Do you think I´m mad????

hefty_langer

go for it rick, mammy and daddy are taking the risk not you, they will bankroll you...
a) if you get no tenants
b) Interest rates go up
c) Property values decrease

and you can walk away with no worries and try something else.

/sarcasm

daveirl

This post has been deleted.

miju

rick_fantastic wrote:

well the price is not exactly likely to go down now, is it!

.......

supply and demand in the area i am looking to purchase in are very high and will continue to grow in the future. for example apartments 5 mins away are selling for 440k off plan for a two bed!

sorry feel like i should post this for you rick , i've seen asking price drops in dundrum of €50,000

rick_fantastic

miju wrote:

sorry feel like i should post this for you rick , i've seen asking price drops in dundrum of €50,000

thats for a two bed room apartment actually around the corner from where i currently live.

very nice apartments but there is a new development beside it of apartments with two beds selling for 440k so realistically why would someone buy a similar apartment for 120k more?

in my opinion, in that area, there are too many over priced apartments being built.

kluivert

My girlfriend can only get 255k of a mortgage with both of us earning 30k a yr.

whizzbang

Here's a question for you Rick

Who sets interest rates in Ireland and what do you think would influence their decisions?

I'm always interested to see the response of prospective mortage holders to this question.

Ogie16

if i was earning around 25,000 with no loans to repay or savings how much of a mortagage could i get?
and by having a parent involved what increase could i expect to see in the figure...

godtabh

Ogie16 wrote:

if i was earning around 25,000 with no loans to repay or savings how much of a mortagage could i get?
and by having a parent involved what increase could i expect to see in the figure...

Talk to a bank. They'll probably no a lot better than people here.

Whats the going rate 5 times your gross?

miju

going rate depending on the bank / your circumstances is between 8-10 times your salary

Ogie16

kearnsr wrote:

Talk to a bank. They'll probably no a lot better than people here.

Whats the going rate 5 times your gross?

Something like that, for me that would be 125,000.
By having a parent involved would it be possible to double that to 250,000????
anybody here experience of this type of situation?

rick_fantastic

Ogie16 wrote:

Something like that, for me that would be 125,000.
By having a parent involved would it be possible to double that to 250,000????
anybody here experience of this type of situation?

depends on whether your parents assets outweigh their liabilties and by how much etc etc....

there are a lot of option to consider...

underwriting the liability

joint ownership (you own a % / they own %)

guarantor on the mortgage

there are other options as well and there is various legal implications that go with all the different options too

godtabh

Ogie16 wrote:

Something like that, for me that would be 125,000.
By having a parent involved would it be possible to double that to 250,000????
anybody here experience of this type of situation?

They will take it into account but it comes down to can you pay the bank off

um7y1h83ge06nx

rick_fantastic, the big thing I want to know is what is your salary per annum?

You must be on a huge salary to be able to get that mortgage. I'm curious as i'm 23 and in I.T. also.

miju

think he said it one earlier on in the thread , somewhere around the 90-100k mark or something similiar

gibo_ie

Rick,
Firstly good luck in your venture, think carefully before you do this and hopefully you will be ok.

Background:
I am a 27 year old working in IT and i have now got 5 houses i rent out. Now i don tknow what IT job gives you more for a masters before you are 40 but anyway thats a different story, my opinion (and i am management now) is that experience far outweighs a masters.

If you can afford to keep this house with no rooms or only one room rented ofr a year then seriously consider the purchase. Backing of parents is great but if prices drop (or more likely remain steady) and it will then this doesnt help your case of having a negative equity mortgage. Getting so much more money than your house is worth is only going to help if you sell your house in the next few years for substantially more than you bought it for, and the way they are building in this area of Dublin i seriously doubt it. Property prices start to fall at the higher end of the market first so you wont get too much warnings, keep an eye on Shrewsbury Road etc.. cos its your price range next.

If you have access to money and want to do something good, my best advice which is good advice is to buy a plot of land outside Dublin, maybe somewhere near Navan or Drogheda; somewhere in commuter land, where you can build a hell of a house for 200k plus maybe 100k land price and this house will be worth at least 450k when done. It doesnt take a genius to do this and it is much safer than jumping in first time at over 500k!!

My latest venture of 3 houses in a single development will only cost 450k and at the end i will have finished clearing my own mortgage of 300k (and im only 27)

Anyway sorry for long post but it is just advice from someone who has been there and done this!!

Whatever the choice, good luck, plan for the worst, allow for unknowns and always work your figures in complete worst case scenarios. I done this and it really does help, especially when looking at figures at end of year saying wow i made 40% more than expected and covered all costs!

Ciao,
M

hmmm

gibo_ie wrote:

I am a 27 year old working in IT and i have now got 5 houses i rent out.

Would you be willing to tell us how much debt you are in?

gibo_ie wrote:

Property prices start to fall at the higher end of the market first so you wont get too much warning

True true, there's been less than 149 examples of falling Irish house prices quoted here - what would a warning look like?

Bluehair

Rick i reckon you're insane to even be contemplating this. Even the most bullish commentators are talking up the soft landing scenario and it's far from unlikely that prices could go down.

However as another poster observed you are clearly viewing this with 'rose tinted glasses'. Cruel as this may sound i believe you'll soundly deserve everything you get in the (likely) event of a downturn.

Madness...

FreeAnd..

Originally posted by gibo_ie

I am a 27 year old working in IT and i have now got 5 houses i rent out.

