know what it will be with just one! Grasp the opportuntity to find out. You have nothing to loose and things will improve.


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## commonsense (9 Sep 2013)

BrokeGuy said:


> Dub Nerd, many thanks for your incredible advice - so valued. Guess I am the fool here 'cos people don't use property for pensions even though a high percentage of pension funds are both directly and indirectly invested in property. Guess they are wrong too.
> 
> Remember those who lost on pensions got tax relief on the contributions so those losses have been subsidised too.
> 
> It is fine, the normal joe soap without the absolute sickening and bankrupt inducing pensions of the civil service has three options; invest in property, invest in pension or do nothing. I did the first option, it failed but it was logical at the time. Not everyone is in a situation where a teacher can retire in mid 50s with a pension essentially worth €1.5m when valued against an annuity - that is the real injustice not the normal guy who took on a second property to assist for the future years.




Civil Service pensions are mandatory, they are not an option.
If Civil servants invested in property, then they too either borrowed money they didn't have or used the money they earned, after tax to do so. 

Unlike you though they may not be able to opt for the PIA. 
If they do then you can be sure that any "write-downs" they get will include a chunk of their income and their pensions as part of the deal. 


The reason this country is broke has nothing to do with CS pensions. The reason we are broke is because too many people borrowed long term money on the basis that house prices would only ever rise.

@Honest. He could have chosen to sell both properties when he met his OH. 
He chose to borrow to buy another one. Then he made another choice to buy yet another one.
His cribbing about Civil servant pensions is pretty ironic. He feels "entitled" to buy property out of money he didn't earn for _his_ pension, yet at the same time he lashes out at Civil Servants who work and pay actual money into these pensions.
He also says that even those people who have lost pensions had "their losses subsidised" - so while he moans about losing money he didn't earn and that he doesn't have to pay back (3 investment properties), he shows an absolute lack of regard for people who invested and lost "real earned" money into pension schemes.

He says that he "had to save for his pension", but that isn't what he did. He didn't save, he didn't use money he "earned". He speculated.

He says he "invested" in property. No he didn't. 

He wants (and is getting) his 3 investment gambles written off.
He wants (and is getting) his loans written off.

But that is not enough for him. Because he now wants his "new" mortgage to be based on the current value of the home, he wants the NE written off. 

He sympathises with the normal "Joe Soaps", yet who does he think is picking up his tab? 

He rages against Civil Servants - who are also picking up his tab.

Much like in the boom he (and many others) wanted the "easy" way in.
No he wants the easy way out.


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## dereko1969 (9 Sep 2013)

+1 commonsense


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## honest (9 Sep 2013)

commonsense said:


> He says that he "had to save for his pension", but that isn't what he did. He didn't save, he didn't use money he "earned". He speculated.
> He says he "invested" in property. No he didn't.


In fairness to the OP, you do not know that.  I would suggest that he and his partner did indeed save towards their pension, and did use money they earned towards their pension. Each, I gather, had a property when they met.  I would assume they did not get 100% mortgages on each of these, and at least some of the capital has being paid off.  I also assume they put some time, money and effort in to the two other properties.  From the amounts involved, the properties involved are probably modest properties in modest locations....some couples have their own dwelling house worth more that this couples pdh and 3 investment properties together.  I think the OP's point was that he  wanted to provide for his familes future / rainy day / his pension.  Section 23 and section 27 pension investments were a government scheme to encourage / incentivise people to invest for their pension, while having the spinoff for the government of increasing the quantity and quality of housing stock in the country ( that was the aim at the time ) and generating employment / taxes for the government. 



commonsense said:


> He feels "entitled" to buy property out of money he didn't earn for _his_ pension, yet at the same time he lashes out at Civil Servants who work and pay actual money into these pensions.


 I think the point he was making was that he did put his earned money in to his pension, and yet the public servant now retired with pensions worth the 1.5 million figure he mentioned ( if you were to buy them ) did not contribute anything like that in to those pensions.   Commonsense, you have to see both sides of the argument.   Lithernau is correct in that his "invested money is gone". Rather than be in deep debt in 3, 6, 10 or 20 years time, he should go to Newry or Wales/ England and go bankrupt there.   He is not doing the best thing for himself or his family if he stays here.  I think the OP feels the system is unfair and he is correct, and he should leave.


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## commonsense (9 Sep 2013)

honest said:


> In fairness to the OP, you do not know that.



