How much would you offer for this property?

lisasimps

Hello all,


Looking for as much advice / peoples opinions on the following.

I have my own business, recently opened but flying it (and very little chance that things would quieten down in the future).

My current lease is up, and although I would love to buy, I assumed I wouldnt have a hope in hell as I have a 20k business loan out and I am only in business around 3 months.

While looking for somewhere to rent, there's been very little thats nice, will accept my two dogs, and within my budget (€700 max).

Then Friday before I went home, out of curiosity I had a look at whats available to buy, and I found this...

http://www.daft.ie/searchsale.daft?id=551904

The locations perfect for me, and even though its small (TINY infact, we went and looked in the windows Friday evening), its clean, and relatively new, and could be made homely. It would also be cheap utility bills, and has a secure garden for my dogs (the concrete is good too, no garden to manage and easy to clean up poop!!).

I had a go off the mortgage calculators, and if I borrowed €65,000 over 10 years it'd be around €600 a month, very manageable.

Its attached to a surveyors, so i'm guessing the survayors built it in the boom to rent out, and are now looking for a quick sale (could be wrong though). In that case my sister suggested approaching the surveyors directly to skip the estate agent fees.


My questions are...
Do you think it would be a good idea to buy this property?

What would you offer? / What do you think would be accepted?

Do you think I have a chance in hell of getting a mortgage approved without any guarintor, given my work circumstances?

How quick could the sale be completed (i know, how long is a piece of string) if everything went to plan?

Thanks everyone for reading this, and all opinions welcome!!

sambuka41

OP i feel your pain with renting and the pets situation!! It can be very tough to find somewhere that suits you,the dogs and then the landlord!

Im not an expert,and not fully up to date on the housing situation my advice would be around your personal stuff. It is very small,and it may suit you now but what about later in life if your circumstances change. You will be using your first time buyers relief on this. And i would say you'd have a very hard time selling it on if you needed a bigger place.

I can imagine that you will find it hard getting a mortgage. My brother inquired informally about a mortgage recently and a minimum of 6 months clear of debt(overdraft and credit cards), as well as being employed for over 1 year.

Good luck with it all

lisasimps

Hi Sambuka, Thanks for getting back to me.

I know what you mean about the size, but in a perfect word, the plan would be to get the 10year mortgage, paying 600 a month, and then increase the repayments as I get busier so I would hope to have it paid off within 6ish years.

The plan would be to rent it for now (im single and 25) and in the future buy a bigger family home.

I agree that it would be very difficult to sell on (which is why I could get it cheap!) but I think it would be relatively easy to rent out (as it stands, I would have been willing to rent if for max 700 if it was available to ) as it's very near to the city and in a good location.

What is first time buyers relief?

My current business is open a few months, and before that I had another small business in the same industry, and before that I was in full time employment.

I was looking at rent to buy recently and contacted the bank about getting a letter of mortgage approval for a property around €300,000. I spoke to the bank manager who approved my business loan. He thought i was applying for a mortgage outright, and while he wasnt very enthusiastic, he wasnt telling me where to go either!

With the business I do, I would also be doing work from home, so technically it would be a business investment

Treehouse72

Lisa, do not under any circumstance buy this "property". It is some kind of converted garage or something!! A total bloody joke. No, no, no, no, no. And the idea you'll get €700 pm for this place in rent is so optimistic it's not true.

You will get a nice apartment or perhaps even a house in Cork for that price in 2 years. The property crash is only half way done....why one earth would you try to catch that falling knife? I know you are excited about your new business - and many congrats on that - but don't blow it by doing something as stupid as buying this ridiculous property.

lisasimps

Hi Treehouse,

Thanks for your advice.
The €700pm rent I was talking about would be in a few years, not any time soon.

I know what your saying about the prices still falling and I completely agree, but im kinda stuck at the moment with the dogs issue and trying to get my own place that i dont need to worry about my dogs distroying!!!

I know you dont agree with buying this place, but IF you had to put a price on it, what would you value it at?

My sister was saying too that I should see if the landlord would agree to allowing me rent the property for 6 months and then make an offer if it suits (rent to buy style), what do ye think?

