Inheritance

Pissy Missy

So I came into €40k inheritance, I would like to buy a house within the next few years but would also like to see the best return on my money so i can have a sizeable deposit for when the time comes. So far the safest no risk return is investing it in state bonds, here I'll see a 9% return after 5 years. Some people are saying I should invest in property.

Does anyone have any suggestions on the best place to leave your money for the best return?

For security and peace of mind, State Bonds are the best, you know exactly what you will have at the end of the day and can plan accordingly. No tax to pay either. Property could be volatile now with a developing recession.

Nody

https://www.boards.ie/discussion/2058325409/inheritance

Well for a few years you're really limited in what you can do honestly; things such as shares, funds, property etc. are all out the window. Best bet is probably going to be some form of high interest account on raisin.ie or similar site. You'd be looking at around 4% a year but at least your investment is safe and there for your downpayment.

Pissy Missy

https://www.boards.ie/discussion/comment/121446286#Comment_121446286

Thank you

Pissy Missy

https://www.boards.ie/discussion/comment/121446297#Comment_121446297

Never heard of raisin, thank you

Jane_Not His Real Name

From Irish Indo yesterday...'Rates of 4pc and above available from Raisin and Trade Republic....''

cute geoge

https://www.boards.ie/discussion/2058325409/inheritance

property proces are only going one way ,plenty of apartments sold for 100k and less but they are getting rarer by the week .Imo put the 40k towards the deposit of a nearby 100k apartment and rent it out to cover remainder of mortage.You will have to keep your eyes open to the building quality of apartment ,you dont want a slum

AndrewJRenko

https://www.boards.ie/discussion/comment/121478098#Comment_121478098

This would be a high risk strategy on two counts;

1) Putting all your investment eggs in one basket - the Irish residential property market.

2) Leveraging your investment by borrowing further. A small drop on property prices could easily wipe out your entire €40k equity in the property and leave you in negative equity.

We had plenty of people in 2006 telling us how property prices were only going to go one way.

cute geoge

https://www.boards.ie/discussion/comment/121478163#Comment_121478163

You must be living on a different planet then the rest of us .There is a serious shortage of housing in this country on top of 50k+ increasing number of refugees living in hotels compared to 2006 when we had bult excessive houses which no one wanted when the crash hit. Ontop the price of renting property is crazy,the price of materials is crazy and bulders can not be got ,so square that circle for me .it is a no brainer in my mind and I dont say that lightly !!

AndrewJRenko

https://www.boards.ie/discussion/comment/121478410#Comment_121478410

Those of us who are old enough remember hearing all this guff in 2006 might have a different view.

It is a simple fact that borrowing to invest greatly increases your risk, as does failing to diversify.

cute geoge

https://www.boards.ie/discussion/comment/121478433#Comment_121478433

I was in my prime during the celtic tiger ,made good money working in sites even had the price of a house in cash but never even considered buying property for investment until 2015 when they were value and was handsomely rewarded by doing s.I still think there is value out there,granted not as sure as in 2015 but still woth taking a calculated risk on

AndrewJRenko

https://www.boards.ie/discussion/comment/121478462#Comment_121478462

You may well be right, but there is a risk that you're wrong. There's no such thing as a 'no brainer' when it comes to a €40k investment.

Borrowing to invest greatly increases the potential gains and the potential losses.

Let's just say you borrow €160k, put it with your €40k, and buy a €200k apartment. If property prices go up by 5% in two years, you've made a €10k gain, or 25% on your original €40k. If property prices go down by 5% in two years, which isn't a wildly off-the-wall possibility, you've lost €10k on your original €40k, a 25% loss. The bank still get their €160k either way.

Alternatively, let's say you put your €40k into the stock market, and markets tank by 5% in two years. You're down €2k, a 5% loss.

I'm not recommending stock market for a short term investment, I'm just explaining the potential risks in a leveraged investment.

For a property investment, one bad tenant could easily wipe €10k to €15k off any profits. Transaction costs of buying and selling property are relatively high. There's lots of good reasons why Irish residential property wouldn't be a great idea for a short term investment.