Rent to buy Advice needed

Dannyboy1987

Hi Boarders

I am looking at a rent to buy option on a 3 bed duplex for €95k. The deal is that the rent is €500 a month up to a term of 36months, If you get a mortgage within the first year they will give you a discount of 10% of the €95k. The deposit to put down is €2k.

My situation i am 24 and my partner is 23, I am in a full-time permanent job and my partner is in a part-time permanent position. We had a chat with our bank and was told we wouldn't have a problem getting a mortgage for between €180-200K.

Me personally would rather get the cheapest place possible that looks well ie the duplex. A mortgage over 35years works out at €350 a month fixed for 5 years.

Any advice would be great

killers1

Dannyboy1987 wrote: »

Hi Boarders

I am looking at a rent to buy option on a 3 bed duplex for €95k. The deal is that the rent is €500 a month up to a term of 36months, If you get a mortgage within the first year they will give you a discount of 10% of the €95k. The deposit to put down is €2k.

My situation i am 24 and my partner is 23, I am in a full-time permanent job and my partner is in a part-time permanent position. We had a chat with our bank and was told we wouldn't have a problem getting a mortgage for between €180-200K.

Me personally would rather get the cheapest place possible that looks well ie the duplex. A mortgage over 35years works out at €350 a month fixed for 5 years.

Any advice would be great

Sounds like they've really covered themselves on the 'interest free' period if they are willing to reduce the purchase price by nearly €10k if you buy in year 1. I wonder what they'd sell for if you approached them with mortgage approval or as a cash buyer? 92% finance on a property costing say €85k is €78,200 meaning you only need a deposit of €6,800. 'Rent' of €500pm is €18k over 3 yrs, repayments on a mortgage over 3 yrs @€;350 = €12,600. I think if you could get the deposit together and agree a purchase price of €80-€85k you'd be better off taking out a mortgage to buy it outright.

The_Conductor

Have a look at the other 'rent-to-buy' schemes and people's experiences of them in this forum. The consensus would appear to be- get a decent discount off them up front rather than engaging in rent-to-buy shenanigans. If the company goes up the wall in year 3- you're simply a tenant- but may be tied into purchasing at a pre-determined price, which in some cases has been enforced by liquidators.

Personally- and I live in a duplex- if you and your partner intend to live there long term and hope to have children- don't even consider a duplex- get a nice little house somewhere, with a garden, and *no* management company.

If you and your partner do not view this as a long term arrangement- aka somewhere you'll be in 20 years time- do not consider buying this under any circumstances whatsoever...........

Ignore all the bull about renting being dead money- anyone who has rented since late 2006- is significantly better off than anyone who bought property- in most cases by tens of thousands or even hundreds of thousands of Euro.......

Irish economic fundamentals do not support a return to stability in Irish property prices in the near to medium term (notwithstanding hyperbole from the Central bank to the contrary see here) Unless you have some need to buy your own property instead of renting- you're probably significantly better off continuing to rent.

If you are insistent on going down the buy-to-rent route- have a good solicitor go through the contract line by line and ensure you don't commit yourself to anything you're not 100% happy with.

Dannyboy1987

Thanks for the advice guys. I understand what you are saying about renting but it does kill me paying someone else and not putting anything off my own home for €350 between two people is nothing per month . Its somewhere i could see us living for short to medium term (ie. 5-10 years ) with a view of letting it out and buying elsewhere if the country's circumstances changes within that time to start a family.

I have done my travelling and want to settle here. Really just looking to get started with a place i can call home.

The joys of growing up

Gooner111

Anychance of posting a link to the place/seller so that we can see it?

If you can save a bit while renting then would imagine that the bank would give you a mortgage within the first year which will let you avail of the 10% discount.

Talk to the bank and see what they would want to see form you in order to qualify within the year.