Treehouse72

lisasimps wrote: »

I know you dont agree with buying this place, but IF you had to put a price on it, what would you value it at?

I don't know the area, but if as you say there is rental potential here I'll take your word on it and value it at some amount under €20,000 on that basis. That would drop to under €10,000 if there is no rental demand. I think it would be a disastrous purchase at any price.

As an aside, I don't know when you think the rental prospects for the property will improve to €700pm. That figure seems to me totally, totally unrealistic at one point in the next 20 years.

Mr. Loverman

I wouldn't be as pessimistic as Treehouse72 on this one (I normally agree with all his posts) but I do think 70k is too much. This type of property should be affordable by someone who doesn't really have any money. So I would think 30k - 35k is about right.

I do think you could rent out this property. It would be desirable ("desirable" might be a bit strong...) to someone who doesn't want to live in an apartment block. Like an old lady or a disabled person or someone like that.

Treehouse72

Mr. Loverman wrote: »

.
I do think you could rent out this property. It would be desirable ("desirable" might be a bit strong...) to someone who doesn't want to live in an apartment block. Like an old lady or a disabled person or someone like that.

Unfortunately, you couldn't fit either a Zimmer frame or a wheelchair down the side passage!!

seithon

I have to agree... thats not a house its a granny flat and thats pushing it.
Maybe 30k ish.. but that's only if it was in a really convenient place.

CarrickMcJoe

Im with Treehouse on this one. You would be left with that if you bought it or end up selling at a massive loss . It is noyhing more than a garage conversion worth about 25k.

iguana

That's honestly worth nothing at all. What's the legal situation with it? I doubt you'd own the freehold. I can't even begin to imagine the head fuçk of living in it. The ownership of the land, the ability to insure it as an independent property, the likelihood of an insurer paying out if it was damaged/burned/subsided. If you are a leaseholder you'd still have to pay ground rent and the owner of the freehold could still prohibit you from having dogs on it.

the_syco

Door opens, all heat goes. It's a joke alright.

=-=

For under €100,000 you could get these two:
http://www.daft.ie/1548526
http://www.daft.ie/1422371

Both need work done to them, with the first one having a garden in it's description. Both are close'ish to Cork city centre. I admit that they'll need work done to them, as they look sh|te, but at the end of the day, they're homes, and can be resold as such. The garage in your post will be a hindrance.

Idbatterim

70K for that is madness, wait till nama starts fireselling properties, remember the apartments in mullingar that were going for a 69k for a 1 bed and 82k for a 2 bed.

lisasimps

Hi guys,

Thanks for all the feedback, its much appreciated since I know nothing about this kind of stuff.

The 'property' is a 4 or 5 minute drive from cork city centre, and a 10 min walk max, so with that, and the parking space I'd be relatively confident it would be interesting to tenants in the future.

Obviously none of us can say for sure where the property market will be in 2, 3 or 4 years time, but I agree with the fact that the nama properties will dramatically drop the average prices of the property market.

Idbatterim i'd partially agree that €70,000 is a lot to ask, do ye all think that the seller is genuinely expecting a number close to that, or would offering €30,000 be something he could be interested in? The thing is, the location alone should put some value on the piece of land, no? The area is a very popular area to live.


the_syco what do you mean about the heat? do you mean its not insulated? Since it's so small im guessing it'd be dirt cheap to heat / electricity etc.
Thanks for going to the trouble of looking up other properties for me, my problem is there's no chance i'd get mortgage approval for €100,000, esp if i had to then put money into the property. This place, though the size of a postage stamp, doesnt need any work and if I had to borrow 30-50,000 it would be more likely to be approved.

I know the property in question isn't much of a 'home' per say, more of a bedsit. i wonder (just a thought) if planning permission would be granted in the future to build another story above and put 1 bed + large bathroom / 2 beds up there?

iguana I'd have to find out the legal situation, but I assume it would be treated as a semi detached property, no?



With regards to first time buyer relief, what exactly is that? I just don't pay a certain tax is it?

