Investment Advice 2020

I'll start off by saying that I'm really impressed with what you have achieved to date. Well done you.

I am sure some of the others with far more knowledge will jump in but I what I see is the following. Please take with a pinch of salt..

1. Use savings/stock to pay off some of the mortgages if recession hits OR
-- if there is a recession then the value of your stocks is likely to be hit too. The value could drop by 20-30% so I would think of them as a separate. If there was a recession, and you were secure, that is the time to buy not sell.

2. Even if recession hits I still have 2 apartments (one by airport and one by IFSC) so they are both relatively secure assets and I have enough paid off to not go into negative equity.
-- Yes, two good locations so it should be easy to rent them. Would the mortgage still be paid if both rental incomes were cut in half?

3. Sell both apartments and buy a house
-- I would stick with the two apartments. If your life changes you might want to own a house but houses cost more to run so if you don't need one why bother.

4. Buy property abroad
-- Anyone I know who has purchased property abroad has lost money on it. From what I have been told it is simply to difficult to manage.

5. Stay away from property and invest in other things with my savings/stock
-- This is the best option for me as it would allow you to really diversify out of the Irish property market.

(I am assuming that you maxing your current pensions contributions so that 110K is growing)

However, I would probably not do any of the above and instead concentrate on paying off the first mortgage (P.1 unless it is a tracker mortgage, then P2) you have. I would also use 20k of your savings to pay it down and then attack it more aggressively. I would then do the same with the other property.

You have 50k in Stocks, which I hope are not in the company you work for, which will also continue to grow. If they are in the company that you work for then I would probably sell 50% and again look into paying off the mortgage on P1.

Once you OWN your property then you are free to double down on other investments and your pensions. You will always have the security blanket of knowing that even in a recession you will be fine. If you lost your job you will be fine. That security is what I would look for right now and the same time your pension is growing and you have a good 50K invested in the stock market.

hellotheremary wrote: »

Hello all,

I am looking to make a decision on whether to invest in a third property or not.

Current Financials

Age: 34 (Single)
Salary: 95k (83k currently but secured a new position starting Jan)
Stock: 52k
Savings: 50k
Pension: 110k

Property 1 (2bd 2bath Apartment - Dublin 9)

Value: 250k
LTV: 43%
Rental Income Per Month: 1750e

Property 2 (1bd 1 bath Apartment - Dublin 3)
Value: 280k
LTV: 67%
Living here currently but potential rental income of 1750e

I am thinking I can either:

1. Use savings/stock to pay off some of the mortgages if recession hits OR
2. Even if recession hits I still have 2 apartments (one by airport and one by IFSC) so they are both relatively secure assets and I have enough paid off to not go into negative equity.
3. Sell both apartments and buy a house
4. Buy property abroad
5. Stay away from property and invest in other things with my savings/stock

Any advice please on what I should do?

Don't pay off the rental mortgages, keep them going now that you get to deduct 100% of interest costs it's cheap money (as long as both are giving some positive cash flow and not causing problems). Also you are young, now is the time to take calculated risk.

You have 100k between stock and savings, if you want to buy your own place you have a deposit there. Don't sell your apartments to buy a house. And don't buy a huge house a young single man doesn't need just because you can.

Don't buy property abroad, the only countries with higher rental yields than Ireland right now are warzones. Ireland is by far the best yielding property market in a more or less stable western democracy.

You could diversify and just buy other things but you are young and nothing will equal the returns of leveraged property investments.

If I was you I would keep putting the maximum into your pensions and make sure they are invested in low cost but mostly stock funds, then with whatever savings you have left over keep a decent emergency fund and see if you can pick up another rental property or two over the next few years. I think the market is wobbling now but long term it will be ok.