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House prices still falling?
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Ah FFS.
If you paid crazy money (your own words) buying at the height of the boom you were not just misfortunate, you were something else and it is your own fault not anyone elses.
The more I think about it the more I reckon the words "personal responsibility" should be tatooed on some peoples foreheads.
I just find the fact you are telling other posters to cop on slightly ironic.
I didn't pay crazy money for my House and I never said I did what I did say was that they OP was cashing in on someone else's misfortune, and the misfortune was created by someone else. Some people paid crazy money for their houses, they were lead up the garden path(forgive the pun).
So before you go quoting me read what I have said.
The neck of ya.0 -
Its raining now, and im on hols at the moment so i'll type it out now, but i'll post a spreadsheet for one when I get back. Remember this is rough top of the head stuff, but as close as I can remember - and ive had a few pints. But im bored so here goes.
Each property will have an individual plan and its own bank account.
So then I open a bank account for that property (just the way I do it).
All financial dealings associated with that property go to that account (rent, maint, taxes, service charges, etc).
That way you always know whether you are above or below the line with that property.
For an example of another way to do it that works.
My son has one going on an apartment in Dublin in 1999 that he wouldnt sell when I told him, so still has it, but its still above the line for him. From memory - roughly his figures are like this (All in Euros). He also go a mortgage on it which I wouldnt do, but it worked out for him.
I was looking over it with him a few weeks ago, so roughly, from memory this is how his plan and account worked out.
Just for arguments sake im going to round outgoings up and incomings down, as i cant remember exact figures.
1999
Purchase price 130000 + expenses (135000)
Total outlay
€10 deposit + 3000 expenses + 3000 kitting out = €16K
All calculation below are rent minus expenses. Im gonna take off €1000 a month for expenses, for ease, but it averages much lower than that over the time.
Rent in year 1999 = €5050 (not a full year)
Rent in year 2000 = €8000
Rent in year 2001 = €10000
Rent in year 2002 = €11000
Rent in year 2003 = €11000
Rent in year 2004 = €11000
Rent in year 2005 = €11000
Rent in year 2006 = €11000
Rent in year 2007 = €10000
Rent in year 2008 = €9000
Rent in year 2009 = €9000
Rent in year 2010 = €8000
Rent in year 2011 = €8000
You can see how rent went up and then down.
Im going to average his mortgage at €6000 a year too (after taking out MIR), which is erring on the high side of what it really is. He has 30 year mortgage (18 left) and changed to a tracker after a few years too.
So take about 6000 from each year for paying the mortgage and you get
year 1999 = €3000 (not a full year)
year 2000 = €2000
year 2001 = €4000
year 2002 = €5000
year 2003 = €5000
year 2004 = €5000
year 2005 = €5000
year 2006 = €5000
year 2007 = €5000
year 2008 = €3000
year 2009 = €3000
year 2010 = €2000
year 2011 = €2000
Total = €45,000 thats in the property bank account.
So to sum up.
He started the account with minus €16K.
€45,000 went in after costs and mortgage.
So the account had €29K (net of taxes he had to pay) in it after 11.5 years with the mortgage payments made. He has to pay tax at his marginal rate each year so that would eat into each year, so his account ends up much lower than 29K at the end of it.
So hes positive balance, mortgage paid, and only ever dipped into his pocket for €16K at the start which is paid back to him by now.
In another 17.5 years, if things dont get any worse than they are now, he owns it outright and made his initial €16k back many years before.
Even if rents fell below where he makes a profit and he had to add one or 2 hundred a month, he just dips into the bank account belonging to the property.
Now that is just the example thats fresh in my head. The figures are a bit all over the place but you get the idea, and should do your own anyway. Dont depend on mine if you plan to invest. Actually, if you dont know already what you are doing, then i would say stay clear and leave it to people who are used to it.
With my own rules. i never get a mortgage. I pay more taxes than my son. I never borrow (but I realize that borrowing carefully can work out too). Any maintenance I can do myself or know someone who can do it. I sell it the minute it gives me a profit after all outgoings of 50% of what I bought it for. It was 100% but those days seem to be gone for now, so I think 50% is a good target to offload. And I never buy unless the yield is very good from the start and the area is very rentable (In Ireland, this basically means Dublin (Inside a circle encompassing Swords - Naas - Bray)).
So if I cant offload because I dont reach my target the yield still holds good.
And unless you have money to burn do not try this with more than one property. Im lucky to have a lot of cash spare, so can afford to make mistakes, though it kills me if I make one so im very careful before I invest. For instance I havent invested since 2005, but just started again last year. Its working out ok so far, but I wont be gearing up like I did in the past. 2 - 4 in the UK and 2 in Ireland for the moment will be my limit this time. Im old enough to be able to do it for fun and not have to worry about doing it for a living now.
Oh, and ever since I can remember people are always telling other people when to buy and when not to buy.