I think the domain www.iamfacingforeclosure.ie is available, might make some interesting reading next year - seriously though, does that mean that you "own" 6 houses in total? i.e. a PPR also or do you rent and have 5 investment purposes. This is some serious exposure to the market, I hope that its just a small part of a well diversified portfolio....eggs and baskets sping to mind

If you can afford to keep this house with no rooms or only one room rented ofr a year

I'd like to know could you afford the repayments in your above scenario, just wondering what kind of salary you are on too if you could and if it would be reflective of the general IT worker.

rick_fantastic

jeez, why would everybody asuming im on a salary of 90-100k????? seriously

@ gibo_ie : fair play to ya mate, looks like your doing well for yourself. kudos

as for "the rose tinted" glasses bit.... all i gave you was best case scenario. do you really think that i havent worked out all of the permutations and combinations? i know what im planning on getting myself in for

interest rates went up 1/4% today and will be going up another 1/4% in january.

i know what im doing is risky and i could be regretting it in 5 years time... but then again it could be the best thing i have ever done!!!!

life is about taking risks sometimes it pays sometimes it doesnt...

anyway im putting in an offer tomorrow morning. i have set the limit to what i will go to and ill stick to it. if i dont get it i dont get it..

then ill prob start looking for somewhere else...

Bluetonic

One question for you, why at the start of this thread did you ask do people think you are mad, when is 100% clear you already think your not and you've done nothing but defend yourself against anyone who's not got the same mindset as yourself, and praise those who do.

This thread should be locked as it serves no purpose.

Sponge Bob

It does serve one purpose Bluetonic, it proves that as long as there is a cliff the lemmings will surely find it

hmmm

rick_fantastic wrote:

interest rates went up 1/4% today and will be going up another 1/4% in january.

Completely clueless. The announcement for today hasn't been made yet, and I can 99.99% guarantee that the next increase will not come in January.

rick_fantastic

Bluetonic wrote:

One question for you, why at the start of this thread did you ask do people think you are mad, when is 100% clear you already think your not and you've done nothing but defend yourself against anyone who's not got the same mindset as yourself, and praise those who do.

This thread should be locked as it serves no purpose.

i started the thread because i wanted to get some opinions on what i was planning on doing....

i had pretty much decided what i wanted to do but its always nice to get fresh insight and thoughts.

THANKS VERY MUCH EVERYONE FOR COMMENTS AND INPUT

to everyone who is happy renting, good luck to you.

to everyone who is too afraid to take a chance, good luck to you to.

i myself and it has nothing to do with the mentality of "must get on the property ladder" buzz. i want to own my own home and to do that ill make whatever sacrifices are necessary.

miju

hmmm wrote:

Completely clueless. The announcement for today hasn't been made yet, and I can 99.99% guarantee that the next increase will not come in January.

beat me to it,

but sure speaking on interest rates anyways , if the rates rise .25% today and again in January (as you say not me ) then you thats half of your last €320 per month eaten away , after that your in **** you pants territory if any more raises comes along


do you really think you can survive with bills etc , feeding yourself on €160 a month? you are completely barmy IMHO but then again if

rick_fantastic wrote:

i myself and it has nothing to do with the mentality of "must get on the property ladder" buzz. i want to own my own home and to do that ill make whatever sacrifices are necessary.

is anything to go by then your just plain stupid because you haven't sized it up correctly at all despite thinking you have, theres risk and then there's stupidity , bear in mind that with great risk usually comes a valuable reward but in the current market that is far from gaurenteed adding even more to the risk factor

best of luck with the purchase anyway as you'll sure as hell need it in the coming months

one last question , will your mortgage be interest only for the first few years and whats the lenght of it?

podge018

I don't see the appeal of owning your home when every spare room is rented out and it won't be your own home.

CiaranC

Im approved for a joint mortgage thats half yours with my SO. Its 5 times my income and 2.5 times our combined income, we will have circa 4k cash a month after paying the mortgage and Im sweating. This seems insane.

Kinetic^

LOL, I was the exact same as you were 18 months ago Rick....only difference was it was me and my gf buying. We were looking to buy something for €410k, in the end we opted for something for €265k. It just made sense when starting out to purchase something for that price. Granted you don't get much but it gets you a track record with a bank so when you do go to upgrade then they know you can make payments on a regular basis.


I'm just wondering if this is a new house and have you factored stamp duty in, or is it a new house?

rick_fantastic

yeah ive factored in stamp duty. thats how im getting a negative equity straight off the mark

FreeAnd..

Hey Rick, I would be interested in seeing some of your financial calculations based on a normal and worse case scenario. In these cases best case scenario should never be considered and worst case should always be budgeted for.

Can you handle another 1-2% rate rise? What if you cannot rent a room/all rooms for 1+ months? What if you cannot creativley cook the books for the tax man?

I also think you are weighing into this with shuttered eyes. Things are changing at the moment, its not a case of he who dares wins anymore. The easy money has been made, the train has gone. If you think all of this is worth it to live in a packed house where you can play landlord just to be able to say that you own a house then well in good. I just really hope you know what you are doing and have thought about things rationally and from your own perspective. Are you happy to live in this house for the next 10+ years? No travel, if things go bad no holidays, tied down to a property? Unable to move for work etc....Its a negative picture i know but irelands credit timebomb is quickly nearing the zero hour...

Kinetic^

rick_fantastic wrote:

yeah ive factored in stamp duty. thats how im getting a negative equity straight off the mark

Maybe you should go for a new home then so you won't have to pay it?

BTW, we were 22 at the time of purchase so I understand the urge to get out on your own 2 feet.

I've just had a quick look on myhome.ie and there seems to be quite a few people looking to sell quickly, so you may have some bargaining power.

I'd approach a bank with preliminary figures first though. Remember, the fact that you intend on renting will probably be not considered as a means of income when applying. Banks work out if you can pay several ways. Some use a multiple of your annual wage, whereas others us a % of your monthly take home pay - usually ranges from 30%-40%. So unless you've got a good guarantor, I honestly doubt you'll be even passed for a mortgage of €400k, nevermind what you're currently thinking.