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Buy second property now or not?

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  • 13-02-2008 5:32pm
    #1
    Fruiti
    Closed Accounts Posts: 77 ✭✭


    Hi there - I'm new enough to this forum and just looking for any advice on buying a second house in Dublin 8. My partner and I currently own a 1 bed house in the city centre and are living there happily although we would like a bigger place (cost 320k, mortgage 298k). we've recently considered buying a second house (similar area - 450k ish) which is much bigger and we've checked things out and could afford the repayments assuming we could let the first house. Basically we don't really want to sell our first home - is this silly? should we put it on the market? i suppose we'd like to hold onto it if possible. BTW we're both 25 and in permanent jobs, joint income of 102k per annum


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    #2
    A Random Walk
    Closed Accounts Posts: 346 ✭✭A Random Walk


    Fruiti wrote: »
    (cost 320k, mortgage 298k). we've recently considered buying a second house (similar area - 450k ish)
    It sounds extraordinarily risky to me. Considering house prices have fallen by 10 to 20% across the board, I wouldn't be surprised if your 320k house is now worth much less and you could be in negative equity. In which case you would be in trouble if you went to sell. I'm assuming you haven't been in the house long as your mortgage is still so high.

    You now want to add another 450k to your existing 300k mortgage? On a salary of 100k? I can't see any bank giving you that and for your own sake I hope they wouldn't.

    You say you are dependent on lettings paying your mortgage. What happens if you have trouble renting at the price you are looking for? I have not seen a single house in recent memory where rental income exceeds the mortgage repayments.

    Don't forget the stamp duty you would pay if your original house became an investment.

    Why are you looking to move so quickly after buying your first house? This will cost you dearly.


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    #3
    Fruiti
    Closed Accounts Posts: 77 ✭✭Fruiti


    yes I know you're right, it sounds so sensible! i suppose we're just thinking that it could be a good time to buy (a second home which we would live in long term) as prices have dropped and perhaps in a couple of years they'll have increased again. also - salary increase of circa. 25k is amost guaranteed this summer and we have savings of 45k. so we should probably wait until then anyway and see how prices are then. :confused:


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    #4
    How Strange
    Registered Users Posts: 6,339 ✭✭✭How Strange


    Fruiti wrote: »
    yes I know you're right, it sounds so sensible! i suppose we're just thinking that it could be a good time to buy (a second home which we would live in long term) as prices have dropped and perhaps in a couple of years they'll have increased again.

    Don't go believing the hype being perpetrated by the building industry. There is absolutely no guarantee that prices will rise at all in the next couple of years. If anything prices could continue to fall for next 2 years.
    salary increase of circa. 25k is amost guaranteed this summer and we have savings of 45k. so we should probably wait until then anyway and see how prices are then. :confused:
    Yes, least wait until that 25k increase is agreed and in your hand.


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