# Sell family home & Invest?



## Ronaldo9 (28 Mar 2022)

*Age:*
40
*Spouse’s/Partner's age:*
34

*Annual gross income from employment or profession:*
E120,000
*Annual gross income spouse:*
E70,000

*Type of employment:*
PAYE, private sector

*Expenditure pattern:*
We allocate our money (mortgage, bills, investing, saving) and spend the rest.

*Rough estimate of value of home*
E750,000
*Mortgage on home*
E50,000
*Mortgage provider:

Type of mortgage: Tracker, interest only, fixed rate*
Variable
*Interest rate*
4%

*Other borrowings – car loans/personal loans etc*
None

*Do you pay off your full credit card balance each month?*
Yes

*Savings and investments:*
E30,000 savings. Education fund for the kids 400 a month being invested in a zurich fund.

*Do you have a pension scheme?*
I did in previous roles but not now. I have a pension fund of 150K E.
Wife has a 50K pension and pays a bit in each month that her company also match.

*Do you own any investment or other property?*
Yes - a 3 bed house worth approx 250K Euro.

*Ages of children:*
2 under 2

*Life insurance:*
Mortgage Protection? Yes.

*What specific question do you have or what issues are of concern to you?*
We are considering selling our primary residence in south Dublin, clearing our mortgage and moving to our mortgage free property for a lifestyle change in the next 18 months (before kids start school).

Plan would be to buy a 2 or 3 bed apartment in South Dublin as a rental and for the kids to use if/when they go to uni in Dublin, we very fortunately have an option to buy an apartment for reduced rate (400K, worth about 550K/600K) and rent it out for 2500 minimum a month.

We would both be keen to leave our current well paid jobs and either start a small business and/or work part time to supplement the move. It's very much a lifestyle move that we're teasing out. If we sell our main house and bought another property with cash, we would have approx 300K left and would probably look to invest this.

Thanks a lot for reading and would love to read your suggestions and comments.


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## Brendan Burgess (28 Mar 2022)

Ronaldo9 said:


> we very fortunately have an option to buy an apartment for reduced rate (400K, worth about 550K/600K) and rent it out for 2500 minimum a month.



If someone is selling you something worth €600k for €400k, then you should buy it. 

Not sure you should be buying something in case your 2 year old children might go to college in 18 years.  So maybe buy it and sell it again. 

It's tough being a landlord.  You talk about lifestyle. Your life could be ruined by tenants who don't pay and the frustration of years spent trying to evict them. 

But if you want to do that, then it's probably ok to hold onto it.

Brendan


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## Brendan Burgess (28 Mar 2022)

Ronaldo9 said:


> we very fortunately have an option to buy an apartment for reduced rate (400K, worth about 550K/600K)



If someone sells you something worth €600k for €400k, you are getting a gift of €200k and may be liable to CAT on it. 

If they are disposing of an asset, they may have a CGT liability on it based on the value and not the sales price. 

Take tax advice on this before you do it.  If you have a CAT liability, you may get a credit for any CGT paid.

Brendan


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## NoRegretsCoyote (28 Mar 2022)

Ronaldo9 said:


> *Do you have a pension scheme?*
> I did in previous roles but not now. I have a pension fund of 150K E.
> Wife has a 50K pension and pays a bit in each month that her company also match.


Your pensions seem extremely low for your age and income. The rest of your asset position is really good but it is all in Irish property!

I would start pension contributions to the max you can afford for your age, all equities, both spouses.



Ronaldo9 said:


> *Mortgage on home*
> E50,000
> *Mortgage provider:
> 
> ...


It's not going to be much, but worth getting a fixed rate at 2.x% with your current provider. There is no reason to be on variable long term.


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## Steven Barrett (28 Mar 2022)

Ronaldo9 said:


> We would both be keen to leave our current well paid jobs and either start a small business and/or work part time to supplement the move. It's very much a lifestyle move that we're teasing out.


This jumped out at me. What are you going to do? You are leaving good jobs that have provided you with a good standard of living. What are you going to live on? If you start your own business, do you need capital to get started or can you start the business for next to nothing? How long will it take before you are able to take an income from it? Or if you work part time, will it be in the industry you are in or do you mean something like a shop? 

Moving house is the easy bit. Funding the rest of your life is the hard bit. 


Other bits:
Only the bank is protected financially if one of you dies. The only money the surviving spouse will get is the surplus from the mortgage protection after the bank takes what they need. and the value of your pensions. 

