Average salary, borrow to buy a commercial property?

galway_blow_in said:
sarenco , even when the yield delivered on the investment far exceeds 5.45% ?
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The yield is the yield regardless of the cost any debt associated with the property.

Institutional CRE investors can borrow money at a fraction of that price - it's expensive money whatever way you look at it.
 
Sarenco said:
The yield is the yield regardless of the cost any debt associated with the property.

Institutional CRE investors can borrow money at a fraction of that price - it's expensive money whatever way you look at it.
Click to expand...

institutions dont buy small modest properties in the first place
 
By moving your money into the account, you have said it's with the intention of paying down some loans, this is not a bad thing.

The issue here however is, you have also shown your intention, by your detailed research, into purchasing another investment vehicle.

IMO this, and this is the crux of the post, reduces the strength of your hand when it comes to borrowing, and you seem to be focused on this venture.

If you are happy with your lot at that stage, then, commit to paying off vigorously.


Paying down the car loan is a no brainier in any circumstance where the interest rate is off the wall.

I borrowed once for a car, and it only ever be the once.
 

Well in fact 6.74% isn't all that high for a car loan, was doing up my new house when I took it out so money wasn't as plentiful
 
just an update , i paid off the remaining 6500 loan balance ( 30 k borrowed ) on a jeep i bought in 2013 , this was @ 6.74% and unsecured

took a while to transfer the outstanding 45 k to ulster bank from bank of ireland , i now intend to pay off this ten year loan ( rate of 5.45% ) which is secured , i spoke to my accountant and he agreed my interest write off would not be substantial , he argued i would be using cash i might otherwise perhaps use to buy another property but agreed that due to previous capital losses , owning equities is probably a better idea for now than an income producing property which would bump up my income tax bill

decided to retain a fair degree of cash for both emergencies and opportunities in the stock market so after all debt is paid by end of this week , my balance sheet will be

commercial property ( hopefully worth the 120 k i paid for it ) delivering a grand per month NET

farm let out on a long term lease delivering 6 k per annum tax free

day job earns me 34 k per annum ( im a driver )

130 k in equities ( 70% in index u.s domiciled funds , 13% in the ishares investment grade corporate bond fund and 17 % in a few companies ( one energy , two autos , one telecom and bank of ireland ) which i bought in the past eight days , i already owned about 50 k in equities , whatever about growth , this should deliver about 3500 per annum gross in dividends based on yields of the securities involved ( il worry about the taxes afterwards )

im retaining 50 k in cash as i work in the private sector and also would be willing to spend about 20 k on stocks if we entered a bear market , all in all im pretty happy with my situation , the limerick investment was very worthwhile but i would not invest in residential property again , the commercial property causes zero hassle so i see myself keeping it for years assuming its no vacant

thanks again for all the views
 
Fair play for the update, Above look rather healthy reading to me.

Just curious on the Bank shares, its been niggling away for months if not years, but I see you bought BOI shares. Every one is, and has been going on about AIB being the darling of the banks, Yet with my limited knowledge, it amazes me why, BOI needed much less capital injection than AIBs massive bail out, yet its only a miserable 25c/share as against €5 with AIB.

It probably make sense to everyone else, but, its why I stick with property.
 

i bought less than 3 k worth so i see it as a bet on the irish economy , i paid 23.5 cents , ive owned shares ( on and off ) in bank of ireland all the way back to 2012 but owned none going into the brexit vote which was a relief , only really made money from 2012 to end of 2013 , they werent large investments at any stage

the PE and book value of bank of ireland appears about at the same level as many european banks but ireland is doing better than most european countries
 
That looks like a sensible, balanced approach to me.

Reasonable split between property and business holdings, with a chunk of cash reserves that will hopefully see you through any tough times.

Getting the "big picture" right is far more important that the details of any individual investments.
 

this will sound funny too but i always used to check the prices of my equities at the end of each day , last week i checked on tuesday and not again until the weekend , have not checked yet this week , checking equity prices often is not only unproductive , it wrecks your head , if there is a black monday situation , il hear about it on the news anyway and will be able to pick up some cheap assets , i think retaining 50 k in cash is wise , you never know when income might dry up even without a mortgage , always money to be spent on homes , cars , even poor health could arise etc
 
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