I don't think this has been covered before, if it has please point me to the appropriate thread with apologies!
I'm an accidental landlord and considering exiting and investing in the stock market instead as the red tape and complications of being a landlord are tiresome. Would appreciate a second look at my numbers to see if I have missed anything:
Two properties - Total Market Value ~€650k
Current total rent less expenses ~€34k (much less than market rate due to the rent controls)
Gross Yield = ~5.2%
After Tax ~2.6%
And Irish property typically increases by 2.6%pa (https://www.finfacts-blog.com/2018/07/irish-real-house-prices-up-175-in-50.html).
So 5.2% net per annum.
If I sold after paying last of the mortgage (€100k) and CGT I would have c. €520k to invest. I'm making the assumption you can't time the market, would buy a diverse portfolio of shares and hold for the long-term. Based on historical figures:
Stock market typically increases by 10% pa less inflation = 8% and ultimately would be paying 33% CGT on that.
So, 5.3% average.
What mistakes have I made? Obviously based on a lot of assumptions!
One complicating factor is the €100k mortgage is a 0.85% tracker on one property. So perhaps based on the above, I should sell one and hold the one with the tracker?
Appreciate any replies.
I'm an accidental landlord and considering exiting and investing in the stock market instead as the red tape and complications of being a landlord are tiresome. Would appreciate a second look at my numbers to see if I have missed anything:
Two properties - Total Market Value ~€650k
Current total rent less expenses ~€34k (much less than market rate due to the rent controls)
Gross Yield = ~5.2%
After Tax ~2.6%
And Irish property typically increases by 2.6%pa (https://www.finfacts-blog.com/2018/07/irish-real-house-prices-up-175-in-50.html).
So 5.2% net per annum.
If I sold after paying last of the mortgage (€100k) and CGT I would have c. €520k to invest. I'm making the assumption you can't time the market, would buy a diverse portfolio of shares and hold for the long-term. Based on historical figures:
Stock market typically increases by 10% pa less inflation = 8% and ultimately would be paying 33% CGT on that.
So, 5.3% average.
What mistakes have I made? Obviously based on a lot of assumptions!
One complicating factor is the €100k mortgage is a 0.85% tracker on one property. So perhaps based on the above, I should sell one and hold the one with the tracker?
Appreciate any replies.