Im just really stuck for somewhere to live, and besides the size (which doesnt really bother me to be honest, I work 7am - 7pm so would barely be there!) it has everything i need (parking, secure garden, shed, clean, relatively modern, location is PERFECT, etc).
What's really got me keen is the face I could have it paid off in a few years (especially if they accepted 30 /40,000 and then I could do what I wish with it. 40,000 over 5 years would be 718 a month, and i could increase those repayments in 6months-1 year anyway so i'd expect to have it paid off in 4 years ish.

If I could get a good price for it, would ye tell me to go for it, or still tell me to walk away?

variety

lisasimps wrote: »

my problem is there's no chance i'd get mortgage approval for €100,000, esp if i had to then put money into the property. This place, though the size of a postage stamp, doesnt need any work and if I had to borrow 30-50,000 it would be more likely to be approved.

The problem is that a bank won't lend you mortgage funds unless you have been sel-employed for at least 1 year and have at least 1 set of audited accounts and 12 months of business current accounts. It doesn't matter if you can prove that you can easily afford it - you simply won't meet the criteria and your application will be dismissed before being processed in more detail.

lisasimps wrote: »

With regards to first time buyer relief, what exactly is that? I just don't pay a certain tax is it?

It just means that you don't have to pay stamp duty. And there is still a first time buyer's tax relief at source (check out revenue.ie and search for "TRS") but that is being withdrawn.

Regarding the pets - I have a dog and a cat and have rented 4 places in Ireland with absolutely no problem. Landlords are aware of them, they are written into my lease, and I put an additonal one month's deposit on them for possible damage (so 1 month's deposit, 1 month's additional deposit and one month's rent in advance). I have always had this additional deposit paid back with no deductions.

You are looking in the wrong places if you can't find a LL who will accept pets - get references for the pets (from previous LL's) and offer the additonal deposit for them. I have only had 2 of my LL accept the additional deposit - once you offer it, they see you are genuine and that you trust your pets, so will often decline the additional deposit.

lisasimps

variety wrote: »

The problem is that a bank won't lend you mortgage funds unless you have been sel-employed for at least 1 year and have at least 1 set of audited accounts and 12 months of business current accounts. It doesn't matter if you can prove that you can easily afford it - you simply won't meet the criteria and your application will be dismissed before being processed in more detail.


It just means that you don't have to pay stamp duty. And there is still a first time buyer's tax relief at source (check out revenue.ie and search for "TRS") but that is being withdrawn.

Regarding the pets - I have a dog and a cat and have rented 4 places in Ireland with absolutely no problem. Landlords are aware of them, they are written into my lease, and I put an additonal one month's deposit on them for possible damage (so 1 month's deposit, 1 month's additional deposit and one month's rent in advance). I have always had this additional deposit paid back with no deductions.

You are looking in the wrong places if you can't find a LL who will accept pets - get references for the pets (from previous LL's) and offer the additonal deposit for them. I have only had 2 of my LL accept the additional deposit - once you offer it, they see you are genuine and that you trust your pets, so will often decline the additional deposit.

I could probably get a personal loan / credit union loan if the ammount is less than 50,000.

I've been looking for somewhere nice for a while now to rent but the majority say no to dogs, and those that don't, the place doesnt turn out to be that nice. To be honest, i'd much prefer to buy something anyway as apposed to spending dead money.

At least at the end if the 5 years I'll have a property to do something with. Even if its only worth 10,000, at least its worth more than 5 years rent

variety

lisasimps wrote: »

I could probably get a personal loan / credit union loan if the ammount is less than 50,000.

That would be a possible option - but €50,000 is a huge amount for someone to lend if it's unsecured.

lisasimps wrote: »

I've been looking for somewhere nice for a while now to rent but the majority say no to dogs, and those that don't, the place doesnt turn out to be that nice.

So expand your search area - I wanted Cork City but that gardens were too small for the dog, so I moved into Douglas.

lisasimps wrote: »

To be honest, i'd much prefer to buy something anyway as apposed to spending dead money.

:eek: You need to do a search here for "rent is dead money" and see what nonsense that is. It doesn't sound as if you've done much research.

lisasimps wrote: »

At least at the end if the 5 years I'll have a property to do something with. Even if its only worth 10,000, at least its worth more than 5 years rent

But how much will you have saved if you hadn't been spending "dead money" on rent to the bank in the form of interest?

lisasimps

variety wrote: »

That would be a possible option - but €50,000 is a huge amount for someone to lend if it's unsecured.


