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DIY index like portfolio, stock investment alternative to index ETFs that is better tax-wise

There is no doubt that stocks can be a great investment. Compared to other asset classes they are pretty easy to acquire, there is no need for tens of thousands of euros for a downpayment, they don't require debt and are very passive. They give us an opportunity to be invested in businesses without having to create those businesses. Last ten years were great for the stock market, even the coronavirus crisis didn’t depress the market for long. This doesn’t mean that the great returns will continue forever, but still the long term outlook for the overall market is great (long term stocks tend to go up as economies grow) especially if we look globally. The problem is that while picking the individual stocks, you might not be able to capture the overall market trend. You might pick the stocks wrong and the price might drop and never recover, or the company simply gets bankrupt. You might pick up a great company, buy it cheap (below intrinsic value), but still not earn money on it for m
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Best resources for analyzing buy and hold real estate deals

If you analyse your investment opportunity poorly or don't analyse it at all you might get very poor return on investment or even lose a lot of your money (potentially your whole down payment!). So, tread carefully, just putting money blindly in real estate will likely not work very well. Luckily there are a lot of resources that you can learn from! I will present you some of my favorite learning resources and tools. I will try to give a variety of examples, some referring specifically to the Irish market, because of the fact that the taxes are much different in Ireland compared to USA. In US the real estate investors pay very little tax, in Ireland it's a different story... Learning resources The analysis is not that hard, but you need to be able to: calculate your total necessary upfront investment (purchase related and renovations) calculate ongoing operation expenses estimate rental income budget for bigger expenses  estimate your taxes Yup, that's a lot of things that

How did I get into real estate investing?

The pressing need for investing I have always been a saver. I would stash away the cash I got for birthdays and other occasions since I can remember. I saved up money through high school, I saved significant parts of my paychecks from all my jobs in Poland (where I come from). Obviously I would sometimes spend some of that money, but I had a solid habit of saving. When I moved to Ireland at the end of 2015, my Polish savings suddenly became much smaller - I got hit by the fact that now the one month of apartment rent was approximately 4.5 times higher (and let's not forget about the deposit!). Even though my salary was much higher than in Poland, the cost of living was also significantly higher and very high taxes surprised me. Proportionally to the cost of living I needed a much higher buffer. Anyways, I spent 2016 and 2017 adjusting to the new job, new country and I continued my habit of savings. The company I work at also gives its employees stock as part of the compensation. In

How to get your spare room rented (contract template included)

You might be forced to rent one of your spare rooms to be able to afford the mortgage or you might use it to build your financial advantage. Renting a room in Ireland can be a fantastic opportunity to drastically improve your finances, because it offsets your housing costs and provides great tax benefits due to rent a room relief . If you are still on the fence about doing this, you might read more about the benefits of this approach in my previous post . Anyway, how do you get this actually done? It is not very hard, but it takes some work to get it done properly and I hope you will find those tips helpful! I break the process into the following steps: 1. Getting the room ready 2. Advertising 3. Viewings and tenant screening 4. Contracts and other documents Getting the room ready You should first start with emptying the room from things that don't belong there and making any necessary repairs, such as painting. Then you should think about what will be required in the room, e.g. do

Accelerate your financial independence with renting a room in Ireland

Buying is cheaper than renting Rents in Dublin are quite expensive, especially in South Dublin and close to the city center and they keep increasing. There is a significant difference between what the rents were in 2015 and are now even with the rent control. Renting isn't necessarily bad - it has its advantages, e.g. you don't have to worry about the surprise repair costs, you can move easily. But financially in Ireland it's not the best bet. Compared to rents, the house prices are not that high. In 2018 my partner and I decided to buy an apartment in Dublin. We bought a two bedroom apartment close to Grand Canal Dock area. Apartments like that would rent for something like 2000 per month (in a range 1800-2200). We paid 385000 for the apartment, which is quite a lot.  But when you take a look at the mortgage - it actually can be quite cheaper than rent. 30 year mortgage would cost us ~1460 Euro a month which is more than 500 Euro cheaper than rent. There are additional cos

Evaluating buy and hold investment returns in real estate

Welcome to the second post in the series of evaluating real estate deals. You can see the previous post that discusses what are the sources of return  here . Today we will learn how to know if the investment is a good investment looking at its returns.  This is not a comprehensive 'how to analyze deals' post. People could write whole books on this topic. Instead we will take a look at some basics of investment returns. I will explain the following terms: Cashflow ROI ROE and teach you how can you can use them when evaluating real estate in the Irish real estate market. Cashflow Are you left with cash (or money in the bank) after all the expenses and taxes are paid? Then you have positive cashflow. If the mortgage payments, expenses and taxes together are higher than the income, then the cashflow is negative. You have to send additional money to keep your property afloat. Is negative cashflow a problem?  It doesn't have to be - because you can make great deals that have nega

What are the sources of returns in real estate investing?

Real estate investments in Ireland need significant capital. In general you can get a loan with a 20% down payment (or 10% in certain cases) when buying a property for yourself to live in. Investment property loans (Buy To Let) start with 30% down payments. It’s a big deal! Before you invest, you should check if it’s worth it. You will be locking down a lot of your capital. You could invest it in other ways, for example in a different real estate deal, equities and so on. Let’s start with considering how you make money via real estate investment. I see three primary ways: Income: cashflow + mortgage paydown Appreciation (natural and forced) Inflation reducing the value of outstanding debt Income: cashflow + mortgage paydown The first one is pretty obvious! If you rent the property it should bring you some income. I divide the income into two parts, cashflow and mortgage paydown. Monthly cashflow is the money you are left with after all the other expenses, taxes and mortgage a