I do, because the OP says it: 

_"I am dealing with a PIA where essentially what will happen is that I will lose 3 rentals and probably keep my own home. The three rentals are worth maybe €170k in total (yeah!) and the loans are a juicy €380k (bigger yeah!)"_






honest said:


> I would suggest that he and his partner did indeed save towards their pension, and did use money they earned towards their pension. Each, I gather, had a property when they met.  I would assume they did not get 100% mortgages on each of these, and at least some of the capital has being paid off.  I also assume they put some time, money and effort in to the two other properties.  From the amounts involved, the properties involved are probably modest properties in modest locations....some couples have their own dwelling house worth more that this couples pdh and 3 investment properties together.
> 
> I think the OP's point was that he  wanted to provide for his familes future / rainy day / his pension.  Section 23 and section 27 pension investments were a government scheme to encourage / incentivise people to invest for their pension, while having the spinoff for the government of increasing the quantity and quality of housing stock in the country ( that was the aim at the time ) and generating employment / taxes for the government.



Wow, lots of assumptions.  He did not invest actual money. If he and his OH lived in their respective single homes then they paid to have a roof over their heads - like renters do. 

When they turned them into "Buy to Lets" then the tenants paid the rent, which presumably paid the mortgages. 




honest said:


> I think the point he was making was that he did put his earned money in to his pension, and yet the public servant now retired with pensions worth the 1.5 million figure he mentioned ( if you were to buy them ) did not contribute anything like that in to those pensions.



He did not put his earned money into his pension. He speculated on property. 
And why blame the Public Servant on the terms and conditions of their jobs? Actually why even bring them up?   




honest said:


> Commonsense, you have to see both sides of the argument.   Lithernau is correct in that his "invested money is gone". Rather than be in deep debt in 3, 6, 10 or 20 years time, he should go to Newry or Wales/ England and go bankrupt there.   He is not doing the best thing for himself or his family if he stays here.  I think the OP feels the system is unfair and he is correct, and he should leave.



The OP is free to do whatever he chooses, that is not the point. The point is that he appears to be able to avail of a service that will write off a large chunk of his debt - he is not happy with that and he wants more - I would hazard a guess that moving out of Ireland for a year is simply too much work for him.

As to looking at both sides? Seriously? How about you and the OP having a look at the responsibility of the borrower instead of only looking to Public servants, the government and the banks for the massive failures in this country.

Yes there is blame certainly, but every borrower has to look at their own part in this mess.


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## honest (9 Sep 2013)

commonsense said:


> When they turned them into "Buy to Lets" then the tenants paid the rent, which presumably paid the mortgages.
> .


 Thats a huge assumption on your part, and you make a further assumption that the OP paid nothing in to the properties.  Rent usually does not cover mortgages, its unlike the OP got 100% mortgages on all properties, I gather there was a period when the OP were living in a property each before they met, who do you think pays the mortgage when the "inbetween" tenants, who do you think pays management fees / repairs / outfitting etc, stamp duty when purchasing etc.  



commonsense said:


> He did not invest actual money.


 


commonsense said:


> He did not put his earned money into his pension.


 I do not know the OP but, as I explained to you above, I would be extremely surprised if since they bought the properties, it never cost them a cent.  I would image it has cost them a lot of money, time and stress. 



commonsense said:


> Yes there is blame certainly, but every borrower has to look at their own part in this mess.


I never suggested the OP was not a least partly to blame.  The OP made  mistakes.   However I think the banks and government are also at least partly to blame for the mess the country is in, and I suggested the OP should follow Ben Dunnes advice and go for bankruptcy  - then he will be debt free in a year.   If he stays here he will not.   You are right though he should not worry about those who have great pensions.  They are entitled to them.


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## dub_nerd (9 Sep 2013)

I think you're missing the point that the OP is getting to keep his PPR. How is UK bankruptcy going to make him better off?

He is getting a good deal. At the end of the day his debts are to a foreign bank, so the saving grace is that he is a burden on the UK taxpayer, not us. He is not part of the debt non-payment problem that may well bring the rest of us to total economic destruction. I do hope the people glibly advocating bankruptcy tourism understand that's where we're heading.


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## commonsense (9 Sep 2013)

honest said:


> Thats a huge assumption on your part,



I don't see where I am assuming anything.



honest said:


> and you make a further assumption that the OP paid nothing in to the properties.



