Am I Crazy buying house with cash with mortgaged property

@rosyy57 Yeah but we also have to factor in the heavy tax and deemed disposal. I'd agree though that the tenants causing hassle is a big concern, and something that would put me personally towards stocks
 
@rosyy57 Not in ireland I'd say?

Thought it was just the vanguard s&p available in Ireland and was 2-3% and that's before paying capital gains.

Happy to be corrected if incorrect please!
 
@khan1123 The S & P 500 returns an average of 10% (based on last 50 years). If investing in EU based fund, you don't pay cap gains. You pay exit tax instead (which is a lot worse).

Alternative is build your own portfolio on degiro or equivalent. A diversified portfolio consisting of mainly blue chip stocks where you are not trying to time the market will net you similar returns, but with only cap gains exposure (and much lower fees than a managed fund)

Either way, you are realistically looking to double your money every 8 years.
 
@khan1123 Yep, consider yourself corrected. You can invest in indexes that track the S&P on Degiro, accumulating funds delivered this. Up 16% or more so far this year - but past performance doesn’t indicate future performance. So I’m not advising doing that. All vanguard all world fund looks good right now.
 
@cee_the_atheist Excuse my ignorance - if you are planning to pay off the mortgage in 3 years, how would you do this? Wouldn't you have significant charges, and surely you don't have sufficient funds?
 
@cee_the_atheist Instead of thinking, only of the positives, consider the potential risks and other scenarios,

Your happy path requires;
  1. Rental income to not go down or away in the next 15 years - and no work required on the house you currently own
  2. Interest rates to stay low
  3. Rent a room relief to stay around for 15 years and rental taxes to stay as they are
  4. Renovation and construction costs on the doer-upper to stay reasonable
  5. No new taxation or fees on second properties
  6. Your own job being stable and not requiring you to move
  7. No personal challenges that affect your earnings - from health to kids
If anything on this list changes you have a challenge, not necessarily one that ruins you. But a challenge.

Ultimately the biggest impact you can make on your long term income is to pay down a good chunk of the mortgage earlier - saving interest. That’s almost a no-brainier.

There will be no end of houses that offer a chance to be renovated. Interest on the mortgage of the first property is what I’d focus on.
 
@paula124 Absolutely my thinking on this.

Taking on tenants is a risk, and getting a doer upper is a risk. I could stomach one, but not two. My advice would be to do the boring option no 2 so that at least when time comes for a doer upper you’ve got the safety net if your own home secured.

Way things are now, a string of bad luck could wipe everything out; doer upper costs more than anticipated/tenants go mental and wreck the gaff/accidental pregnancy and suddenly have to kick tenants out and put doer upper on backburner/job loss during a long recession… etc.
 
@candidate96 Just note with option 1, if you ever move into the fixer-upper, you cannot let the other property under a residential mortgage, you would need to switch to a BTL mortgage which has significantly higher interest.
 
@cee_the_atheist The issue I see with buying in cash is you won't have cash to do it up. I am guessing what you will get for 120 will need a lot of work.. no point doing a cosmetic job, if you doing it do it right and insulate properly and bring up to BER A or high B.

That will cost money and you will be sitting on it for 2 or 3 years doing piecemeal bits as money is available...

I being cautious would get the mortgage cleared or well down and go again. Buy the next place as buy to let and after a few months tell them your moving into to get rate down and work away.

The mortgage would give you cash to get it done. It sound like a great project and interest, but 6 months later your well fucked up of it. Loosing your evenings and weekends.
 
@cee_the_atheist Sorry very off topic, hope this doesn't break rules.

You clearly have your head very well screwed on fianncially.

What kind of car do you drive. Looking to buy one and at a similar age, I'd value your choice if you are willing to share.
 
@asafg As funny as this sounds i drive a 01 yaris . Its basically bulletproof and always passes nct . Tax is only 199 for the year and my insurance is 300 . May not be the flashy car but its nothing to run and super reliable
 

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