So expand your search area - I wanted Cork City but that gardens were too small for the dog, so I moved into Douglas.
I've been searching everywhere from Midleton to Ballincollig, and Kileens to Riverstick!! I'm not too pushed on having to be in the city centre, but obviously it's a perk! I've a pretty open opinion in regards to location, and quite a few places have allowed pets, but they're either above my budget, or really dingy. I'm not divaish, but I work long hours and i'd love to have somewhere nice to come home to in the evening to relax where there aren't too many spiders

:eek: You need to do a search here for "rent is dead money" and see what nonsense that is. It doesn't sound as if you've done much research.
As I said in my first post, I haven't been looking to buy as I assumed all properties would be way out of my price range, its only since i came across this property i've become intrigued. I assume what you mean about people saying rent not being dead money is that with property prices falling, the fall in value over a year is more than the cost of a years rent? Thats interesting, and i'd probably agree

But how much will you have saved if you hadn't been spending "dead money" on rent to the bank in the form of interest? I don't really get what your saying here? That I'll be paying the bank interest? What I was implying was that if i rent for 5 years at about €700 a month, i'll have spent €42,000, but if I borrowed that, and repayed it over 5 years, at least at the end of it I'll still have a property to either rent, try to sell, or live in!

I know it's mad buying at the moment because a week later you are in negative equity, and i'd completely agree with that when someone's buying a 4 bed semi-detached for €300,000 with a 25 year mortgage, but surely with a 5 year mortgage it wouldnt be the end of the world?

spockety

:eek:

Just :eek:

oceanclub

I presume anyone mad enough to live in this place has absolutely no intention of ever getting laid.

As for €700 a month rent; my old apartment in Dublin city centre - a proper spacious one-bed apartment - is going for €700. I find it hard to believe that an extension in Cork would get the same rent. Based on daft.ie, rents for bedsits in Cork city are around €400 p.m. right now.


P.

lisasimps

oceanclub wrote: »

I presume anyone mad enough to live in this place has absolutely no intention of ever getting laid.

As for €700 a month rent; my old apartment in Dublin city centre - a proper spacious one-bed apartment - is going for €700. I find it hard to believe that an extension in Cork would get the same rent. Based on daft.ie, rents for bedsits in Cork city are around €400 p.m. right now.


P.

Firstly, there is no need to be insulting. I am here genuinely looking for advice and peoples opinions on the value of the property.

Secondly, the €700pm rent price I was quoting would be a price that I would hope possibly to get in the future, in around 5 years, but hopefully by then i'd have paid off the mortgage, to the rent price could be negotiable.

At the moment the property has everything I would require (parking, secure garden, location, clean etc.) so personally I would be willing to pay €600-€700 if it was furnished. And no, i'm not mad (although if I was I wouldn't tell you )

jmayo

Treehouse72 wrote: »

Lisa, do not under any circumstance buy this "property". It is some kind of converted garage or something!! A total bloody joke. No, no, no, no, no. And the idea you'll get €700 pm for this place in rent is so optimistic it's not true.

You will get a nice apartment or perhaps even a house in Cork for that price in 2 years. The property crash is only half way done....why one earth would you try to catch that falling knife? I know you are excited about your new business - and many congrats on that - but don't blow it by doing something as stupid as buying this ridiculous property.

Couldn't agree more.
That is a converted garage.
It doesn't matter if it is in the middle of the city, it is still a converted garage with a tunnel running down the side to your main and only entrance I presume.

lisasimps wrote: »

Hi Treehouse,

Thanks for your advice.
The €700pm rent I was talking about would be in a few years, not any time soon.

I know what your saying about the prices still falling and I completely agree, but im kinda stuck at the moment with the dogs issue and trying to get my own place that i dont need to worry about my dogs distroying!!!

I know you dont agree with buying this place, but IF you had to put a price on it, what would you value it at?

My sister was saying too that I should see if the landlord would agree to allowing me rent the property for 6 months and then make an offer if it suits (rent to buy style), what do ye think?