I said that he did not invest money into a pension. This was in response to where you suggested that he did invest his money into a pension.




honest said:


> Rent usually does not cover mortgages, its unlike the OP got 100% mortgages on all properties, I gather there was a period when the OP were living in a property each before they met, who do you think pays the mortgage when the "inbetween" tenants, who do you think pays management fees / repairs / outfitting etc, stamp duty when purchasing etc.




Are you saying that the OP had 3 rentals that did not cover the mortgages of the  Buy to Lets?  Are you saying that he didn't sit down and do the sums? Are you saying that he depended completely on property going up, rents never going down and a 100% occupancy at all times?
Are you saying he didn't figure management fees/maintenance and all the other costs of this into his calculations? 

Are you saying he took a gamble? 




honest said:


> I do not know the OP but, as I explained to you above, I would be extremely surprised if since they bought the properties, it never cost them a cent.  I would image it has cost them a lot of money, time and stress.


 
I don't doubt it. But let me explain to you. The OP borrowed at least 380k for those 3 properties. 

They will hopefully be sold for 170k and the balance will be written off. Gone. 

He did not invest his own money into these properties, he borrowed it. If he put down deposits then of course he has lost them, it was a gamble. 





honest said:


> I never suggested the OP was not a least partly to blame.  The OP made  mistakes.   However I think the banks and government are also at least partly to blame for the mess the country is in, and I suggested the OP should follow Ben Dunnes advice and go for bankruptcy  - then he will be debt free in a year.   If he stays here he will not.   You are right though he should not worry about those who have great pensions.  They are entitled to them.



As I said, if he feels that is the route to go then he should. But you haven't addressed the issue where he wants his NE written off as well? Do you think that is fair?


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## daftpunk (9 Sep 2013)

I've asked OP twice already, without an answer so far, was s/he actually told s/he will be getting these write downs or are they only assumptions.

I think until we get a definitive answer, we are all wasting our time guessing.


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## honest (9 Sep 2013)

dub_nerd said:


> How is UK bankruptcy going to make him better off?


 
If he stays here, he says "_Once the 6 years is over I will then have the luxury of starting a juicy 35 year mortgage for the house which is now worth €150k with the loan of €289k. That loan over 35 years total a repayment of €600k for a house worth €150k. Great."_

If he goes to Newry as Ben Dunne says, he will be debt free in a year.



commonsense said:


> Are you saying that the OP had 3 rentals that did not cover the mortgages of the Buy to Lets?


only he can answer that, but most landlords I gather are finding that rental income is not covering the costs ( mortgage, management company fees, repairs etc ) by a long shot.



commonsense said:


> He did not invest his own money into these properties, he borrowed it.


but you said he did not put his own money in to his property pension. I'm just after checking the OP's original post, and in fairness to him he paid off 21,000 of the mortgage on one property alone. (the loan was for 310, he now owes 289 he says ). He probably paid a deposit on the property too, as well as stamp duty, outfitting etc. He will lose all that.


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## commonsense (9 Sep 2013)

honest said:


> only he can answer that, but most landlords I gather are finding that rental income is not covering the costs ( mortgage, management company fees, repairs etc ) by a long shot.


 

But you can assume otherwise? It may be the case now, but was it the case when he first rented them out? 



honest said:


> but you said he did not put his own money in to his property pension.



Sorry, but please do not twist my words, if this is a genuine mistake then that's fine, but I never said "Property Pension", what I said (again) was that he did not invest his money into a pension. 

He borrowed money and gambled it on property. This borrowed money that he gambled with is being written off - taxpayers (here or in the UK) are footing that bill. 




honest said:


> I'm just after checking the OP's original post, and in fairness to him he paid off 21,000 of the mortgage on one property alone. (the loan was for 310, he now owes 289 he says ). He probably paid a deposit on the property too, as well as stamp duty, outfitting etc. He will lose all that.



I really think you should read his post again. He paid 20k off the house he is living in. He is in exactly the same both as thousands of people - it's called Negative Equity.


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## dereko1969 (9 Sep 2013)

....