Your pension is underfunded. If you are making big changes to your lifestyle and reducing your cost of living, will there be any money to contribute to a pension? 

There's a lot more to be thought through on this one...



Steven
www.bluewaterfp.ie


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## DublinHead54 (28 Mar 2022)

Probably makes more financial sense to flip the apartment and pocket the difference than run it as a rental. 2,500 pcm on a 600k asset is a gross yield of 5%, after you pay taxes and fees it will be substantially less. Obviously being able to buy it for 400k makes it more attractive.

My gut would be to stay away from rentals and if you decide to sell the 750k home use the funds to top up pensions or invest into your business that will generate you income. Do you have a business in mind, or is it just an idea at this stage? But it looks like at current income levels and pension levels you need to keep working.


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## Ronaldo9 (28 Mar 2022)

Thanks @Brendan Burgess - Great points particularly re: CGT & CAT. Definitely notes I've scribbled down to make sure we explore further.

@Steven Barrett & @NoRegretsCoyote & @Dublinbay12  - yes, our pensions have been underfunded, it's so hard to do it all. So the investment property we buy would also intend on being our pension and we would also look to top up our existing pensions etc as we can going forward.

Back of the beermat math would be:

750K - 50K (outstanding mortgage)
= 700K

700K- 400K (second property) = 300K left

We would intend on investing the 300K (pensions and investing) so we can hopefully grow it to a point to buy another investment property in 10ish years. With the rental income after tax, we think being mortgage free and another couple of grand per month in total coming in after tax would be enough for us to live a life we are comfortable with.

I do agree there needs to some cash flow modelling done here to be sure.

Thanks for all your thoughts, really appreciate it and have read and will continue to read all.


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## NoRegretsCoyote (28 Mar 2022)

Ronaldo9 said:


> *So the investment property we buy would also intend on being our pension *and we would also look to top up our existing pensions etc as we can going forward.


Yes but you would still be heavily in on Irish property. Two reasons which this is a bad idea:

1) it's an asset class where values fell 50% and rents 25% in the not-too-distant past
2) for pension contributions you get tax relief on contributions and capital gains. You don't get that with property.


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## Steven Barrett (28 Mar 2022)

I think the OP is underestimating the cost of life. With net income of €10k a month, they probably don't even think about whether they can afford something. That will change living off rental income. And kids are going to get expensive. And you need to spend money on properties every few years to keep them fresh, more expenditure that will eat into savings without actually generating higher rent on the property. 



Steven
www.bluewaterfp.ie


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## Ronaldo9 (28 Mar 2022)

You could be right, Steven, we haven't had to think about expenses a whole lot before now but we were super keen to get the mortgage down so we could do something like this! I may be underestimating things. That's why I'm trying to get my ducks in a row and figure out what is/isn't possible. I'd be amazed if 4,000 Euro net a month wouldn't be enough though. Cost of living is lower where we'd move to also.


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## _OkGo_ (29 Mar 2022)

Ronaldo9 said:


> moving to our mortgage free property


I presume this is the €250k 3 bed semi. You haven't mentioned if it is rented (assume it is) and how much rent it generates. But two things to keep in mind:
1. If the gross rental yield is good on this property, you should be keeping it and looking to buy another more suitable property as your new PPR
2. With an income of €190k and 2 small kids, I think you will quickly regret moving into a 3 bed semi. Location is obviously a factor in your current PPR's value but you must be living in a larger more comfortable house than the €250k 3 bed semi.



Ronaldo9 said:


> option to buy an apartment for reduced rate (400K, worth about 550K/600K) and rent it out for 2500 minimum a month


I'm making a lot of assumptions here but it must be a family member (parent) willing to sell it to you at this discount. If that is true, then it is an unnecessarily convoluted way of giving you a gift of €200k. They should sell it and give you a cash gift if that is what they are really trying to do.

Think of it this way, if they sold it for €600k and gave you a cash gift of €200k, there is no way that you would buy this type property as a rental with gross rent of 5%.  

If you sell your PPR (€700k net), receive a €200k gift and keep your existing rental, you now have €900k to buy a more appropriate PPR in the area you want to move to and buy another lower value rental similar to your current 3 bed semi. 



Ronaldo9 said:


> We would intend on investing the 300K (pensions and investing) so we can hopefully grow it to a point to buy another investment property in 10ish years.





