Releasing equity from my home: what are my options?

[IanD]

I bought my home for €200000 four years ago as a first-time buyer. It has since increased in value by about €170000 and I am seriously considering getting an equity-release mortgage and buying one or maybe two apartments for rental. Our mortgage repayments are low and we could accomodate up to a 100% increase. Is this a good idea or is there something smarter I could do with this equity? Any thoughts yould be much appreciated.

 

[GreatDane]

Hi Ian,

Be very aware, the level of income being generated by many Irish apartments has fallen in the past 18 months & is likely to fall further, as a result of significant numbers of new apartments currently under construction.

If you go this route, be ready & able to service not just the loan repayments on your increased homeloan,but also:

- void periods if no rent is generated on the apartments

- management fees on the apartments, which can run up to €2k per unit, per annum

Also, be conscious of the fact that apartments tend not to increase in value, at the same rate as houses for the majority of instances ...

Not wanting to rain on your idea, which in many respects is probably a good one, once your satisfied you can comfortably manage the increased level of debt

Cheers

G>
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