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## honest (9 Sep 2013)

commonsense said:


> what I said (again) was that he did not invest his money into a pension.


 he invested time, effort and money in to properties which he thought were going to be his pension.  Section 23's and section 27's were a government incentive to get people to invest in property for their future needs.  As an aside it created employment and taxes for the government, but I gather from what the OP wrote his reason for investing was for his pension - he had no other pension.  Banks would not have given all the money needed ( 100% loan ) plus lend the cost of stamp duty plus solicitors fees plus outfitting etc, so I think it probably fair to say the OP did invest something in what he intended to be his "pension."   
I think everyone, esp with the benefit of hindsight, realises it was a bad decision, he should not had done so, but he is where he is, and he can reduce his loses if he goes to Newry for a year.  That way he can be debt free in a year, from what I understand.   If he does not go, he will owe at least 140,000 net this time next year / next Autumn, from what I understand, but please correct me if I'm wrong.  

In Oct 2014, would you prefer to be worth nothing and owe nothing, or to own nothing and owe 140 on a house in negative equity?  Ben Dunne was on the radio recently and his advice was for people in this situation to seriously consider going to Newry for the year....he said he would if he was in that situation.


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## so-crates (9 Sep 2013)

Hi honest,

you make the same few points a few times.

Firstly - The Irish government was encouraging everyone to invest in property (and by extension, I am assuming, you are attempting to imply that therefore the OPs responsibility for his actions is diminished and that the government is partially to blame for him becoming insolvent)


honest said:


> ...  You invested in the Irish property market, which as you said was logical at the time, and it was even encouraged by the government through section 23 / section 27 tax incentives...





honest said:


> ...  Section 23 and section 27 pension investments  were a government scheme to encourage / incentivise people to invest  for their pension, while having the spinoff for the government of  increasing the quantity and quality of housing stock in the country (  that was the aim at the time ) and generating employment / taxes for the  government.





honest said:


> ...he invested time, effort and money in to  properties which he thought were going to be his pension.  Section 23's  and section 27's were a government incentive to get people to invest in  property for their future needs.  As an aside it created employment and  taxes for the government,...



Given the OP says that three of the properties were purchased as PPRs I don't think you can apply these incentives so decidedly in this particular case. The other investment property is in Bulgaria, again unlikely to be a section 23 investment. The OP has made no mention of these incentives so you are assuming that was the thinking.

Secondly - that the OP should leave for another jurisdiction to escape the consequences of his actions


honest said:


> ...  Go to Newry or Wales or wherever in the UK.  Its a better governed country and the madness that went on here did not happen there, at least to the same extent.   You can come back in a years time debt free.





honest said:


> ...Rather than be in deep debt in 3, 6, 10 or 20 years time, he should go to Newry or Wales/ England and go bankrupt there.   He is not doing the best thing for himself or his family if he stays here.  I think the OP feels the system is unfair and he is correct, and he should leave.





honest said:


> If he stays here, he says "_Once the 6 years is over I will then have the luxury of starting a juicy 35 year mortgage for the house which is now worth €150k with the loan of €289k. That loan over 35 years total a repayment of €600k for a house worth €150k. Great."_
> 
> If he goes to Newry as Ben Dunne says, he will be debt free in a year.





honest said:


> ...I think everyone, esp with the benefit of hindsight, realises it was a  bad decision, he should not had done so, but he is where he is, and he  can reduce his loses if he goes to Newry for a year.  That way he can be  debt free in a year, from what I understand.   If he does not go, he  will owe at least 140,000 net this time next year / next Autumn, from  what I understand, but please correct me if I'm wrong.
> 
> In Oct 2014, would you prefer to be worth nothing and owe nothing, or to  own nothing and owe 140 on a house in negative equity?  Ben Dunne was  on the radio recently and his advice was for people in this situation to  seriously consider going to Newry for the year....he said he would if  he was in that situation.




Again this is an assumption (predicated on them establishing COMI and getting bankruptcy), and in the case of Newry, it is not backed up by what has been said on other threads on AAM. The judge in NI is reluctant to proceed with bankruptcy cases involving people from the republic.

Furthermore, given the volume of media coverage there has been on UK bankruptcy it is highly likely the OP has considered it. The OP may have reasons for wanting to remain in Ireland probably relating to children, family support and income. Newry is not a panacea.

Also I am curious as to the basis of your assertion that the UK is "better governed". What grounds have you for such a comparison? A more lenient bankruptcy regime is hardly sufficient grounds for such a statement. Having spent quite a bit of time there I wouldn't be so quick to assume the grass is greener.