Ronaldo9 said:


> So the investment property we buy would also intend on being our pension



I think you may have an unhealthy bias towards property because of the growth in value of your own properties and possibly seeing others (eg. parents) do well also. But that was mostly luck in the last 20/30 years in that some got in at the right time or got exceptionally lucky with a combination of poor lending practices and cheap trackers. 

You should try to break away from this line of thinking and use your pension as your pension. You are in a healthy position financially so you need to spread your wealth (mainly into pension). You shouldn't put all your eggs in the Irish property market


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## Ronaldo9 (29 Mar 2022)

_OkGo_ said:


> I presume this is the €250k 3 bed semi. You haven't mentioned if it is rented (assume it is) and how much rent it generates. But two things to keep in mind:
> 1. If the gross rental yield is good on this property, you should be keeping it and looking to buy another more suitable property as your new PPR
> 2. With an income of €190k and 2 small kids, I think you will quickly regret moving into a 3 bed semi. Location is obviously a factor in your current PPR's value but you must be living in a larger more comfortable house than the €250k 3 bed semi.



Hi @_OkGo_ thanks for your thoughts, appreciate it.

Apologies for confusion, the 3 bed we would move to isn't a semi, it's a detached 2 story house on couple acres of land with loads of space and this is a big reason for the move. It's worth 250 as it's in the countryside (but not far from towns) but who knows how much it'll cost if market keeps going up (which i know is a very celtic tiger way of thinking) .

It would generate a rent of 1000-1200 a month I'd say if we put it out on the market.



_OkGo_ said:


> I'm making a lot of assumptions here but it must be a family member (parent) willing to sell it to you at this discount. If that is true, then it is an unnecessarily convoluted way of giving you a gift of €200k. They should sell it and give you a cash gift if that is what they are really trying to do.
> 
> Think of it this way, if they sold it for €600k and gave you a cash gift of €200k, there is no way that you would buy this type property as a rental with gross rent of 5%.
> 
> If you sell your PPR (€700k net), receive a €200k gift and keep your existing rental, you now have €900k to buy a more appropriate PPR in the area you want to move to and buy another lower value rental similar to your current 3 bed semi.



The main reason for wanting the 3 bed apartment in south Dublin is to ensure we have a property in a brill location near schools and university and we hoped to use this as part of our income with the move and it would be a safety blanket for us to know we can come back to Dublin in the future if we ever wanted to (contingency). 

The main goal of the purchase alongside an income obviously would be to ensure there's an asset there for the kids in the future if they go to University etc.

The rental yield with discounted/gift included price for us would be 6% which I thought was decent.  I'll have to check the numbers and see if investing would give a better return and then buying an asset in the future i.e. holding off. Not sure. What do you think? 



_OkGo_ said:


> I think you may have an unhealthy bias towards property because of the growth in value of your own properties and possibly seeing others (eg. parents) do well also. But that was mostly luck in the last 20/30 years in that some got in at the right time or got exceptionally lucky with a combination of poor lending practices and cheap trackers.
> 
> You should try to break away from this line of thinking and use your pension as your pension. You are in a healthy position financially so you need to spread your wealth (mainly into pension). You shouldn't put all your eggs in the Irish property market



You're probably right to be honest. Our house has risen a lot in the last number of years and it's turned our heads big time. I am a huge believer in pensions but I also know it's not possible to do it all so I was trying to suss it all out.

Thanks for your thoughts, it's really appreciated, keep it coming!


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## _OkGo_ (29 Mar 2022)

Ronaldo9 said:


> the 3 bed we would move to isn't a semi, it's a detached 2 story house on couple acres of land


Ah sorry, my bad. I am so used to reading 3 bed semi that I misread your original post. In that case, it is a suitable property for you and it wouldn't be a good rental at €1-1.2k rent so if it suits your lifestyle then yes you should use this property as your PPR



Ronaldo9 said:


> The main goal of the purchase alongside an income obviously would be to ensure there's an asset there for the kids in the future if they go to University etc.


I understand the logic and why people think like this but if your kids were 18/19 today, would you buy them a €600k property to live in? Probably not. Even in Dublin you could do a lot better than that and still be connected to public transport for universities etc. And then there is a very real possibility that your children want to go to university outside Dublin.

Personally I think you should not try to predict their intentions but rather focus on building your wealth so that you have the resources to buy or rent their accommodation when the time comes.



