Ask the Expert: What’s the best way to reinvest now that I’m selling my property to rent?

Our real estate financing expert will answer your questions

I have been involved in real estate investing for years through a buy to let I purchased in 2004. It has performed reasonably well nonetheless, but at this stage it is almost impossible for me to generate a return with the constraints on rental income and rental pressure zones that it is in. I have decided to sell before the market flattens out but my question is what to do with the profit.

Estimating around €186,000 and would very much like to look for property related investments, possibly commercial but not sure. What is available to me?

This is indeed a sensitive issue. First things first, I’ll assume your profit is net of capital gains tax payable on the raise and any sale price you realize since 2004.

They also have obligations under the RTB to tenants, and while longer notice periods are currently being negotiated through the agency which will need to be cemented by the Oireachtas, you should keep yourself informed of this development.

I know you’re still interested in real estate as an investment vehicle, but I’m wondering if this is for sentimental or “instinctive” reasons, which may be an Irish nuance, or if you should actually be aiming for the highest return in any asset class , or a mixture.
I asked Brendan Costello of Galway-based Talk Financial for his real estate investing recommendations. “Very few people still like real estate that doesn’t want to buy physical real estate,” he says. “Most people just want to get out at this stage. The challenge for someone looking to stay in the market but not in their current mix is ​​accessing real estate funds on an insured basis. It is a very slow market in the recovery with downward pressure on retail and commercial buildings as Covid put serious pressure on the market.”

He gives me the example of a pub that brought in 12.5 million euros just before the pandemic broke out, while the entire facade of a nearby shopping center with almost 20 units is currently worth 9.7 million euros.

“If you don’t want to buy straight away, and I would strongly advise against that given the current heat in the market, buy into a real estate fund like Irish Life or Zurich [insurance company] or buy into wholesale retail as a passive investor over the next four to six years, and there’s not much return at all.

Mr Costello adds that if ESG (environmental, social and governance) factors are important to you, financing social housing, largely in the UK, is also possible through investment funds.
“A lack of government support has closed some who have been here, such as B. Arena Capital partners who identified and funded secure long-term leases.”
As always, this is an area where specific expert advice from an independent financial broker, preferably, is strongly recommended.

first time buyers here. I just want to ask if there is a way to get an approved joint mortgage for me and my husband if one of us just got a job? Or do we have to wait six months for approval?

I will say it depends as there is no hard and fast rule set by lenders or the central bank for this, but good financial management along with applicants’ “prospects” are all taken into account. I’ve seen people cross the border when they’re not already employed because their qualifications and resume are such that they’re bound to be a good risk.

For example, think of professionals such as a doctor or pharmacist. Unless they are looking for the full 90 percent and the property on which the loan is based is worth far more than the loan being requested, lenders are not as strict and quick on certain rules.
I don’t know your exact circumstances but I am assuming that as a first time buyer you are looking for the maximum credit available. Joey Sheehan, author of The Mortgage Coach, agrees that there’s a “chance and maybe a chance” you won’t have to wait six months.

“If there’s no probationary period, some banks have no problem approving you as soon as you can provide a payslip from the new employer, on the basis that your husband moved directly from a similar position at similar wages. If a probationary period applies, they may want him to complete it before forwarding any monies, unless your husband is a high earner and works as a freelancer or is a government employee. Depending on your income, it may determine if [the] The bank would also waive the probationary period because if you are close enough to qualify for the full loan, they can waive completion [the] trial period.”

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