# Buying Extra Property



## CMoore73 (7 Apr 2008)

*Age:*
37
*Spouse’s/Partner's age:*
35

*Annual gross income from employment or profession:*
E50,000
*Annual gross income spouse:*
E51,000

*Type of employment:*
Both private sector employees


*Rough estimate of value of home*
E475,000
*Mortgage on home*
E220,OOO
*Mortgage provider:*
AIB
*Type of mortgage: Tracker, interest only, fixed rate*
Tracker
*Interest rate*
 tracker of 4.75% - 
*Other borrowings – car loans/personal loans etc*
Car 28,000
*Do you pay off your full credit card balance each month?*
Yes

*Savings and investments:*
E16 savings. E32,000 shares
*Do you have a pension scheme?*
Yes we both have company pensions.I pay E320 extra pm and my wife paye's 350 Extra pm

*Do you own any investment or other property?*
Yes Mortgage E280,000 interest only. Value E375,000.
Rent 1,100.Have to pay E200pm to cover the costs
*Ages of children:*
None.


My self and my wife are thinking about buying another property ,value E370,000, we can get approx E1350 pm .So we will have to add to this to pay the Mortgage(E150pm).The same type of property in the area is going for around E380,00-400,000. Iwould like some views on what we are doing.
Cheers
CMoore


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## Mr DT (8 Apr 2008)

So at the moment you have an investment property that you are losing money on each month? Your % monthly yeild is negative and you are not paying off any of the capital. 

You are also looking to "invest" in another property that won't cover its monthly cost never mind give you a return? 

Therefore you are in this for capital appreciation which could be viewed as a risk strategy. To be honest, in my personal opinion, I think you are mad. 

Would the bank lend you money for this investment strategy?


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## Aesop (8 Apr 2008)

CMoore73 said:


> *Do you own any investment or other property?*
> Yes Mortgage E280,000 interest only. Value E375,000.
> Rent 1,100.Have to pay E200pm to cover the costs



I don't understand. If you mortgage is interest only on the above property how come you have 1300 euro on costs every month. Interest on a 280,000 euro mortgage should be a lot less than that?


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## CMoore73 (8 Apr 2008)

Sorry the mortgage is 1,125pm + 1.550py management fee.
Cheers
CMoore


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## paddyodoors (8 Apr 2008)

A very simple look at this at a high level shows, if allowed, that you would clearly be taking a huge risk:

Total combined salary of €101k
Total debt of €898 

(220k PPR+280k Inv1 + 380k Inv2 + 28k Car loan).

Your 1st investment property is already losing you money, why would you want to increase your exposure to the same area?

DIVERSIFICATION

Paddy


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## ccbkd (11 Apr 2008)

My advice is use surplus savings to pay some of the capital of PPR or may pay-off car, you are paying a high risk game at the moment trying to amass property when it is in many ways a falling knife. My advice is clear your debts first and maybe later think about investments.


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## AmIok (15 Apr 2008)

Who has valued your current investment property at €375,000?  I would be concerned that this valuation is old or sentimentally biased by you.  Has an equivalent property sold at that value recently? Asking prices are not good enough in the current market, especially for apartments, and most especially for apartments in certain areas over others.


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