The third point you make is that the fact the OP paid off some of his loans is relevant to the discussion and justifies tagging a speculative, leveraged investment in a single asset class (property) as pension. You also appear to have some sympathy for his railing against the completely irrelevant public sector pensions.


honest said:


> but you said he did not put his own money in to his property pension. I'm just after checking the OP's original post, and in fairness to him he paid off 21,000 of the mortgage on one property alone. (the loan was for 310, he now owes 289 he says ). He probably paid a deposit on the property too, as well as stamp duty, outfitting etc. He will lose all that.





honest said:


> I think the point he was making was that he did put his earned money in  to his pension, and yet the public servant now retired with pensions  worth the 1.5 million figure he mentioned ( if you were to buy them )  did not contribute anything like that in to those pensions.    Commonsense, you have to see both sides of the argument.   Lithernau is  correct in that his "invested money is gone".





honest said:


> ... but I gather from what the OP wrote his reason for investing was for his pension - he had no other pension.  Banks would not have given all the money needed ( 100% loan ) plus lend the cost of stamp duty plus solicitors fees plus outfitting etc, so I think it probably fair to say the OP did invest something in what he intended to be his "pension."   ...


Fair enough, he paid down some of his debt - I don't think a single poster has claimed otherwise, but the over-riding theme to the OPs approach was not to build a pension but to borrow one and hope the markets played into it, thus avoiding the slog of a slow and difficult build up on the basis of earnings over time. The size of his debt far outweighs any payment he has made into it. You say "he had no other pension" - but fundamentally that was a choice, not an imposition.


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## Baby blues (9 Sep 2013)

I nearly think this should be locked...... Broke guy hasn't come back on and I can see why.... It has turned it to a bit of a bashing and don't really think its
Called for.


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## daftpunk (9 Sep 2013)

+1


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## Luternau (9 Sep 2013)

Bashing or reality check? They can be the same thing...!


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## dub_nerd (9 Sep 2013)

+1. The OP still doesn't get that buying 4 houses in your twenties on nothing but the hope of capital appreciation is madness. It makes me realise that our next bubble is only as far away as the relaxation of credit restrictions (which thankfully won't be any time soon).


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## dereko1969 (10 Sep 2013)

Baby blues said:


> I nearly think this should be locked...... Broke guy hasn't come back on and I can see why.... It has turned it to a bit of a bashing and don't really think its
> Called for.


 
Of course you're right, people should only be told what they want to hear! That's what got the OP into the mess in the first place - yeah you're great keep putting all your savings into property, sure what could go wrong?

The OP wants to have his cake and eat it, get rid of the "investment" properties at no further cost to him (but passing it on to the taxpayer is fine) and keep his really big home (rather than moving from it to a smaller house) but also wants the mortgage on his PPR reduced to something in line with it's current value because property was only a one-way bet?

So if everyone in the country got the same deal where do you think that would leave us?


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## honest (10 Sep 2013)

dub_nerd said:


> +1. The OP still doesn't get that buying 4 houses in your twenties on nothing but the hope of capital appreciation is madness.


I do not believe in bashing a fellow when he is down. In fairness to the OP, I gather he said he had a property and his partner had a property ; they met, and for whatever reason bought two more. In fairness to them, they seem to be modest properties, if the combined value of 3 of them is 170k. Would you prefer if he bought one big house in a good area, or a number of smaller properties which he went to the trouble of renting out, dealing with tenants, leases, breakages, repairs etc? He was never going to end up with a pension worth the 1.5 million he mentioned ( someone else who did not invest in property), or anything like that. 

I think its unfair for you to say the OP "still doesn't get that buying 4 houses in your twenties on nothing but the hope of capital appreciation is madness". Did he even suggest he anticipated capital appreciation? He is down, in God knows what mental state, and I'm sure he realises his liabilities greatly exceed his assets ; I suggest you do not bash him. 




so-crates said:


> The judge in NI is reluctant to proceed with bankruptcy cases involving people from the republic.


I do not know about that, I know someone who went to the north for bankruptcy no problem, but he had relations there and may have had some dealings there, I do not know. "Ivan" an idea people can go to Wales either, or to England like your man from westlife and get his debts wiped out. 




dereko1969 said:


> So if everyone in the country got the same deal where do you think that would leave us?


in most other countries like the US and UK people can either hand back the keys or go bankrupt within a year. Where does that leave those countries?


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## so-crates (10 Sep 2013)

honest said:


> ...I do not know about that, I know someone who went to the north for bankruptcy no problem, but he had relations there and may have had some dealings there, I do not know. "Ivan" an idea people can go to Wales either, or to England like your man from westlife and get his debts wiped out.


