<gulp>
Thanks, I think I saw numbers I used based on some other folks experiences, but RIAI sounds more reliable. Might be better off just knocking it all and starting again.
Big picture, I guess we can afford it, or we can shrink the project.
<gulp>€400k for that level of work in Dublin looks like a pretty tight budget to me, particularly if you are going for a high spec.
2019 RIAI Consumer Cost Guidelines (ex vat): Extension - €1,900 to €2,300 per sqm / Renovation - €1,800 to €2,000 per sqm.
So, €460k to €530k (ex vat) for your project.
Thanks Steven. Yes, will do.Prices are going through the roof at the moment and only going higher. Builders can't get tradesmen, who's prices are only going higher. supply of materials going up. I was told as a rule of thumb €1,500 per square meter if single story extension, €2,000 if going for 2 storey. If you want it high spec or there's anything complicated, it's going to be more.
Get a QS to do the cost before you put it out to tender.
Great, we've solved the OP's problem
Hi AGoodLife,
As a slight aside, I do not have private health insurance preferring to have created my own fund by saving the would-be premiums in a dedicated account to be drawn upon when necessary.
This has worked effectively for over 25 years, with a tiny fraction spent on private healthcare compared to the premiums saved.
You're in a strong financial position so I would consider this if you haven't already done so.
Have you exhausted all options with your employer for additional ER contributions. Is there an option to have your bonus/performance paid as ER pension contributions? Care would have to be taken that it is not deemed a salary sacrifice and taxed as a BIK. My understanding is that it has to be at the employers discretion to choose the type of payment, i.e. you cannot request it to be paid as a pension contribution or it would be deemed a salary sacrifice. Some contractual renegotiation would be required
Still difficult to do as the basis of how the bonus is calculated is set down in the contract. By giving your employer discretion, you are in effect giving them permission to give you no bonus and you have waived your contractual right to receive a bonus if certain metrics are met. You'd be crazy to give up those rights.
Also, for larger organisations, there is no way HR are going to get into that as once one person does it, others will too and it just becomes messy. It is also more likely to attract the attention of the Revenue and they may ask to examine all these new contracts that the employees now have and roll them back.
-contribute beyond tax relieft to pension (If I retire early, I understand that I might never be able to use the carried forward tax relief, but at least tax free growth)
this relief is only from the source of income in respect of which the contributions are made.
@NoRegretsCoyote Are your ordered preferences, 1. putting extra money into pension (unlikley to get tax relief on it), 2. pay down mortgage, 3. buy shares, 4. buy another rental.
At what size portfolio do you think a second rental makes sense?
I'm over the community rating threshold so it would be too expensive to enter the health insurance market.Do you plan to purchase a policy as you/your family age, to hedge against increased risk? (and bank your profits?)
It's also worth bearing in mind there is no private children's hospital or beds and no private orthopaedic serviceDo you plan to purchase a policy as you/your family age, to hedge against increased risk? (and bank your profits?)
Well not really, only deferred it for a year, there is still the 'problem' of after the renovation spend, where to put the 150k p.a.
Remember, there is a difference between having a large income and being wealthy. There are lots of people with incomes similar to yours who are not wealthy as they have spent it on expensive houses and lifestyle. Build wealth and you will have lots of options.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
You are misunderstanding me. You accumulate now to spend later. In the industry, we use the term "financial independence" but what we really mean is being rich. If you accumulate wealth, you have choices. You can retire earlier, you can change to a less demanding role, help out the kids, go on more holidays.thats an interesting point Steven, the other side is whats the point in earning lots of money if you dont get the enjoyment / benefit from it, because wealth generally gets passed on !
i am all for some fiscal prudence, but the recent past has also reminded me that tomorrow is promised to no one!
Thanks DublinBayWell done Op on being in such a great position! I also like the spouse earning 50k whilst working part time! I hope to be in your position in my 40s.
The only observation I can add is after watching years of home renovation programmes the majority go overbudget.
Thanks NRC!For you I would:
- Pay down mortgage
- Put extra into pension
- Buy a rental
- Buy an ETF
I understand the rationale behind most of these, but not the last point, is that just for convience? Same development seems to concentrate your risk?Your income is big enough to weather a dud tenant easily.
To me a rental portfolio makes sense in some or all of the following circumstances:
- You have the benefit of a tracker and/or sheltering a CGT loss
- You have time and resources to do maintenance and even renovations yourself
- You or a spouse has no other earned income and can accumulate pension entitlement with Class S PRSI from rental income
- You are in a high-yield area (as in 10% or higher), usually apartments
- You can acquire more than one property in same development
I think that is very pragmatic advice. We have about 400k with cash+stocks today, but even the rough estimates here, imply we might need 600k. (Writing down 600k for a renovation just sounds so ridiculous, I have trouble believeing it). But that means I likley need to accumulate another 150k over the next 12 months, i.e. I dont need to make a decision on where to put my money today, I just need to keep saving it.Get your renovations done first and wait and see how much cash you have after that.
Pension is Maxed, cash reserves in place, and this should hold through our renovation.Max out your pension each year.
Build up a cash reserve that you are comfortable with.
Pay down your mortgage asap
Build up an investment portfolio with the rest.
I take your point that I don't need to rush. But, don't the current yields imply the prices are not crazy? And don't I get a better return on cash if I take mortgage with it. There is also the point, that I could potentially buy a house as PPR, lock in PPR rate, live there during renovation, and then rent it out afterwards. This set's it up with a nicer mortgage rate for the future, and also allows us to avoid paying rent for an unknown period during renovation.Don't be in a hurry to buy a property. Those high prices that first time buyers are complaining about apply to investors too. There is plenty of time to buy a property and if you wait, you can buy it in cash.
I think that's true for most jobs these days! And yes, I strongly agree, I have automatically saved and invested all my life. And my mortgage max contributions will continued. Recently the priority was paying down the Mortgage, but now that is reasonable, next it will be renovation, and then within the next year, I need to have a good automatic plan for where and how to save the additional 12k per month.Working for a tech firm, you won't get a gold watch for 40 years service, so make hay while the sun shines. Put a plan in place to automate savings each month and watch your wealth grow.
Remember, there is a difference between having a large income and being wealthy. There are lots of people with incomes similar to yours who are not wealthy as they have spent it on expensive houses and lifestyle. Build wealth and you will have lots of options.
i am all for some fiscal prudence, but the recent past has also reminded me that tomorrow is promised to no one!
You accumulate now to spend later.....
I think the issue is figuring out what current (and by defintion, future) spending level is reasonable. We can all agree on the tenet to live below your means. But by how much, and for how long.I am not a FIRE advocated and I do not tell people not to enjoy life. Automate you savings, so it comes out of your account automatically, just like a bill. then feel free to spend what is left over on whatever you want.
Thirdly, does your wife want to work, or is she just doing it because she can earn a reasonable income working part time? we had a similar decision to make (albeit my wife was still working full time) and we decided to forego the 80-100k she earns a year so that one of us can be with the kids full time, now my earnings had increased over the previous 2-3 years to effectively take up the slack once we took the childcare costs out but it meant i was earning a lot more for us to stay still effectively, but we still think its a good use of our resources! My kids are younger so it may not be as important in your case.
which brings me back to my point, unless your spouse really wants to work would everyones life not be better if they didnt?
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