OP I sincerly hope you don't make business decisions like you view properties
The bubble is over and the days of some spanner getting away with selling a piece of sh**e like this as an actual home are gone.

I stayed in something like that when I was a student and it was rented as such.
It's granny flat or a glorified bedsit and as such it will never get decent rent.

It's almost as bad as some tullip recently selling or renting a big backgarden shed as some magnificent property at an astromical price.

You can get houses for €700 pm.

BTW I presume your dogs are tiny ?

oceanclub

lisasimps wrote: »

Firstly, there is no need to be insulting.

That's not me being insulting. That's me being funny. Honestly, the insulting is far worse.

Secondly, the €700pm rent price I was quoting would be a price that I would hope possibly to get in the future, in around 5 years

OK, I really don't get this. How do you know how much rent you will get in future? The country is only at the start of a major depression due to the fact that, for the foreseeable future, a third of our entire tax bill will be used to prop up the banks. A realistic strategy would be to assume that at best, rents flatline.

So how much do you think you will get now, and how much of a shortfall will you have every month to cover the mortgage, factoring in that you won't be getting 12 months of rent a year, you have to pay for the furniture, there's probably a property tax coming in, etc.

At the moment the property has everything I would require (parking, secure garden, location, clean etc.) so personally I would be willing to pay €600-€700

What "garden"? It has a bit of a backyard. How big are your dogs?

"Clean"? You're buying a property because it's clean? You know you can clean places yourself. What about the fact it's tiny? Once you put a double bed in the bedroom, half of that space is gone.

How ones "feel" is entirely irrelevant when it comes to renting property. How the market feels is what counts. And looking at daft.ie, €700 is the absolute upper limit in Cork for this kind of place; most are €400ish.

P.

lisasimps

jmayo wrote: »

Couldn't agree more.
That is a converted garage.
It doesn't matter if it is in the middle of the city, it is still a converted garage with a tunnel running down the side to your main and only entrance I presume.

There's the front door down the tiny passage way, and sliding doors into the back garden

OP I sincerly hope you don't make business decisions like you view properties

I haven't made any decisions yet, i'm merely looking for advice. And my business is very successful, so obviously any business decisions I have made up to this point have been the right ones

The bubble is over and the days of some spanner getting away with selling a piece of sh**e like this as an actual home are gone.

I stayed in something like that when I was a student and it was rented as such.
It's granny flat or a glorified bedsit and as such it will never get decent rent.

It's almost as bad as some tullip recently selling or renting a big backgarden shed as some magnificent property at an astromical price.

You can get houses for €700 pm.I know this, but over the last 2.5 / 3 months I havent found one that ticks all the boxes

BTW I presume your dogs are tiny ? Medium sized dogs, they go to my brothers during the day as he lives near my business premises and he walks them so they are tired coming home with me

I get what everyone is saying, and I agree its tiny and was probably previously a garage. I understand that.

Now, if someone was in the market for a converted garage, and stumbled across this property, and WANTED it, what would you suggest they offered?

We all know its on at €70,000 and we all agree that its greatly over valued. Now pretend your an estate agent valuing it, what price would you put on it.

Genuinely please, no need to say you wouldn't accept it on your books, hypothetically people, hypothetically!


I know ye all think its pure cheek for the owners to build a property so small and try and claim it as a house, but it is what it is!

the_syco

lisasimps wrote: »

the_syco what do you mean about the heat? do you mean its not insulated? Since it's so small im guessing it'd be dirt cheap to heat / electricity etc.

Sorry, missed the side door in picture 2.

lisasimps wrote: »

iguana I'd have to find out the legal situation, but I assume it would be treated as a semi detached property, no?

Does it have it's own ESB meter, it's own phone line and it's own plumbing that is seperate from the house it's attached to? I have my doubts.

lisasimps wrote: »

I work 7am - 7pm so would barely be there!) it has everything i need (parking, secure garden, shed, clean, relatively modern, location is PERFECT, etc).

Your dogs will be in a small concrete yard for at least 12 hours a day?

According to OSI maps, 5a Mount Pleasant Road is the corner house with a back garden that looks the length of the back room in the house. I assume both dogs are very small?

lisasimps wrote: »

I've been looking for somewhere nice for a while now to rent but the majority say no to dogs, and those that don't, the place doesnt turn out to be that nice.