 
A little research never hurt anyone, I picked up that tidbit from this website. Steve Thatcher who posts on here regularly has a key post thread on the best place to go bankrupt in the UK, this is the most recent post regarding NI
http://www.askaboutmoney.com/showpost.php?p=1348784&postcount=93

As I said, given how widely canvassed UK bankruptcy has been in the Irish media, it is highly likely the OP has investigated it already and decided that it is not appropriate for them. No harm in suggesting it once, but constantly handing it out as a panacea is unlikely to be be of much benefit or consolation to the OP.



honest said:


> in most other countries like the US and UK people can either hand back the keys or go bankrupt within a year. Where does that leave those countries?



Given that there are about 190 countries in the world (based on the number of UN members) you are rather cavalier with your use of "most countries" on the erroneous basis of only two. 

And point of information - it is not correct to say "handing the keys *back*" - the bank never owned the property, the OP did not buy it off them. 

There are non-recourse mortgages, where a bank cannot chase you for any outstanding balance and recourse mortgages. I think it is ten US states that allow non-recourse mortgages so even in the US for the most part, the debt remains with you when you surrender the property to the bank, voluntarily or involuntarily.
In the UK mortgages are generally recourse mortgages, same as here and in most of Europe - this means you still owe the balance outstanding even if you surrender your property (the security). 
In all cases it can be wiped out by various bankruptcy and insolvency mechanisms but those are separate to you walking away from your property.

While I applaud your wish to defend the OP from those you see as bashing, handing them half thought out generalities is of more harm than good. 

There are no quick fixes or easy solutions, but there are supports and options. Encouraging the OP to use them would be of far greater benefit.


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## commonsense (10 Sep 2013)

honest said:


> he invested time, effort and money in to properties which he thought were going to be his pension.



He bought property A and lived in it. He paid a deposit to buy the property and he borrowed the mortgage. He repaid his mortgage while he lived there, this is the cost of having a roof over his head - not an investment into a pension.

His partner/wife did the same with property B. They then rented these out and bought property C, they paid a deposit and borrowed the rest for this.

This is their family home, the one where they live with their children, in the city where they work. In 7 years they have repaid 20k off the loan - or 283 Euro per month. 

They will not "lose" this as they are living in the home, most people living in the home of their choice would do very well to have this luxury for 283 euro per month.

You do realise that most people have to pay to have the roof over their heads don't you?  



honest said:


> but I gather from what the OP wrote his reason for investing was for his pension - he had no other pension.




You don't seem to understand the difference between investing and gambling.

Investing is when you can afford to lose the money you are using.

Gambling is when you can't.


Had he "invested" his money into a pension (as opposed to for a pension) he would have set by a little each month and put it into a specific pension fund, or a savings account or even prize bonds.

What he did, like so many others, was to borrow the money to buy property and hope that the rent would pay the mortgage, and then sell it for a huge amount of money a few years later.

The Section 23's (that you're so fond of) insured that the cost to the buyer was as little as possible and insured tax free rental income for years. Maintenance, refurbishment etc, all written off by this incentive.

You can't use these section 23's as some kind of defence and then ignore what they basically did.

He chose to take a gamble and unfortunately it didn't work out for him. The costs he incurred was minimal because the first two houses were not bought as BTL's - they were bought as homes.

The gamble started when people (not only the OP) discovered that the rents were no longer covering the mortgages, that demand had dropped, increased costs of properties and in many cases incomes lost and so on.

Please Honest try to respond to the actual points I'm making.

Thanks.


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## honest (10 Sep 2013)

commonsense said:


> He bought property A and lived in it. He paid a deposit to buy the property and he borrowed the mortgage. He repaid his mortgage while he lived there, this is the cost of having a roof over his head - not an investment into a pension.
> 
> His partner/wife did the same with property B. They then rented these out and bought property C, they paid a deposit and borrowed the rest for this.
> 
> ...


They are in negative equity to the tune of a six figure sum : they will be better off financially - not difficult as now I understand from what the OP wrote that his liabilities greatly exceed his assets - if they went to Britain ( like so many others ) and got this debt wiped off. 




commonsense said:


> most people living in the home of their choice would do very well to have this luxury for 283 euro per month.


you forget he would have paid interest as well as paying off the capital amount. Living in the home - rightly - cost a lot more than 283 a month. 




commonsense said:


> You do realise that most people have to pay to have the roof over their heads don't you?


of course, did I ever suggest otherwise? And I also think people should pay for their pension. It cannot come too easy and I think the OP may have expected it too easy.



commonsense said:


> You don't seem to understand the difference between investing and gambling.
> 
> Investing is when you can afford to lose the money you are using.
> 
> Gambling is when you can't.


a thin line at times. Investors in banks in cyprus lost money, as well as some investors in Irish banks in the past. 