Ignore them all and decide what works for you.
When I bought my first house we were in the middle of a crash and people were telling me I was mad. Then in 2000 people were going mad to buy, without any plan at all and telling me I should gear up and buy more. And now we're back again to everyone having an opinion that they think is the correct one.
Never trust what anyone else says. Learn how to work out the risks and rewards first for yourself and then you can make an educated decision, whether it turns out to be right or wrong in the long run, at least you went in with your own knowledge.
Would not touch apartments yet, they are dropping in price faster than Usain Bolt
Also the hassle of renting out apartments in Dublin at the moment is not worth it imo.
Ive friends have have lost 1,000's with tenants doing runners these days on rent & also spending a fortune constantly fixing them, they talk every week about off loading them but they dont want to know about how much they have lost on them....but say they will bite the bullet soon.
Its obviously for you though you seem to know your stuff by the looks of it...
Not for me.
A nice house with a garden for the happy family
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Spiritofthekop wrote: »Would not touch apartments yet, they are dropping in price faster than a Usain Bolt
Also the hassle of renting apartments in Dublin at the moment is not worth it imo.
Ive friends have have lost 1,000's with tenants doing runners these days on rent & also spending a fortune constantly fixing them, they talk every week about off loading them but they dont want to know about how much they have lost on them....but say they will bite the bullet soon.
Its obviously for you though you seem to know your stuff by the looks of it...
Not for me.
A nice house with a garden for the happy family
I much prefer apartments for letting. Just far less trouble and less maintenance.
I would never touch a house. More rooms, more outside space, more trouble.
I suppose we are different.
Your friends may just not be suited to the game. Few are tbh.
If you get the right gear in you should have to pay very little on maintenance of an apartment.
Your friends should look at how they vet their tenants. Ive never had a tenant do a runner either. And if they dont know what heir financial position is .... well, it tells you all you need to know about how they run their "business" doesnt it.
Ive rented a couple of apartments in Dublin a few weeks ago for a friend who was on holidays. Couldnt have been easier tbf (thats what has me researching to get back in the game). What hassle are your friends having renting their apartments? Unless they are in Ballymun or some other equally desirable spot. Research, research, accounting and accounting.0 -
This idea that Nama,banks or recievers are going to start selling individual apartments needs to be put to bed. Nama will sell in bulk to developers. It's already started.
As for individuals trying to sell 2nd hand apartments I can't honestly see how they're going to be able to, unless they're in a position to absorb the losses and there cant be too many of them left. I've said it before we're heading towards , if we're not already in, a two tier market .. one for the cash rich and one for those who require a mortgage.
In fairness its always the people who have the cash that get to pick the bones clean. That goes for anything that suffers a downturn.
Ask Warren Buffet what he thinks
Ireland is just getting back to normal. For a long time, people thought that everybody should have been able to afford to buy their own homes. Its never been like that and never (apart from bubble time) will be.
People earning an average wage will always be below the point where they can buy their own home and will just have to rent a home. People cannot all own their own homes as much as they think they deserve to. The more people who can buy a home, the higher prices will go, the higher wages will have to go for the next person .... Look where that went the last time.0 -
In fairness its always the people who have the cash that get to pick the bones clean. That goes for anything that suffers a downturn.
Ask Warren Buffet what he thinks
Ireland is just getting back to normal. For a long time, people thought that everybody should have been able to afford to buy their own homes. Its never been like that and never (apart from bubble time) will be.
People earning an average wage will always be below the point where they can buy their own home and will just have to rent a home. People cannot all own their own homes as much as they think they deserve to. The more people who can buy a home, the higher prices will go, the higher wages will have to go for the next person .... Look where that went the last time.
Not entirely true.
House prices will eventually IMO come down to a natural bottom out value for money price just like they were back in 1994/95/96
We have just gone back into another recession.
http://businessetc.thejournal.ie/cso-gdp-gnp-recession-double-dip-economic-growth-392430-Mar2012/0 -
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House prices in general will level off and at a level higher than most people think .. simply because the huge over supply will be sold to developers who need to make a profit and while their costs have lowered there is a level where it stops making sense.There will of course be a few properties sold below these values by desperate sellers, banks etc but they will not be the norm. Of course there will always be those who will quote these exceptional sales as the true market values but what good is that if you can't actually buy what you want at those values.
IN YOUR OPINION
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So who exactly are you going to buy a house from for 40k that was 200k or 80k that was 400k etc etc. Where's the moron thats going to buy a block of apartments, finish em off and sell them at a loss and can I have his number ?
Well there is no need for a moron like that now that Nama are guaranteeing the price they buy it for.
I hope they know what they are doing with that scheme.
I know if I had the inside track there what I would be doing. Buying, selling to someone I know at a loss, claiming the loss back from Nama. And splitting the difference. 0 -
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