Ronaldo9 said:


> The rental yield with discounted/gift included price for us would be 6% which I thought was decent


Including the gift inflates your return artificially. If you have €400k cash and a €200k cash gift, you would not buy this property as a rental investment at 5% gross yield. Even though I think it is the wrong approach, the only reason to buy this property is because it is the only way to get the gift or the current owner wants to "keep it in the family". 

I would be trying to convince the owner to sell and give you the cash gift so that you can put the money to better use or buy it and flip it as others have suggested.


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## DublinHead54 (29 Mar 2022)

should spend the time to understand the net yield. Letting Fees, Property Management Fees, Upkeep, tax etc will quickly  eat away at the profit.

That 30k annual rental income could quickly drop to ~20k.


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## Zenith63 (29 Mar 2022)

Steven Barrett said:


> If you start your own business, do you need capital to get started or can you start the business for next to nothing? How long will it take before you are able to take an income from it?


@Ronaldo9 I think Steven’s questions here are critical for you to answer before deciding what to do with your spare funds.

Most small businesses fail because they run out of money, regardless of how well they’re run. If your plan is to start a business, which I’d strongly encourage if you fancy it, keep those spare funds somewhere you can get at them quickly to hit the ground running with the business. It might allow you weather a recession that hits early in the life of the company, open a second location without having to build up the savings to do it, take on staff more quickly to accelerate growth or just lessen the load on you guys, decorate better, outsource payroll/accounts etc etc.

An otherwise successful business that is failing purely because you don’t have the money to keep it going is stressful and heartbreaking.  If the business is successful, which is much more likely with a strong injection of capital at the start, the few percent you could have made on the rental property will mean little to you.


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## Peanuts20 (29 Mar 2022)

I'm assuming you are looking to move into the 3 bed house that you currently rent out?. Have you considered what you need to invest in that house to bring it back to a "live in" standard? Like all rental property, it'll have taken a bit of a battering over the years.

Secondly, you need to sort out Life Assurance and possibly Health Insurance as well, if not already done. Stuff happens and you need to be prepared to deal with it. 

Your plan on saving for kids education is wise, more people should do it. I'd not worry about whether or not the kids will live in that appartment, they might want to go to Mary I or UCC but a good rental property with no mortgage is a solid asset to have.

In terms of jacking in the jobs, you really need to sit down and figure out a realistic budget to live on and then probably add 50% to it, smallies are frightfully expensive little things to have. If you have a business idea already, go and talk to your Local Enterprise Office (LEO), they can give good advice and grant aid as well


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## dubdub123 (29 Mar 2022)

If moving rural you shoupd factor in the hidden costs of transport including school buses, travel  to activities and childcare limitations.
You also need to consider infrastructure eg access to medical care, activities etc

You're consudering throwing a lot of things up in the air for the rural dream which isnt all its cracked up to be. Great to have that land for small kids, but maintenance of it over the years is time consuming and as children get older, options may be limited for them.
If you could, try rent in the location for 6 months to a year before making any big decision.
I lived rural for 15 years and just recently managed to sell thst house and buy in Dublin. Prices raced ahead in urban area, so ive a hefty mortgage now for a standard 3 bed house but its worth it to give us all more options for the future.


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## Cervelo (30 Mar 2022)

Steven Barrett said:


> There's a lot more to be thought through on this one...


I would in this situation 110% agree with Steven here.
It just sounds from the info provided that this hasn't been thought through properly and is been rushed so as to fit in with a kiddie time scale
I'm not saying it can't be done just you need to take a step back and look at the bigger picture so to speak

Statements like this give me cause for concern


Ronaldo9 said:


> We allocate our money (mortgage, bills, investing, saving) and spend the rest.





Ronaldo9 said:


> yes, our pensions have been underfunded, it's so hard to do it all.





Ronaldo9 said:


> I'd be amazed if 4,000 Euro net a month wouldn't be enough though. Cost of living is lower where we'd move to also.


For a couple on €190k you don't seem to have much to show for it  I do note that you've a house worth €750k and only €50k of a mortgage and a second property worth €250k presumably mortgage free, is this where all the excess income has gone??

