They have a good tracker rate, is clearing the mortgage the best option?
i would not pay off any loan with an interest rate below 3.5% , its not often someone has a hefty amount of capital at their disposal , its all very well being ultra conservative and paying down debt and using terms like " risk reward on an adjusted basis " but no one ever grew their wealth by always choosing the most safe option , you should put your money to work in some shape or form IMO
So, your suggestion is?????????
Thanks guys , we did consider paying off the mortgage but at 1% its cheap money. We have considered options for a year now and spoke to a couple of family members in the finance field. Between advice received here and our own research it was a toss up between buying an investment property or the 5 year State Savings.
My wife suggested we visit a financial adviser but I wonder what they could bring to the table aside of what is mentioned here.
Some very interesting posts thanks all , going to have a read up on Investment trusts and commercial property. I was reading about property investing and came across IRES- REIT , I can't find the yield on this? , does anyone recommend these as an alternative to purchasing a property directly ?
Some mixed messages there? You're advising now against investing in a single sector, but a few minutes ago you'd borrow even more money to buy a commercial property. I understand concerns about management fees, but unless you've enough money to invest in a fairly large property portfolio I'd consider it a good way to get some exposure specifically to property without taking on massive risks?i would be slow to invest in REIT,s , its really the same as buying a stock but you are entirely in one sector , you would never know how much the managers of the trust were awarding themselves , yields are very low in the irish ones , they are very new to this country , if your only getting 3% , you might as well just invest in a broad based fund which delivers the same yield but with proper diversification
IRES is a residential REIT , GREEN is the reit which focuses on commercial property , hibernia is another one , it has a mix of both , think friends first have a reit too
Re IRES-REIT, have a look here https://www.bloomberg.com/quote/IRES:ID
12 month total return is c. 23.5%, and dividend gross yield 3.66%
Without getting into a discussion about specific shares, one of the benefits of a REIT investment over investing directly in property is that it's spread over several properties. You're not dealing with the risk of a single tenant not paying rent, void periods, or any of the general stress of being a landlord (but you are paying someone else to do it for you).
One of the downsides is that while the value has moved in the same direction as the property market, they haven't increased as much as general property prices.
One of the rules of a REIT structure is they have to pay a certain amount of their rent income as dividend each year - in your case you'd only be paying 20% tax on this at the moment, but if you get into higher tax bracket it'll be taxed at the higher rate.
Do a search on the forum for REIT and you might find other discussions. As with all investments, you'll need to be comfortable that you could lose some of your capital value.
Some mixed messages there? You're advising now against investing in a single sector, but a few minutes ago you'd borrow even more money to buy a commercial property. I understand concerns about management fees, but unless you've enough money to invest in a fairly large property portfolio I'd consider it a good way to get some exposure specifically to property without taking on massive risks?
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