Finance new BTL property using equity on existing?

galway_blow_in said:
No way of categorically knowing that the tenant you choose will stay straight forever, such is the level of powerlessness you then have that it renders the endeavour very risky if taking on debt, I could probably buy a btl again now for 190 k by borrowing 100k but instead I'm going to spend the 90k on an energy stock paying 6.5% of a dividend, yield is as good as the two bed apartments available and I can cash out if I want to buy something or just need the money, I've two properties already so probably have enough bricks and mortar anyway and perhaps important, one of my properties is a commercial so if the tenant left, I'd have more difficulty replacing the tenant or selling.
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I have never heard the like of it.

Property is too risky so you’re thinking of buying high yielding energy stocks?

I’m lost for words.
 
I’m not seeing the risk here. OP is an experienced landlord and has paid down two mortgages. He will have rent from three properties to pay the mortgage on the new loan. Even if he had a non paying tenant he would be able to pay the mortgage. If property prices collapse it is irrelevant as he doesn’t need to sell. Rent would need to go catastrophically down to have an impact. The Irish population is heading quickly to 5 million, (RTÉ radio yesterday) there’s hardly a house being built in significant numbers so rents will stay high for the foreseeable future.

OP also has cash. And an income free employment.
 
Gordon Gekko said:
I have never heard the like of it.

Property is too risky so you’re thinking of buying high yielding energy stocks?

I’m lost for words.
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Really?

I compared the purchase of a BTL with two thirds debt against a high yield large cap company with only cash.
 
Bronte said:
I’m not seeing the risk here. OP is an experienced landlord and has paid down two mortgages. He will have rent from three properties to pay the mortgage on the new loan. Even if he had a non paying tenant he would be able to pay the mortgage. If property prices collapse it is irrelevant as he doesn’t need to sell. Rent would need to go catastrophically down to have an impact. The Irish population is heading quickly to 5 million, (RTÉ radio yesterday) there’s hardly a house being built in significant numbers so rents will stay high for the foreseeable future.

OP also has cash. And an income free employment.
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All of that is true but the big risk is if you are landed with a rogue tenant, two years to evict
 
Gordon Gekko said:
A single energy stock paying 6.5%...
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I'm not allowed name it but there are three European energy companies paying in excess of 5% right now as stocks have corrected quite sharply this year.

I can earn more cash from putting 80 k in this stock than I can putting 80k into a BTL costing 180 k after mortgage payments, to me that's lower risk but neither are of course good examples of diversification
 
galway_blow_in said:
I'm not allowed name it but there are three European energy companies paying in excess of 5% right now as stocks have corrected quite sharply this year.
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I’m well aware of their existence. However, there is a school of thought that they are value traps of the worst kind. I would see those as way more risky than buying a property here at a circa 6% yield.
 
Gordon Gekko said:
I’m well aware of their existence. However, there is a school of thought that they are value traps of the worst kind. I would see those as way more risky than buying a property here at a circa 6% yield.
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Yes there are lots of cliches abound in the world of financial markets commentary.

Value trap is usually reserved for a company which has suffered very large losses yet was once a big fish, GE might be a good example?

Company I'm referring to has not cut its dividend since WW2 but its stock price hasn't ever plummeted, no one knows for sure, all risk assets.
 
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