Does buying a 1-bed make sense in this case?

Kenny_D

So I'm currently looking to move out and start renting a place. I really don't like the idea of sharing a house/apartment with people I don't know so looking at a 1-bed apartment/house I figure i'll be looking at 700-800 a month rent.

Is there any logic in me buying a 1 or 2 bed apartment for say 95-100k with a mortgage of about 500 per month, the monthly cost will be less and the rent money will at least be funding my own apartment which I'd hope to have paid off in < 10 years.

For reference, I can put away 1000-1200 a month as is and could put down a 15k deposit. With my own apartment I could pay the mortgage and still save 5-600 a month for a house a little further down the line (i'm 25 btw so not in any major rush to settle down with a huge mortgage for a house).

There's also the possibility of buying it as a joint investment with my father, we would both cover the mortgage and again we'll own an apartment at the end of it all which we can sell or rent once I move somewhere else.

This seems to make sense in my head but I'm sure there's plenty of reasons why I shouldn't so would love to hear peoples thoughts. I'm in a permanent IT job the last 4 years and will be moving out to IBM in mulhuddart in january.

Here's a few examples of what I was looking at:

http://www.daft.ie/searchsale.daft?id=591847
http://www.daft.ie/searchsale.daft?id=598273
http://www.daft.ie/searchsale.daft?id=412786

Appreciate any advice or insights.

Thanks

nino1

Kenny_D wrote: »

Is there any logic in me buying a 1 or 2 bed apartment for say 95-100k with a mortgage of about 500 per month, the monthly cost will be less and the rent money will at least be funding my own apartment which I'd hope to have paid off in < 10 years.

If you are looking to have it paid off in 10 years your mortgage will be €1046 a month not €500 at current interest rates. If interest rates increase which is a strong possibility it would be even more.

riclad

Current rates about 4 per cent, banks look at your salary ,and say Can you afford to pay loan at 6 per cent interest rate.
Most mortgages are at least 25 years.Average service charge apartments 1200 euro per year plus.
Save as much as you can .

trs is a few grand ,off mortgage for 7 years.

see
http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html#section3

StillWaters

One one hand it makes sense, on the other...
you talk about saving to buy a house in the future. If a house is your aim within the medium term, I would say save for a larger deposit and go straight for that.

If you will be happy to live in the apartment for the next 8-10 years, it makes sense, however I would advise going for a 2 bed, it allows you rent a room should you be in need of money/company, and it will be more saleable in the future.

If possible, I would buy the property on your own, not with your father. But thats just me, I'd rather have my own front door key and not be beholden to anyone.

noxqs

Well this is up there with one of the worst ideas I've heard all week.

And for more reasons than I can state in this thread, but go to the property pin website for more details.

Buy because you want to avoid living with people? Are you for real?

First of all, your budget is 700ish, I rented in D15, in fact in Mulhuddart and Blanch for 600 for a 1 bed, fully furnished in nice condition and walking distance to shopping center in both places. Advertised at 700 but easy to negotiate down as there's more then a few tiger bubble apts in the area which arent being rented out to full capacity.

Secondly, the apts you listed there arent even worth 50K - the reserve I've seen for some of them were 30K on auction and they barely sold. You should really look into the auction lists for the areas.

Finally - 1 beds dont sell. There's too much supply, and too poor construction quality and banks generally won't lend to 1beds which further exacerbates the situation which makes it a poor choice all around.

Rent and save for a proper house when time comes. The prices, won't be going up in the next decade - at the least - so you wont miss anything and having a strong cash position in savings beats having debt .. always.

StillWaters

noxqs wrote: »

Secondly, the apts you listed there arent even worth 50K - the reserve I've seen for some of them were 30K on auction and they barely sold. You should really look into the auction lists for the areas.
.

Link please?

Here is a link to auction reserve and selling prices. I can't see any Dublin apartments for anything near €30K.

the_syco

arlingtonrpm wrote: »

There are a lot of information regarding the most famous in which we get the information and sharing the a lot of details of the property management.

This makes no sense

the groutch

the_syco wrote: »

This makes no sense

are you familiar with the initials SITW?

fricatus

Let's say you buy and pay a mortgage of €1k per month, you'll have your own place paid for by the time you're 35. On the upside you'll have your own space during all that time; on the downside it gives you a lot less flexibility in terms of moving.

If you rent at €700 per month, you won't have your own place, but you should be able to have €36k saved up (simplistic calculation I know: €300 p.m. x 10 years). Downside is sharing with others (you'll be sick of it in five years), but the upside is that you'll be able to up sticks with no ties.

Seems to me to be a no brainer. You're with a good employer in a good sector. IBM don't pay all that great, but nor are they likely to fcuk off out of the country and leave you on the dole. To me it depends on whether you're likely to want to head off on a year's drinking in Australia or whether you've decided that you want to stay put in Dublin and enjoy whatever comes.

I would buy, but make sure you buy in a well managed complex and in a good location. Beat them down on price by all means, but if you have to pay a €5-10k premium for a good location or management, it's worth the extra cost.

Good luck!

Kenny_D

noxqs wrote: »

Buy because you want to avoid living with people? Are you for real?

Cheers, appreciate the feedback but I'm not buying because I dont want to live with people, I'm simply looking for my own place because I need my own personal space, whether thats by renting or buying, I'm just not interested in sharing an apartment. I was just wondering if there was any logic in me considering buying rather than renting given that over the next two years I'd be paying out the guts of 17k for rent when it could be coming off a mortgage at the end of which I'll own my own 2 bed apartment.

