Investing in property with pension fund

L

Lucy83

Registered User
Messages
10
Hi,
I’m just wondering what people’s view is on investing in property with pension fund? I’m in my early 40s and have about €200k in a low risk fund at the moment. Currently putting €1400 per month into pension.Fund is currently making 3-4%. Pension adviser said returns with property would be around 10% or so, and that if property is ever sold there would be no CGT to be paid. The scheme sounds to go to be true, is there something I am missing? Given the current volatility in the market would now be a good time to diversify?

Thanks,
Lucy83
 
Lucy83 said:
I’m in my early 40s and have about €200k in a low risk fund at the moment.
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Why low risk? Sounds inappropriate for you age.
Lucy83 said:
Pension adviser said returns with property would be around 10% or so
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What sort of advisor? What sort of crystal ball do they possess?
Lucy83 said:
Given the current volatility in the market would now be a good time to diversify?
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Impossible to comment without more information about your overall personal/financial situation such as a money makeover would provide. We have no idea what your level of diversification is right now. Or even what your low risk pension invested in.
 
Hi Clubman,

Thanks for the reply. I’m currently invested in the Aviva multi asset passive ESG passive plus 3 fund.It a mixture of 50% bonds, about 30% equities, and 20% alternatives assets. I’m probably classed as risk adverse so that’s probably why I’m in the fund I’m in. Pension was set up by work and advisor is part of company that set it up. I didn’t pay anything for this advice, so that’s probably why I’m unsure how “ independent” the advice is. Currently looking to purchase first home so no debts or dependents.

Thanks,

Lucy83
 
Lucy83 said:
Currently looking to purchase first home so no debts or dependents.
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You should be focusing on that rather than your pension so.


 
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Lucy83 said:
Currently looking to purchase first home so no debts or dependents.
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Your pension fund of €200k won't be much help to you in buying a home. If you are making contributions which are not matched by your employer, then you should pause them until you have bought a home.
 
Your pension fund should be 100% in equities. There is no need to be risk averse as I assume you have at least 25 years to go?

You should not invest in property through a pension fund. When it goes wrong, it goes very wrong. When you own a property directly, there are a lot of hurdles to jump trying to get the property back from a non-paying tenant. Insert a pension fund and trustees between you and the tenant, and you are at least doubling the difficulty.

For example, a friend of mine was telling me that his pension fund's tenant had stopped paying rent, and the trustee or manager hadn't told him and the arrears built up. There was very little he could do about it. It was very expensive to resolve.
 
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