Has any investor managed to pay off entire mortgage investment property?

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moneymakeover said:
If there is no debt and no mortgage then it becomes profitable
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This is false.

Profit = gross rental income less interest less other expenses (e.g maintenance).

The repayment of capital is not an expense.

The repayment of capital is saving, it is not a cost.



Think about it, you only pay tax on profits. Therefore, if you are paying tax, then you must be making profits!!!
 
Protocol said:
Like many Irish landlords, there seems to be a confusion here between cashflow and profits
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And the debt is paid off
Like many contributors in AAM there seems negativity towards property investment

Thanks for all the insights

Couldn't do it without you
 
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moneymakeover said:
I'm interested to hear from anyone who has paid down the investment mortgage loan and now owns the property free and clear.
And if it made a big difference to your life
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I think the issue you've run into relates to the type of poster you'll find on AAM.

As you've probably noticed from the replies, a lot of posters here aim to maximise wealth so would champion a different approach to what you are proposing.

As it's unlikely you'll find many people who can relate to your approach perhaps a different online forum would better suit your query. Of course the problem there is it's always possible non-AAM forums may have posters who are equally focused on wealth maximisation.
 
moneymakeover said:
Doh
If there is no debt and no mortgage then it becomes profitable
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Duh. According to you it hasn't been profitable up to now so is likely to be a bad investment unless capital appreciation is all that you're depending on. Read other people's posts more carefully and maybe open your mind.

On the other hand it sounds like you don't even know whether or not it's breakeven or profitable and yet you post looking for advice only to respond to comments by dismissing them with arrogant passive aggression for some reason. Whatever...
 
moneymakeover said:
5 years left but I hope to clear it sooner
Rate is 3.75%
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I plugged those figures in a calculator and I get 1464 per month.

So going with the few figures you have posted - very much back of an envelope calculation here.

Gross rental income: 24k
Mortgage interest: 3k
Insurance, repairs, fees etc (say): 3k

Total costs :
Tax: 9k
Mortgage interest / insurance / repairs 6k

Net profit on rental income: 9k

Rental yield (based on outstanding mtg) is around 30%. You haven't told us the market value of the property.

I'm thinking you would be well advised to follow your chosen username and do an actual money makeover.

There's lots of smart folks here who can give advice.
 
moneymakeover said:
Folks I appreciate your interest but you're not answering my question
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moneymakeover said:
I guess my original question was about property investment and going from having a mortgage to being mortgage free
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moneymakeover said:
And you not answering my question
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moneymakeover said:
Read the original question
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If this is the key or only question that you want feedback on...
moneymakeover said:
Just wondering if anyone here paid off their investment property loan entirely?
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then the answer is "yes". Case closed.

But then you moved the goalposts...
moneymakeover said:
The idea was to share experience of what it's like to finally pay off the investment mortgage
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moneymakeover said:
What should I be doing?
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I really don't understand what you are looking for. Plenty of landlords have paid off their mortgage early or at the end of the term and now just own the property. It's not that relevant to you.
Do you have the money to pay the mortgage? If so do you have a better way to spend it or invest it? Would it be in your PPR or your pension or anything else? If not, if you pay your mortgage, you increase your profit by about €1500 as you don't pay interest on your loan (even if it's tax deductible, interest is still a cost as you save €1500 in tax because you paid €3000 in interest) and your monthly cashflow. With an increased cashflow, you might have the ability to invest in something else or you might decide to increase your lifestyle. That's really up to you and your priorities.
 
Yes and I wouldn’t get excited over it. The returns are not great given the costs and risks. If I could do it all over again I wouldn’t buy a BTL. I’m afraid to review the cash flow including the years of high interest only mortgage payments at 4.5%. The costs of revamping kitchens and bathrooms is high and will easily wipe out a years profit. Then you have the RPZ nightmare where everything rises except the rent. I’d probably have put the money in a pension instead and sleep would come easier.
 
I know
Premos said:
With an increased cashflow, you might have the ability to invest in something else or you might decide to increase your lifestyle. That's really up to you and your priorities
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I guess my point is, currently and for past 20 years I've had zero additional cash flow
In about 3 years that will change to about 16k pa cash flow after tax. Not life changing. Not significant. Nice to do it twice. That would make a difference.
 
January25 said:
Then you have the RPZ nightmare where everything rises except the rent. I’d probably have put the money in a pension instead and sleep would come easier.
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Yes all fair points

Things about property is I was locked into it and just kept plugging away. Rain hail or shine.
 
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