€80-100k to invest

will56

Hi,

Looking to get some idea's/help on possibly investing €80-100k in the new future.

Currently have a rental property that is out of negative equity and should make a tidy profit if sold.

I don't have a mortgage to pay off

Would there be an investment option that I could possibly see a return each year that I could use as a supplemental income (however small that might be) ? (don't say bitcoin )

Would I be better of investing it in my pension ? 33yrs old, only started pension recently due to the property taking up my free income.

Should I hold on to the property and use it as an income source in years to come ? It's costing me money each year with tax and running costs and not having it would actually be a weight lifted off my shoulders

Should I just put a chunk of the money away for 10 years and let the interest acrue for a rainy day ?

I realize this is a chat that might be best had with a financial adviser but any advice would be greatly appreciated

topper_harley2

Do you own your own house? Are you going to buy? Have you any other debts etc....Nowhere near enough info given to give meaningful response.

But yes at 100k I feel boards.ie is probably not the best approach! Independent advisor if you're going to invest it.... Ross Curran in Galway is one of note.

TiGeR KiNgS

will56 wrote: »

Hi,

Looking to get some idea's/help on possibly investing €80-100k in the new future.

Currently have a rental property that is out of negative equity and should make a tidy profit if sold.

I don't have a mortgage to pay off

Would there be an investment option that I could possibly see a return each year that I could use as a supplemental income (however small that might be) ? (don't say bitcoin )

Would I be better of investing it in my pension ? 33yrs old, only started pension recently due to the property taking up my free income.

Should I hold on to the property and use it as an income source in years to come ? It's costing me money each year with tax and running costs and not having it would actually be a weight lifted off my shoulders

Should I just put a chunk of the money away for 10 years and let the interest acrue for a rainy day ?

I realize this is a chat that might be best had with a financial adviser but any advice would be greatly appreciated

What return do you expect next year from rental profit ? e.g 5% (after tax) + 10% appreciation. versus 1-2% (after DIRT) with money on deposit.

Do you actually need this money ?

The rental market is booming right now so if your not making money now forget about it if the market tightens (as you seem to have experience with).

will56

TiGeR KiNgS wrote: »

What return do you expect next year from rental profit ? e.g 5% (after tax) + 10% appreciation. versus 1-2% (after DIRT) with money on deposit.

Do you actually need this money ?

The rental market is booming right now so if your not making money now forget about it if the market tightens (as you seem to have experience with).

Rental at the moment covers mortgage and insurance but not the tax bill each year

Geuze

will56 wrote: »

Currently have a rental property that is out of negative equity and should make a tidy profit if sold.

I don't have a mortgage to pay off

These two statements are contradictory.

Negative equity implies that you have a mortgage.

Geuze

will56 wrote: »

Rental at the moment covers mortgage and insurance but not the tax bill each year

To calculate rental profits, just consider mortgage interest, not mortgage repayments.

Capital repayments are not a cost.

will56

Geuze wrote: »

These two statements are contradictory.

Negative equity implies that you have a mortgage.

Sorry for the confusion.

The house I live in at the moment does not have a mortgage on it.
The Rental property I'm talking about does have a mortgage but is no longer in negative equity

will56

topper_harley2 wrote: »

Do you own your own house? Are you going to buy? Have you any other debts etc....Nowhere near enough info given to give meaningful response.

But yes at 100k I feel boards.ie is probably not the best approach! Independent advisor if you're going to invest it.... Ross Curran in Galway is one of note.

I own my own house (well jointly with wife)
Have about €5k in loans that will be cleared first before looking to invest the money.

We're not looking to but anywhere new at the moment

will56

Geuze wrote: »

To calculate rental profits, just consider mortgage interest, not mortgage repayments.

Capital repayments are not a cost.

If that was the case with my account I would see a healthy profit each year, however I am in the position that I am making repayments so rent in vs payments out does not equal a profit for me at the moment

Geuze

will56 wrote: »

If that was the case with my account I would see a healthy profit each year, however I am in the position that I am making repayments so rent in vs payments out does not equal a profit for me at the moment

You are confusing cashflow with profits, as many people do.

Repaying the capital of the mortgage is not a cost, it is simply returning money that the bank previously gave you.

As you repay capital, you build up an asset.

The interest is a cost, and so it can be deducted from the gross rental income, when calculating income tax.

So you may be making large rental profits, but it may be cashflow negative, as you are repaying the capital on the loan.

will56

Geuze wrote: »

You are confusing cashflow with profits, as many people do.

Repaying the capital of the mortgage is not a cost, it is simply returning money that the bank previously gave you.

As you repay capital, you build up an asset.

The interest is a cost, and so it can be deducted from the gross rental income, when calculating income tax.

So you may be making large rental profits, but it may be cashflow negative, as you are repaying the capital on the loan.

Correct, I am cashflow negative at the moment with the rental property.

Sorry if I'm not getting the terminology correct.

danko82

I am in kind of the same situation..and looking for advises.

Squozen

I'm biased as an ex-pat Australian, but if you're asking this question without having a personal pension I think you've already got the answer.

will56

Squozen wrote: »

I'm biased as an ex-pat Australian, but if you're asking this question without having a personal pension I think you've already got the answer.

As in put the lot into a pension ?

Alkers

will56 wrote: »

Would I be better of investing it in my pension ? 33yrs old, only started pension recently due to the property taking up my free income.

As I first step I would maximise your pension AVC, I think you can do this retrospectively for the previous three calendar years. Your pension fund will catch up and you'll receive tax relief on the amount at your marginal rate.

Are you planning to have kids? They'll likely give you something to save your money for!

will56

Simona1986 wrote: »

As I first step I would maximise your pension AVC, I think you can do this retrospectively for the previous three calendar years. Your pension fund will catch up and you'll receive tax relief on the amount at your marginal rate.

Are you planning to have kids? They'll likely give you something to save your money for!

First one arrived last week.
The property hasn't been sold yet so all this is really just brainstorming on my part to see what it could be best used for or if its better of just keeping it and put up with the cost of it for the moment

Squozen

will56 wrote: »

As in put the lot into a pension ?

Speak to an adviser first given the amount you have, but yes, absolutely.

ct5amr2ig1nfhp

You should speak to a financial advisor.

While it can make sense to maximise your pension AVC, you need to your homework and discuss with a FA. At 33, you are a long way off until retirement (30 years?) A lot can chang...marriage, kids, another house, laws can change, death etc.

An Ri rua

You need tax advice. And its worth paying well for in order to maximise that sum of money. Particularly as you stand to pay CGT if you simply liquidate that asset.
One thing you could do is invest a sizeable portion of it into an art piece (more than 30k). Then loan that to a prescribed institution / gallery, and it will be a CGT-free sale after 10 years on loan. Sweet. Of course it will have been cost-free also, as they provide security, insurance, a likelihood that it won't even be on show to the public but simply stored.

What's not to like?

will56

An Ri rua wrote: »

You need tax advice. And its worth paying well for in order to maximise that sum of money. Particularly as you stand to pay CGT if you simply liquidate that asset.
One thing you could do is invest a sizeable portion of it into an art piece (more than 30k). Then loan that to a prescribed institution / gallery, and it will be a CGT-free sale after 10 years on loan. Sweet. Of course it will have been cost-free also, as they provide security, insurance, a likelihood that it won't even be on show to the public but simply stored.

What's not to like?

I have a bit to go before there is CGT to be payed on the asset (I think)

Paid €220k, current mortgage is €125k and the current value is approaching €200k

PHG

Put it towards the mortgage so you have reduced payments?