50 income poor asset ok. Expenses Looming

Perhaps if we look at this another way....

Imagine a bank announcing today that it was offering IO mortgages for BTL property at ECB + 1%. It would be inundated and the advice here and elsewhere would be to fill your boots while it lasted. Holding three such mortgages is a little goldmine.

Don't give it up, Cremeegg!
 
Thanks for the replies.

As regards the different opinions about how risky my strategy was, all I will say is that the big risk in property investment (as a residential landlord rather than a speculator) is not having the cashflow to meet your repayments. I owned 4 of the 5 BTLs (can't believe I wrote BLT, must have been hungry) in 2006 when they were worth as much as they are now. When the value fell that made no practical difference, except I was able to buy BTL5 cheaply. Obviously the rents were weak in 2008 for a few years, that reduced my return obviously.
 
This is why I will not be selling the leveraged properties.

I was lucky to have the opportunity to refinance everything on good tracker rates, I had the sense to know a good opportunity when I saw it.
 
Thanks Bronte for your input.

I have not kept accounts but I would say that the cost of college was about the €10K, that includes accommodation outside of Dublin.

I intend/hope to stop work when my youngest becomes independent about 6 years. I will then be in my early 60s so have the option to continue for a few more years.

We have each paid class S PRSI on the rental income for 20 years so I believe that we will qualify. I would be glad if anyone has any experience on this.

The expenses are not huge insurance bins, some repairs, Tax is by far the biggest take from the income.

The home loan ends in 7 years. I am at the stage where thoughts of a 'forever' home are turning to 'downsizing for retirement'. The possibility exists of selling the home and living in BTL1 at some stage in the future.

The expenses on each property are probably less than €1,500 per annum. Having just renovated one, they are all in a good state of repair. There are no particular expenses involved with any. Tax is at 50%
 
The question about college was for my own information !!

You should contact the PRSI people in Donegal or Sligo, I forget which and get them to send you a copy of your PRSI records for both you and your wife, they are lovely to deal with and can give you advice on how or if it is possible to buy back years.

What's you aim on the two IO loans? You don't want to be in a situation of being forced to sell if the market should tank, timing could catch you out. But having said that you've enough equity in the other properties.

90 - 7500 = 82,500
No mortgage on BTL 1
BTL 2 1500 (is 100% deductable now I think)
BTL 3 1560 (is 100% deductable now I think)
BTL 4 14K, interest 2K @100%
BTL 5 zero

Rent 90 less expenses 7500 less mortgages = 65K
But tax must be 82500 - (1500+1560+2000) = 77440 @ 50% = 38K to revenue. Yikes. Thank goodness I'm non resident. But you're pulling in 27K. (very rough figures). Also you're paying off BTL 4 and putting up 2 prsi stamps.
 
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For some reason, I always though cremeegg was female.

Askaboutmoney is always very conservative in advice. They don't want anyone to go broke. But as we know more risk means more potential reward. But it also mean more people go broke. That said, you only have to get rich one, and then stay rich.

Having a plan for dealing with the IO mortgages which fall due in 8 and then 11 years is the key thing here imo / deciding till what age you want to remain a landlord. If property prices fall dramatically again around that time, and if you are unable to remortgage, you could end up in a hard place / forced sales etc.,

I'd second the suggestions for building up some investment wealth outside of Irish property, and also using pension tax relief.

To your question of unlocking some money, clearly, it looks like you have to sell something to do that.

If you sell any with the cheap financing you give up ten years of leveraged income, you have to weight that against the CGT savings.
 
cremeegg said:
Thanks Bronte for your input.
Click to expand...
It's always good to get a second opinion. You will own the home in 7 years, and you can sell that to pay off BTL 2 & 3 leaving you rental income from 4 properties when you move into BTL 1. I think you need to seriously think about timing, to buffer that can you save more. I'm guessing you can when your youngest is finished in 6 years.
 
I suppose I'm just wondering what your plans are for retirement and if you would have much debt on retirement or just sell properties which are mortgaged at that stage eg in 10 15 years time
 
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