have we done enough for retirement

At 61 I am semi retired as self employed builder and am thinking of one final building project this time using the banks money-- I would appreciate advice as I usually use my own funds and a very small amount from bank.
my situation is as follows.(Its a bit long)

savings €165k some invested in bond some in credit union.
property as follows.

family home value €280k no mortgage.

2 bed house, rental income €6500 no mortgage.(set in grounds of own house so selling not a option)

3 bed cottage value €200k rental income €6500 (paying 2 ssia till may)

4 bed detached house value €300k rental income €7000 (rent is paying off loan will be finished in Feb)
another 4 bed same value with loan of 25k over 5 years(4 years remaining) rent is paying this off
.
Also own 2 sites with planning value approx 150k each which can not be built on for 2 years due to sewerage work in area.


our income is €635 per month from bond investment and rental income.
I have no pension.
I now have the opportunity to buy a site next door to family home for 70k which I will build a house to sell also want to buy a cottage and repair it this will cost 100k.
I have talked to my bank they will lend me €160k towards site and house build to be repaid in 2 years after house is sold.
They will lend me 75k for cottage over 10 years with repayments of €816 per month. my question is should I start borrowing at this time of my life.

I look on the property as my pension/security for old age, my wife is 57 and does not work outside the home our family are grown and settled.

You already have 4 investment properties providing a good return, why do you feel the need to take on the extra risk?

The main problem with taking on additional loans for property is your lack of diversification - what if the property market crashes and you cant sell the houses??

What do you hope to achieve by doing this?
Is your current income not sufficient?
What about your future income:

In Feb your income will increase by 7k pa once that loan is gone
In May your income will increase 6.5k pa once ssia matures

This alone equates to extra income of over €1000pm, not including the 40k from the ssia.

In 4 years time the 4th property will generate additional income again, not to mention the 2 sites for current vl 300k......

Seems to me you should stick your feet up and relax.

I would say tho that it would seem that your 165k on deposit is not generating a very good return - 3%pa (available at NR/Rabo) would equate to 400pm + current rental 6500 = 900+pm income - your current income of 600 seems short.

thanks Paddy,
on paper it seems a lot but I have visons of us both needing nursing home care in the future so feel the need to have a property for income/to sell and I keep reading about large pensions people have for retirement

I would say the combined value of your current investment properties represent a sizable pension fund amount - 4 inv props and 2 plots of land, plus 200k in low return bonds + soon to be available ssia.

However that all depends on your point of view.....A lot depends on your lifestyle requirements - how much nursing home fees are, how much you want to leave behind.

Outside of the inv props, the land you can sell for 300k is gonna pay for a fair few years of nursing....

Personally I would offload the land and with the deposited monies + the SSIA cash, find a more suitable, higher yielding home - that way if rents lower, you still have a reasonable and consistent income - if they dont you will have a much larger consistent income.

Out of interest what size are the pension funds you mention - how much p.a. is the income projected at and for how long?

I would sell my current home because it would be tax free and I would build my new home on the site next door. There would be money left over and I would use that to fund my next project.
You are only 61 and 57. It is far too young to retire. You have many good years and many good projects left.

Regarding future projects, The Interest part of future Investment Loan Repayments can be offset against your Ongoing Tax Liabilities for your Ongoing Rental Income.

In general, what to do ? Thats down to lifestyle for when you retire and where you retire to.

woods said:

You are only 61 and 57. It is far too young to retire. You have many good years and many good projects left.

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61 too young !! If I could retire at 40 I'd be gone If you've seen all the great countries of this world, and have no hobbies and will be bored stiff, then keep working. Otherwise forget the work, try considering renting out your house & going to live in a cheap warm country for a while, go to Latin America for volunteer work, I'm sure they'd be delighted to have the expertise of a builder, or go rent a small villa in Spain. I'm sure your costs there would be less than your rental income for your main house here.

lukegriffen said:

61 too young !! If I could retire at 40 I'd be gone If you've seen all the great countries of this world, and have no hobbies and will be bored stiff, then keep working. Otherwise forget the work, try considering renting out your house & going to live in a cheap warm country for a while, go to Latin America for volunteer work, I'm sure they'd be delighted to have the expertise of a builder, or go rent a small villa in Spain. I'm sure your costs there would be less than your rental income for your main house here.

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By all means do that but it will not beat the thrill of the next deal.