One dictionary definition of investing is " 
1. the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value. "

Gambling is To bet on an uncertain outcome, as of a contest.*b. *To play a game of chance for stakes.
*2. *To take a risk in the hope of gaining an advantage or a benefit.
*3. *To engage in reckless or hazardous behavior: You are gambling with your health by continuing to smoke.




All pension funds include a percentage of their funds in property : do you think they are "gamblers"? 

Of course, with the benefit of hindsight, its easy to see how foolish it was to "invest" in property in a poorly regulated, poorly planned and poorly governed economy, but it did not seem like that at the time, and for decades returns on property outpaced returns from many other types of investment, or at least kept up with inflation, unlike your prize bonds etc 



commonsense said:


> What he did, like so many others, was to borrow the money to buy property and hope that the rent would pay the mortgage, and then sell it for a huge amount of money a few years later.


In fairness to the OP he did not mention he wanted to sell the property "a few years" after buying it. Definition of few: _"Amounting to or consisting of a small number: one of my few bad habits._
_*2. *Being more than one but indefinitely small in number: bowled a few strings."_
Most people who bought property to rent out , or to have as their pension, done so as a long term thing. There were high transaction cost charged by the government eg stamp duty to discourage people holding property for only "a few" years. In fact, when the government decided it wanted people to invest in section 23 / 27 properties for their pensions / long term saving, they discouraged greatly the sale of such properties within ten years, by having a clawback of tax incentives within ten years if the property was sold. 





commonsense said:


> The Section 23's (that you're so fond of) insured that the cost to the buyer was as little as possible and insured tax free rental income for years. Maintenance, refurbishment etc, all written off by this incentive.


I do not think "Maintenance, refurbishment etc, all written off by this incentive."...I think the property owner still had to pay this. 




commonsense said:


> He chose to take a gamble and unfortunately it didn't work out for him.


It was a gamble, but unless you have a permanent and pensionable job many people have found their finances have been a gamble. He should have disregard the government property incentive and invested some of his savings for the future outside the country, perhaps through a pension fund ; or else got a job with a defined benefit pension.   Not everyone can have a defined benefit pension worth the 1.5 million the OP gripes about, though.



commonsense said:


> The costs he incurred was minimal because the first two houses were not bought as BTL's - they were bought as homes.
> .


I doubt the costs were "minimal"; they probably spent tens of thousands through deposits , stamp duty, solicitors fees, outfitting, leases, initial mortgage repayments, etc.

Anyway, I am fed up playing devils advocate, and there are questions only the OP can answer eg how much extra per month did he invest in the extra 2 properties etc. However he is where he is: I think judging from his posts he thinks the playing field is not level?




commonsense said:


> Please Honest try to respond to the actual points I'm making.


I think I have always responded to your actual points. Anyway I have tried to be fair, and to see all points of view. I do not believe in bashing people when they are down, especially if they are decent hard-working people ( and I have no reason to suspect otherwise) who acted in good faith but were possibly unlucky / foolish / misled or whatever. I am not posting on this thread any more and let the OP explain things if he wants.


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## dub_nerd (10 Sep 2013)

honest said:


> I think its unfair for you to say the OP "still doesn't get that buying 4 houses in your twenties on nothing but the hope of capital appreciation is madness". Did he even suggest he anticipated capital appreciation? He is down, in God knows what mental state, and I'm sure he realises his liabilities greatly exceed his assets ; I suggest you do not bash him.



Yes he did suggest that ... by talking at length about the negative equity on his PPR. His PPR is costing him no more than when he agreed to buy it, at a price which he presumably thought was fair value back then. He could have had a lower mortgage on the PPR at the time by selling up the other properties as most sane people would have done once upon a time. I've lots of sympathy for people who ended up in NE through no fault of their own. Sorry, I can't bring myself to feel the same for someone who has their disastrous investment decisions paid for by the taxpayer and then whinges that they're not getting a big enough write down.


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## Brendan Burgess (11 Sep 2013)

Folks

As this has moved into a general letting off steam thread and as people  have been speculating on house prices, I am closing the thread.


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