I'm going to offer a suggestion from a different angle that might get you to where you want to go.
Don't at this stage sell the house and move to the other property
Clear your mortgage from the savings and any other means you have
Do try and live on €4k a month and see how you get on
When you're able to do that then start looking at your employment situation and how you can change it for the better
Then start looking at the properties and decide which is the better one to keep and which to sell, you might decide to stay where you are now

It's not going to fit in with the 18 month time scale but you would definitely be able to make a more informed and better decision in the 3 to 5 year period


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## SlurrySlump (30 Mar 2022)

I was offered a huge sum of money for my property back in 2005/2006 when the tiger was roaring.  I briefly considered selling....renting another property and investing the proceeds in bank shares.....I considered these a safe haven............I counted to ten......I am so glad I did.


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## Brendan Burgess (30 Mar 2022)

There are two separate issues here. And first, let's look at them separately. 



Ronaldo9 said:


> We are considering selling our primary residence in south Dublin, clearing our mortgage and moving to our mortgage free property for a lifestyle change in the next 18 months (before kids start school).



Great idea. You have a home in which you would prefer to live.  It's a lifestyle change which is to be commended assuming you have the income to support it. 

I assume you have thought of schools, work, business etc.   Assuming this all works out, then go for it. 




Ronaldo9 said:


> Plan would be to buy a 2 or 3 bed apartment in South Dublin as a rental and for the kids to use if/when they go to uni in Dublin, we very fortunately have an option to buy an apartment for reduced rate (400K, worth about 550K/600K) and rent it out for 2500 minimum a month.



The uni bit is a distraction. Forget about it for the moment. Does this investment stand up on its own merits. You have €700k. Should you invest €400k of it to buy a property worth €600k? 

Yes, I think you should.  If I were offered a property worth €600k for €400k, would I buy it? Yes, I would although I don't like property investment.   If I got tired of the investment, I would sell it off and if house prices don't fall by more than 20%, I will be back to square one.  (I am assuming you will have a CAT bill on the purchase.) 

Has the property got a tenant? If it has, then you will be unable to charge market rent for it.  Just in case that is the reason for the discount. If it has a tenant at a discounted rent, I wouldn't touch it. 

I would still sell your current house if it stacks up and invest the proceeds in a diverse portfolio of shares. 

Brendan


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## DublinHead54 (30 Mar 2022)

You also need to look at this in the context of how you will fund your lifestyle pre and post retirement i.e. funding gaps. You've said you can live on 4k per month (72k gross per year).

The only thing that makes the apartment attractive in my opinion is that you can purchase it at discount. If you are after a complete lifestyle change, you are in a position to sell up and secure your retirement income now, but you will need to continue to work. With two children under 2 and 30 years until retirement you have a lot of costs coming down the line. If you want to quit to start up a business that is great, but to go work part time for somebody else, I'd question if that is better. I have family who run their own businesses, and it is extremely tough and in my opinion harder than my stressful corporate job.

You have the potential to meet your goals, but the timeline is probably 7 years plus. Pay of your mortgage, max out your AVCs and save money. 


My thought process below

Pre Retirement

Option 1
Do Nothing: Current jobs provide >72k per year in income

Option 2
Sell House, Buy Apartment & Change Jobs:
Apartment will generate gross 30k in revenue before costs
Invest remaining: A 100k investment will yield 0%+ depending on the risk of the investment.
Funding Gap: 42k, you'll need to secure employment the generates 42k
Retirement Gap: Apartment + Projected Pension may gross 55k per annum, gap ~17k


Option 3
Sell House, invest proceeds in pension and start employment
Funding Gap: Need to find employment of 72k per year
Retirement Gap: close to 0 if all house proceeds are invested in pension.


Retirement (Age 68)

Your Pension Pot (private + state) is projected to be 25,877, based on current 200k pension pot, and €250 monthly contribution
This is €1,855 net per month
You need a pension pot of ~1m to provide 4k income in retired
Funding Gap: ~800k or 1,500 per month


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## Steven Barrett (30 Mar 2022)

Brendan Burgess said:


> There are two separate issues here. And first, let's look at them separately.
> 
> 
> 
> ...


Buying property at 2/3 the market price is the easy bit Brendan. So is selling a south Dublin home for a cheaper one in another part of the country. 

It's the parts that you assume have been thought of that are raising all the questions. The OP and his wife are giving up well paying jobs. What will they do for income?

Be professional landlords 
Start a business
Work part time
We have seen some detail on being a landlord but even those figures seem optimistic as they don't seem to account for periods of vacancy and refurbishment costs as well as other costs of being a landlord, just rent = income. 
Zero detail on what a new business would look like or what part time work they will have. 


