Pay off entire mortgage investment property

[moneymakeover]

What interest rate are you paying & how many years left?

5 years left but I hope to clear it sooner
Rate is 3.75%

 

[Brendan Burgess]

Rate is about 3.5%

So, after tax, it is 1.75%

You are very likely paying a much higher rate on your home loan.

 

[moneymakeover]

I guess my original question was about property investment and going from having a mortgage to being mortgage free
And that will make the enterprise profitable for the first time

 

[moneymakeover]

So, after tax, it is 1.75%

You are very likely paying a much higher rate on your home loan.

I take your point @Brendan Burgess
Numerically better to pay down the home loan first
Because of the tax break on the investment

But there's only 20k left on the home loan
And the bank is happy if I pay that back slowly 200 per month

 

[moneymakeover]

After the investment mortgage is paid off I can accelerate the home loan

Or just have more spending money

Or invest in something else

 

[DannyBoyD]

After the investment mortgage is paid off I can accelerate the home loan

Wrong order in my opinion, but its your cash.

 

[moneymakeover]

Wrong order in my opinion, but its your cash.

Correct, my cash
And the approach is correct too
And you not answering my question

 

[moneymakeover]

Just wondering if anyone here paid off their investment property loan entirely

For attention of Danny Boyd

 

[ClubMan]

And you not answering my question

Can you clarify what specific question you're referring to?

 

[Fortune]

that will make the enterprise profitable for the first time

How are you paying tax on it if it's loss making?

 

[moneymakeover]

How are you paying tax on it if it's loss making?

After tax it breaks even

 

[Fortune]

After tax it breaks even

So you're ignoring the increasing value of the property net of debt each month?

 

[moneymakeover]

Just wondering if anyone here paid off their investment property loan entirely?

It's a general question. Not a specific "should I do this or that"

Thanks to Persia
And Premos for answering

The idea was to share experience of what it's like to finally pay off the investment mortgage. And to finally reap some reward from all the effort. The other way to get a reward would be to sell it
Another way would be to re mortgage, taking out some equity.

 

[moneymakeover]

So you're ignoring the increasing value of the property net of debt each month?

I believe so. What should I be doing?

 

[Brendan Burgess]

I believe so. What should I be doing?

You probably shouldn't be investing in property as you don't seem to have grasped the difference between interest and capital.

 

[moneymakeover]

You probably shouldn't be investing in property as you don't seem to have grasped the difference between interest and capital

We're still friends?


:⁠-⁠)

 

[ClubMan]

And to finally reap some reward from all the effort.

If an investment property is only breakeven and not generating a net profit/income then the money could probably be invested better elsewhere. Otherwise you're pinning all your hopes on capital appreciation only.

 

[moneymakeover]

If an investment property is only breakeven and not generating a net profit/income then the money could probably be invested better elsewhere. Otherwise you're pinning all your hopes on capital appreciation only

Doh
If there is no debt and no mortgage then it becomes profitable

Read the original question

 

[Protocol]

So when I have 24k in rental income and almost zero offsets, insurance, repairs, management charge.

24k in gross rental income less 3,000 in interest, means rental profits of 21,000 per year (before any other expenses).

This is massive profits, yet you describe it as "breakeven".

Like many Irish landlords, there seems to be a confusion here between cashflow and profits.

 

[moneymakeover]

So glad to be in the presence of financial geniuses
Explain it to me again
:⁠-⁠)