Do you honestly think those 2 bed apartments are going to drop much further below 100k? Its mainly the one in clonee I'm considering

I may end up just renting but I just thought it was an interesting topic so wanted to hear what people think, I'm nowhere near set in stone on buying anything, I was close to buying a few years ago and have held out and saved instead so I'm not exactly in a rush, it has been an eye-opener over the last few years watching the price of property fall

the_syco

the groutch wrote: »

are you familiar with the initials SITW?

No. It was more so the grammar, or lack thereof that threw me off the meaning of the sentence.

StillWaters

What is SITW?

Roxee

Kenny_D wrote: »

For reference, I can put away 1000-1200 a month as is and could put down a 15k deposit. With my own apartment I could pay the mortgage and still save 5-600 a month for a house a little further down the line (i'm 25 btw so not in any major rush to settle down with a huge mortgage for a house).

Thanks

Are you taking into consideration that banks view 1 bed apartments quite diffferently in lending terms? AIB will only give you up to 75% of the purchase price for a one bed apartment (compared with 92% for a house, so even at the 100k level you're looking at, you'll need 25k up front, not 15.

Personally, apartments would never be my thing, either in terms of how I'd want to live now, or in terms the number of people who'd be in ther market to buy it from me in future. Out of all the potential buyers in future, you're ruling out families or young couples who want a property to grow into. It's a bit like buying a two seater car, I think. Might be grand now, but when you go to sell it, a hell of a lot of buyers will pass it by.

In my opinion (and it's only my opinion!) you could spend 100k in a far wiser way by buying a little 2 bed cottage around Dublin 8 or Rialto etc. There are loads of them. They might need a bit of work initially but purely cosmetic.

engineermike

noxqs wrote: »

Well this is up there with one of the worst ideas I've heard all week.

And for more reasons than I can state in this thread, but go to the property pin website for more details.

Buy because you want to avoid living with people? Are you for real?

First of all, your budget is 700ish, I rented in D15, in fact in Mulhuddart and Blanch for 600 for a 1 bed, fully furnished in nice condition and walking distance to shopping center in both places. Advertised at 700 but easy to negotiate down as there's more then a few tiger bubble apts in the area which arent being rented out to full capacity.

Secondly, the apts you listed there arent even worth 50K - the reserve I've seen for some of them were 30K on auction and they barely sold. You should really look into the auction lists for the areas.

Finally - 1 beds dont sell. There's too much supply, and too poor construction quality and banks generally won't lend to 1beds which further exacerbates the situation which makes it a poor choice all around.

Rent and save for a proper house when time comes. The prices, won't be going up in the next decade - at the least - so you wont miss anything and having a strong cash position in savings beats having debt .. always.

The one bed apt. and its Re - sale / rent-ability is poor
2 bed provides more options from a personal standpoint - and with a view to rental in the future, it would be the more dynamic purchase.
A house of course is a better choice again - with control on maintenance costs and a whole host of other benefits that come with a house as opposed to an apartment.
- Dublin 15 has seen the foot of the market in general, property has begun to move a lot in the general area since Easter.
My company is surveying one house in Dublin 15 per week for the last 2 months or so, and the agents are running around like blue arse flies - offers will creep closer and closer to the asking prices and demand will remain while blue chip IT companies remain based their.
If you were buying west of the shannon, i'd agree that prices won't go up for years to come, - however certain area's of Dublin will always have demand even in the current climate.
mike F

riclad

I agree buy a nice 2 bed house ,100k, no service charges , on street parking.no neighbours living ,above,below you .Probably with a yard out back.older houses ,are even going for
90 minus,city centre, great investment potential.

Carlos_Ray

Kenny_D wrote: »

Cheers, appreciate the feedback but I'm not buying because I dont want to live with people, I'm simply looking for my own place because I need my own personal space, whether thats by renting or buying, I'm just not interested in sharing an apartment. I was just wondering if there was any logic in me considering buying rather than renting given that over the next two years I'd be paying out the guts of 17k for rent when it could be coming off a mortgage at the end of which I'll own my own 2 bed apartment.

Do you honestly think those 2 bed apartments are going to drop much further below 100k? Its mainly the one in clonee I'm considering

I may end up just renting but I just thought it was an interesting topic so wanted to hear what people think, I'm nowhere near set in stone on buying anything, I was close to buying a few years ago and have held out and saved instead so I'm not exactly in a rush, it has been an eye-opener over the last few years watching the price of property fall

In my opinion you should rent a one bedroom. Don't think of it as wasting money, its not, you're paying for a service. You'll enjoy living in your own space for a while, and then later if you decide to move in with a partner etc you can think about buying without having anything hanging over you.

I can't understand why anyone would want to buy an apartment now with all the great deals on houses, much less a one bedroom. Apartments are great for renting for a year or two. You can get an idea about what its like living in different areas before committing to buy somewhere.

Its not as simple as " I pay 700 euro a month in rent, therefore in 10 years I'd have paid for this one bedroom apartment." Management fees, interest rates etc etc, the cost really adds up. Besides, you're in your mid twenties, there's not a hope in hell you'll live in a one bedroom for the next ten years....

Idbatterim

Op i wonder if any properties are coming up in your area that would be subject to the Nama negative equity protection scheme?

http://www.independent.ie/national-news/namas-negative-equity-mortgages-cleared-by-eu-3100992.html