Effectively retiring at 40 or 34 for the spouse is the stuff of FIRE people. The assets the OP has accumulated so far aren't jumping out at me. I regularly do work for clients who are in much better position financially but are not contemplating giving up work at that age. 




Steven
www.bluewaterfp.ie


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## goingforgold (30 Mar 2022)

Steven Barrett said:


> Buying property at 2/3 the market price is the easy bit Brendan. So is selling a south Dublin home for a cheaper one in another part of the country.
> 
> It's the parts that you assume have been thought of that are raising all the questions. The OP and his wife are giving up well paying jobs. What will they do for income?
> 
> ...


The assets jump out at me for a 40 year old and a 34 year old.

They have a PPR with 700k equity. They have a 250k mortgage free second property. They have 30k in cash and option to buy another property with 200k equity. That all adds up to 1.18m of assets before pension taken into account!

I get you may have wealthier clients but I sometimes feel people lose perspective here a little. If they are not wealthy given their ages then the rest of us are in big trouble!


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## Cervelo (30 Mar 2022)

goingforgold said:


> I sometimes feel people lose perspective here a little. If they are not wealthy given their ages then the rest of us are in big trouble!


They are rich but not wealthy and then don't forget to factor in the two kid's!!


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## Ronaldo9 (30 Mar 2022)

Brendan Burgess said:


> There are two separate issues here. And first, let's look at them separately.
> 
> 
> 
> ...



@Brendan Burgess - It's what we are considering for sure but we won't rush it, this is all part of the planning process.



Brendan Burgess said:


> The uni bit is a distraction. Forget about it for the moment. Does this investment stand up on its own merits. You have €700k. Should you invest €400k of it to buy a property worth €600k?
> 
> Yes, I think you should.  If I were offered a property worth €600k for €400k, would I buy it? Yes, I would although I don't like property investment.   If I got tired of the investment, I would sell it off and if house prices don't fall by more than 20%, I will be back to square one.  (I am assuming you will have a CAT bill on the purchase.)



This is what we were thinking, it's in a super popular location and we know the location really well and all there is to know about the maintenance of the property etc i.e. annual fees, maintenance etc.


Brendan Burgess said:


> Has the property got a tenant? If it has, then you will be unable to charge market rent for it.  Just in case that is the reason for the discount. If it has a tenant at a discounted rent, I wouldn't touch it.



No it's not on the market for rent. It's being lived in so this thankfully wouldn't impact us.



Brendan Burgess said:


> I would still sell your current house if it stacks up and invest the proceeds in a diverse portfolio of shares.
> 
> Brendan



To be totally honest, the fact our house price has risen so much is what started this whole thought process off. Thanks for your thoughts, it's appreciated!



Steven Barrett said:


> Buying property at 2/3 the market price is the easy bit Brendan. So is selling a south Dublin home for a cheaper one in another part of the country.
> 
> It's the parts that you assume have been thought of that are raising all the questions. The OP and his wife are giving up well paying jobs. What will they do for income?
> 
> ...



@Steven Barrett - It would be Option 1 AND (not just Option 1!) Part 2 is an option but I'd say Option 3 would be most likely. One of us may retain our full time jobs also, nothing is ruled out. There are remote work opportunities in our industries.


Steven Barrett said:


> We have seen some detail on being a landlord but even those figures seem optimistic as they don't seem to account for periods of vacancy and refurbishment costs as well as other costs of being a landlord, just rent = income.
> Zero detail on what a new business would look like or what part time work they will have.



Is 6% rental yield for a property with expenses and fees deducted not a decent return for a property? I was always told it was.



Steven Barrett said:


> Effectively retiring at 40 or 34 for the spouse is the stuff of FIRE people. The assets the OP has accumulated so far aren't jumping out at me. I regularly do work for clients who are in much better position financially but are not contemplating giving up work at that age.



But we wouldn't be retiring at 40. We both intend on working to ensure we have a cumulative income of ~4K per month. We've looked at our expenses and honestly, 4,000 Euro works.

I've absolutely no doubt you've wealthier clients but I can assure you, for our ages, we're in a good position (not that it's a competition) amongst our peers/similarly aged individuals but we don't consider ourselves wealthy, just fortunate.



Cervelo said:


> They are rich but not wealthy and then don't forget to factor in the two kid's!!