Are you using the "pets allowed" option on daft.ie, yes?

http://www.daft.ie/2946492 doesn't look too bad.

=-=

As said above, you'll be getting €400 a month now. if rents fall, you'd be getting less.

lisasimps

oceanclub wrote: »

That's not me being insulting. That's me being funny. Honestly, the insulting is far worse.well personally i found the comment insulting



OK, I really don't get this. How do you know how much rent you will get in future? The country is only at the start of a major depression due to the fact that, for the foreseeable future, a third of our entire tax bill will be used to prop up the banks. A realistic strategy would be to assume that at best, rents flatline.

ok, maybe the €700 was over estimating its value, no biggie. I did say that i'd hope possibly, but if im wrong, im wrong, only time will tell;)

So how much do you think you will get now, and how much of a shortfall will you have every month to cover the mortgage, factoring in that you won't be getting 12 months of rent a year, you have to pay for the furniture, there's probably a property tax coming in, etc.

i'd want to live in it for now, for the foreseeable future



What "garden"? It has a bit of a backyard. How big are your dogs?

Biggish dogs, they'd only be there when im there (7.30pm - 6.30am, and weekends) and theres a park 2 mins away, so really i only need somewhere for them to go to the toilet, and the concrete makes it easy to clean!

"Clean"? You're buying a property because it's clean? You know you can clean places yourself. What about the fact it's tiny? Once you put a double bed in the bedroom, half of that space is gone.

what I mean by clean, is wooden floors, newish units, etc. i suppose i mean modern, i just don't fancy the thought of renting / buying where the previous occupiers were elderly / students. Not discriminating against either, but you know what i mean, old fashioned carpets, old kitchen fittings, etc

How ones "feel" is entirely irrelevant when it comes to renting property. How the market feels is what counts. And looking at daft.ie, €700 is the absolute upper limit in Cork for this kind of place; most are €400ish.

P.

im looking at peoples opinions on buying the property. As people have stated and i agree, it would be difficult to sell on, so in the future if i move on, id probably let it, and I would price it then at what ever estate agents recommend

oceanclub

lisasimps wrote: »

im looking at peoples opinions on buying the property. As people have stated and i agree, it would be difficult to sell on, so in the future if i move on, id probably let it, and I would price it then at what ever estate agents recommend

What happens when you're in negative equity, with an unsellable house extension (for that is what you're buying) and your rent is half the mortgage?

P.

Think very carefully, don't just buy because "rent is dead money" mortgage interest is also dead money!

lisasimps

the_syco wrote: »

Sorry, missed the side door in picture 2.


Does it have it's own ESB meter, it's own phone line and it's own plumbing that is seperate from the house it's attached to? I have my doubts.


Your dogs will be in a small concrete yard for at least 12 hours a day?

According to OSI maps, 5a Mount Pleasant Road is the corner house with a back garden that looks the length of the back room in the house. I assume both dogs are very small?


Are you using the "pets allowed" option on daft.ie, yes?

http://www.daft.ie/2946492 doesn't look too bad.

=-=

As said above, you'll be getting €400 a month now. if rents fall, you'd be getting less.

Hi The-sycho. Thanks for that daft property, found it last week and have an appointment to see it later, it doesnt look too bad in the pics but we'll see later. Ive been using the pets allowed, but a lot of places say not allowed but have agreed when i ask, so ive been searching everything!!

Ill find out about the esb etc.

The dogs go to my brothers while I work, so they are exhausted at the end of the day and just sleep when they get home!

I wouldnt really plan on renting it until the mortgage was paid off, so the value of the rent wouldnt cripple me.

lisasimps

oceanclub wrote: »

What happens when you're in negative equity, with an unsellable house extension (for that is what you're buying) and your rent is half the mortgage?

P.

hopefully i'd have the mortgage paid off after 5 years and i'd stay in the property until then at the earliest.

Ortiz

Hi lisasimps,

I'd honestly start with an offer of €25 - €30k. Just see what feedback you get.

It took 30 posts but someone finally answered the question you asked