Money to Invest - Newbie

whattodo2007

Hi All,

I am a regular poster to boards.ie but because of personal reasons I am posting under a different name.

My mortgage has 58k outstanding on a property worth 525k

I am currently paying €1500 a month on mortgage repayments.

I am interested in the following:

1. Buying a place in Ireland and renting it out
2. Buying a place in Portugal and renting it out but having it available to me when I need it.

What would you do? I've around 250k or so to spare - opinions please??

WTD

daveirl

This post has been deleted.

is_that_so

It also depends how safe you want to be. With those types of funds banks would also welcome you with open arms and offer you high interest accounts. If it were me I would be inclined to diversify the fund into a number of areas. Given the uncertainly here Portugal might be a better bet and as Dave has pointed out equities. Stockbrokers also would love you bringing that type of money to them.

A Random Walk

You should consider paying off your outstanding mortgage for a start. That's an instant 5%.

Next question is what do you want to invest for - is it short term money/pension fund? How much risk would you feel comfortable with (the higher the risk the higher the potential returns)? How long could you leave the investment untouched? Do you have any possible short term needs for cash (e.g. kids education, weddings)? Do you have a "rainy day" fund?

Do you have any experience with investing? Why have you said you are only interested in property?

Sorry, lots of questions and no answers

whattodo2007

A Random Walk wrote:

You should consider paying off your outstanding mortgage for a start. That's an instant 5%.

Next question is what do you want to invest for - is it short term money/pension fund? How much risk would you feel comfortable with (the higher the risk the higher the potential returns)? How long could you leave the investment untouched? Do you have any possible short term needs for cash (e.g. kids education, weddings)? Do you have a "rainy day" fund?

Do you have any experience with investing? Why have you said you are only interested in property?

Sorry, lots of questions and no answers

Maybe I misled. I just paid 250k off the mortgage but am now looking to release equity from it.

Purpose of investment is to have somewhere to go to, but hopefully see a rise in property value (5-10 years).

No exp. of investing apart from a few shares with Rabo.

WTD

A Random Walk

If it was me I'd want to seriously think to myself whether I really wanted to get myself into debt to buy an "investment". I'd want to think whether I'm doing this for the right reasons or because I see other people doing it. I'd want to think about whether I really want to own a property in the arse end of nowhere and the endless hassle that could come from it.

If you really wanted to combine an investment with a holiday location you'd already know where that property should be. If I told you the Falklands was a great place to invest, would you be happy to go there for the next 20 years on your annual holiday if the investment doesn't work out and you need to get your monies worth? Personally I think investments and holiday locations confuse the matter - it means you compromise on the investment location and it means you get to fool yourself into thinking that "it's not so bad" if your 200k is put into someplace that you can never sell.

Property in most obvious places is yesterdays investment as far as I'm concerned, and much of what you see in overseas property borders on a scam - Bulgaria, Cape Verde, India, Berlin, South of France, Turkey, East Germany, Croatia, Montenegro, Dominican Republic, ski chalets in locations that don't get snow - you name it.

I'm obviously biased so I'll let others give you a proper answer.

Sonnenblumen

A Random Walk wrote:

I'm obviously biased so I'll let others give you a proper answer.

daveirl

This post has been deleted.

Time Magazine

Paid off the mortgage (say bought 10 years ago for 100k) and re-mortgaged it, maybe?

whattodo2007

sorry for confusion.

I just got 250k from a 'friend'. Paid it straight off the mortgage so now I owe 58k.

I am considering releasing some of that equity from the mortgage - hence the 250k. I thought it best to pay off lump of mortgage while I decide what exactly to do.

Maybe I would just be best served not doing anything and having no mortgage in about 5 years time.

WTD

stepbar

Hold on a minute, you got 250k from a "friend" to pay down your mortgage (In fairness, who gets 250k from a "friend". Must be a good one....) and you want to now release 250k in an equity release on that same mortgage?

You've practically done the cancelled each of the transactions out. I'm still confused, why didnt you use the 250k you got from your friend? Am I the only one who finds this strange?

So you have loads of equity in there available. I wouldnt buy in ireland becuase your rental income wont cover your equity release payments, and the market is on a downturn. If your not getting a good percentage yield from your property the price wont be pushed up.
Portugal is an ok market, but you should be looking at payment terms and putting in as little as possible to get the most out.
For what you can buy in portugal you can buy three in other countries like Slovakia, italy etc.

Also consider you ability to make repayments depending on how much you borrow from your equity, dont overdraw yourself in case interest rates go up a bit and payments become tighter for you.
Make sure as its for investment you do it at interest only rates, if your are doing property I mean because its likely you will sell at some stage so no point making capital repayments.
you could also if you have cash in the bank for example, release 50K to buy 2 off plan properties and also put a separate 50k in an account earning the same interest as you would be paying on your loan, and thus paying nothing from your pocket for your investment. Perhaps sell one before completion and get a mortgage on the other and keep and rent....there are many options