@Cervelo - please, we don't consider ourselves rich or wealthy, not at all. We're in a fortunate position and just trying to make the most out of it. We do have two kids but by moving we'd also save 100,000 Euro on private secondary school fees. Another option we're considering! Plus where we would move to, it's a lot cheaper than Dublin!

Thanks to all for suggestions and food for thought, it's greatly appreciated.


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## DublinHead54 (30 Mar 2022)

Aren't the costs of goods the same across the country? I wouldn't expect there to material cost of living differences across Ireland when you exclude housing in your case. 

I recently sold a 2 bed apartment in a really popular area and development in D4, I did not achieve 550-600k and others that sold in the last year did not either. Maybe in the last quarter things have further increase, however my main driver was that the in the second half of 2021 I found rents reducing in the area and yields dropping. 

Your real yield is likely to be closer to 3% and you'll only net ~18k per year from the property in your pocket. 


Rental Income 30k (2500 pcm)
Costs
Property Tax - 525
Apartment Management fees - 1900
RTB Registration - 90
Property Management / Tenant Finder 10% - 3,000
Accountant - 750
Insurance - 250
Misc Costs - 500

Tax @20% = 4600
Net = 18,385 / *Net Yield 4.5% (3% against 600k valuation)*


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## Rasputin (30 Mar 2022)

You are in a very envious position. Most of us, if we are lucky, have between 60-80 years on this planet - between school and work, how much of it do we spend on our own ticket.  Mine, and a lot of my friends parents never made it to retirement, or if they did, they were in absolute tatters from a long life of work and have no energy, health or will left to enjoy it.

Go for it, and make the most of it - 4k a month with no mortgage is a great position that very few people would ever find themselves in. Worst case scenario, you can just get a job when you need to...  if I had your assets, my main goal would be to use it to reduce my stress and working hours as much as I could, otherwise, what's the point of the luck that has come your way.


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## T McGibney (30 Mar 2022)

Dublinbay12 said:


> Rental Income 30k (2500 pcm)
> Costs
> Property Tax - 525
> Apartment Management fees - 1900
> ...


20% tax is sadly a pipedream. It will be closer to 30% as long as rental income remains subject to USC and PRSI.


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## Cavanbhoy (31 Mar 2022)

4k a month debt free would definitely provide a very adequate lifestyle.
With rent of 30k would only need to provide 30k a year from work.
Plus you would still have a very strong nest egg of 300k.
Comes's down to what is best from a lifestyle point of veiw for your family


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## Ronaldo9 (1 Apr 2022)

Dublinbay12 said:


> Aren't the costs of goods the same across the country? I wouldn't expect there to material cost of living differences across Ireland when you exclude housing in your case.
> 
> I recently sold a 2 bed apartment in a really popular area and development in D4, I did not achieve 550-600k and others that sold in the last year did not either. Maybe in the last quarter things have further increase, however my main driver was that the in the second half of 2021 I found rents reducing in the area and yields dropping.
> 
> ...



Costs for groceries etc can be for sure. There's definitely a big difference in costs associated with eating out etc.

Oh wow so you sold up? Would you not be interested in doing the tenant finding yourself? Or has experience taught you otherwise? I guess you'd want the right people in on a multi year contract ideally. Thanks for the breakdown.



Rasputin said:


> You are in a very envious position. Most of us, if we are lucky, have between 60-80 years on this planet - between school and work, how much of it do we spend on our own ticket.  Mine, and a lot of my friends parents never made it to retirement, or if they did, they were in absolute tatters from a long life of work and have no energy, health or will left to enjoy it.
> 
> Go for it, and make the most of it - 4k a month with no mortgage is a great position that very few people would ever find themselves in. Worst case scenario, you can just get a job when you need to...  if I had your assets, my main goal would be to use it to reduce my stress and working hours as much as I could, otherwise, what's the point of the luck that has come your way.



Thanks man, I'm with you, life is short and it's there to be enjoyed. There's some who think our situation isn't anything special at all and that's the beauty of it I guess, people have different points of view. Obviously, we know our level, we're not going to be buying a new car every three years etc if we made the move, yes our incomes will come down but quality of life would go up and we've a great life as it is but isn't it about trying to make things better where you can ? But as I keep saying, nothing is decided yet. This is all part of the planning.



Cavanbhoy said:


> 4k a month debt free would definitely provide a very adequate lifestyle.
> Comes's down to what is best from a lifestyle point of veiw for your family



Listen I completely agree. If you look at the average wage in the country and the small % of people (I believe it's 5%) who earn over 75K Euro. Yes, you can definitely earn more money in Dublin but you can spend a hell of a lot more too.


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## DublinHead54 (3 Apr 2022)

Ronaldo9 said:


> Costs for groceries etc can be for sure. There's definitely a big difference in costs associated with eating out etc.
> 
> Oh wow so you sold up? Would you not be interested in doing the tenant finding yourself? Or has experience taught you otherwise? I guess you'd want the right people in on a multi year contract ideally. Thanks for the breakdown.



I didn't consider that because I'd still have to pay to advertise the property, hold viewings, get references etc. In the end I sold because I was becoming an accidental landlord and in a post pandemic world I couldn't get the rent I wanted. For reference we advertised at 2,300 (would have been 2,500 pre pandemic) and we're getting offers of 2,000. In the end I sold.


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## Clamball (3 Apr 2022)

I think you are in a great position financially.  Assets of 1.18M.  I would sell and make the move to the country.   Your transport costs will go up but your other costs should go down, commuting, dressing up for the job, eating out, groceries.   Sending you kids back to Dublin for secondary is not something I would consider, mainly because I want to be the main influence on my children, not a boarding school.  

You have done what others have being saying on here, focus on reducing your mortgage and then concentrate on a pension.  If you or your spouse can move to remote work then that would allow an easy transition to the country while maintaining income levels.  

Once you move and have that €4K per month income then focus on pension growth.  I would put that before saving for school or university for the kids.  

I think you are emotionally attached to the area of Dublin where the apartment is and it is preventing you from doing what Brendan suggests.  Either buy for €400K and then flip, or else take the €200K as a gift.   Your kids may never go to college in Dublin, so be happy if they do but otherwise let them make their own path in life.


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## Ronaldo9 (17 Apr 2022)

Clamball said:


> I think you are in a great position financially.  Assets of 1.18M.  I would sell and make the move to the country.   Your transport costs will go up but your other costs should go down, commuting, dressing up for the job, eating out, groceries.   Sending you kids back to Dublin for secondary is not something I would consider, mainly because I want to be the main influence on my children, not a boarding school.



Thanks for this, if we made the move it wouldn't be sending them back to Dublin for secondary, it would be more just for University but I'm just assuming they'd go back to Dublin as both my wife and I are from south dub so that's just a biased assumption on our parts, more so mine to be honest but I agree with you.


Clamball said:


> You have done what others have being saying on here, focus on reducing your mortgage and then concentrate on a pension.  If you or your spouse can move to remote work then that would allow an easy transition to the country while maintaining income levels.



Yes I agree with you. This is the bit we will figure out over the coming months.


Clamball said:


> Once you move and have that €4K per month income then focus on pension growth.  I would put that before saving for school or university for the kids.



Thanks for this. What makes you say that? 


Clamball said:


> I think you are emotionally attached to the area of Dublin where the apartment is and it is preventing you from doing what Brendan suggests.  Either buy for €400K and then flip, or else take the €200K as a gift.   Your kids may never go to college in Dublin, so be happy if they do but otherwise let them make their own path in life.



This is a great point and you're completely right, I am. It's where we grew up and know it very well if we became landlords but the more I think it through, the less sense it makes to actually own it tbh so we have decided to park that idea. You're totally right though, it's emotional.


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## Clamball (17 Apr 2022)

Ronaldo9 said:


> Thanks for this. What makes you say that?



You talk of wanting to retire so the more you can fund your retirement pot now the better off you will be on retirement.  You want a less stressful lifestyle so you may transition into a less affluent lifestyle so you may not have the money later to fund your retirement.  

And your kids should not be raised in the expectation that you can fund their way through college, great if you have the income then but I would not save in anticipation.  There are many reasons why a kid does not end up in university so you might be saving for something that may never happen.  Your retirement should take priority over their third level education.


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## Gordon Gekko (18 Apr 2022)

OP, why do you want to leave your jobs?

In relation to your €1.18m net worth, it’s income that’s relevant and your €250k home wouldn’t be income generating. So we’re talking about €930k, which at 5% would generate a return of €47k a year.

That’s with all the hassle and political risk associated with being a landlord, and in a world where Scum Fein/IRA are in the ascendancy.

This plan is madness. You have two young children, i.e. responsibilities.


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