To rent or not to rent..

Fizzlesque

I love having my own house. Before buying it (7 years ago) I spent 3 years living in a tiny bedsit, and eventually that was really starting to have a negative impact on my life. Like living in a caravan without the holiday feeling. Although I house shared for a few years before moving in to the bedsit, mostly I've lived alone (apart from a few years of living with a boyfriend) since moving out of my family home (when I was 19) and I never really liked sharing - much prefer my own space.

I was lucky, I had a decent deposit so my monthly mortgage repayment isn't much more than my bedsit rent was. It really made sense for me to buy a house and has turned out to be one of the best decisions I've ever made. Took me a month to stop sleeping sitting room and get used to having more than one room and an upstairs too. Great to finally be able to invite more than one person over for a visit or for dinner. 7 years later, I still love my house and have absolutely no regrets buying it.

I can understand people's worries about buying a house, if they don't know where they'll be (or want to be) in X amount of year's time - I felt exactly the same until the year I bought my house, but, having been given notice to move out of rented accommodation a few times and then, as mentioned above, the negative effect of living in a tiny space for so long, combined with the natural changes getting older brought about, one day the idea that had been very unappealing to me became very appealing. I lived in other countries and did a lot of travelling in my twenties, so I don't feel like I'm trapped or stuck. If anything, after years of being a bit adrift, I absolutely love the grounding effect having my own home has had on me.

Then again, I'm in my forties now, but I would never have been able to consider taking on a mortgage in my twenties, or even my early thirties.

I don't think anyone here can advise you what to do, OP, but I wouldn't let the fear of what'll happen if/when you meet someone you're serious about be a deciding factor. You might meet someone with their own house already, or someone who prefers to rent same as you do. Or someone who has no intention of living with another person. It sounds like you hope to have a family one day - do you? Even if you do, that still shouldn't be something you focus on now with regard to deciding whether or not to buy. If being able to move at the drop of a hat (or a month's notice) is something you currently value, then starting a family is unlikely to be something you're thinking about either. In which case, why worry about other people's feelings on owning their own house. Same goes if the day does come when you feel you'd like to own your own house - don't worry about what others feel about renting. It's your life, do it your way.

Shenshen

WumBuster wrote: »

Im coming to the conclusion that the smartest thing to do is just to keep renting rather than buying my own property.Ive no real interest in owning one or buying or the hassle and rigmarole that goes with it. I like to just be able to up and move with a drop of a hat(or a month's notice). We are a nation that places high value on owning their own property and i just fear down the line I will have difficulties in getting a partner to settle down with if I only want to rent. So there is pressure in that regard. This ''John and Mary down the road are only renting'' mentality. Do you think it's a big deal? Countries in Europe such a holland and Germany people mainly rent because they have enough common sense to see that life is too short to get yourself in over your head in debt that you may never be able to pay back. That is all.

In countries such as Germany, there is legislation inplace that guarantees affordable rents, and flats/houses for as long as you need or want them.

Here, as a tenant you're at the mercy of your landlords greed.
That's why I would say that here, renting is a good idea if you don't have a family and want to be flexible.
As soon as you want to settle down, buying does become the better option, I'm afraid.

Shenshen

Shryke wrote: »

I speak from my own experience with people, I'll let you be the expert on pub talk. You're dreaming if you think Irish people aren't obsessed with property. That's about the last thing I would expect anyone to deny, even on here.

More obsessed than a nation with a tradition of giving a new-born a special savings account called "build-safe", to save up hundreds of thousands so they can then eventually build (not buy!) their own house?

naughtysmurf

Just a question for those who decide not to buy and to rent long term, do you save a substantial amount each month to cover your rental costs after you stop working or retire & your income generally speaking drops, sometimes significantly?
Just wondering

Captain Chaos

naughtysmurf wrote: »

Just a question for those who decide not to buy and to rent long term, do you save a substantial amount each month to cover your rental costs after you stop working or retire & your income generally speaking drops, sometimes significantly?
Just wondering

I'll never earn enough to get or pay off a mortgage so I have to rent. When I have to retire the age will probably be 70 odd and if I still happen to be alive at that age I'll be very lucky with my family medical history.

naughtysmurf

naughtysmurf wrote: »

Just a question for those who decide not to buy and to rent long term, do you save a substantial amount each month to cover your rental costs after you stop working or retire & your income generally speaking drops, sometimes significantly?
Just wondering

you mean my pension? :pac:

christmas2012

listen if buying a house will make you broke dont do it,otherwise bite the bullet away,the good thing about now is house prices are as low as they will ever be apparently,but they havent bottomed out yet,although frisky auctioneers and sellers will want you to buy saying they wont be as low as they are now,blah blah blah,dont fall for their garbage,there all a bunch of lying weasels be careful if your looking for a house,make sure you know what to expect and look for faults you may have to spend thousands fixing that they fogot to mention :pac:

WumBuster

Fizzlesque wrote: »

I love having my own house. Before buying it (7 years ago) I spent 3 years living in a tiny bedsit, and eventually that was really starting to have a negative impact on my life. Like living in a caravan without the holiday feeling. Although I house shared for a few years before moving in to the bedsit, mostly I've lived alone (apart from a few years of living with a boyfriend) since moving out of my family home (when I was 19) and I never really liked sharing - much prefer my own space.

I was lucky, I had a decent deposit so my monthly mortgage repayment isn't much more than my bedsit rent was. It really made sense for me to buy a house and has turned out to be one of the best decisions I've ever made. Took me a month to stop sleeping sitting room and get used to having more than one room and an upstairs too. Great to finally be able to invite more than one person over for a visit or for dinner. 7 years later, I still love my house and have absolutely no regrets buying it.

I can understand people's worries about buying a house, if they don't know where they'll be (or want to be) in X amount of year's time - I felt exactly the same until the year I bought my house, but, having been given notice to move out of rented accommodation a few times and then, as mentioned above, the negative effect of living in a tiny space for so long, combined with the natural changes getting older brought about, one day the idea that had been very unappealing to me became very appealing. I lived in other countries and did a lot of travelling in my twenties, so I don't feel like I'm trapped or stuck. If anything, after years of being a bit adrift, I absolutely love the grounding effect having my own home has had on me.

Then again, I'm in my forties now, but I would never have been able to consider taking on a mortgage in my twenties, or even my early thirties.

I don't think anyone here can advise you what to do, OP, but I wouldn't let the fear of what'll happen if/when you meet someone you're serious about be a deciding factor. You might meet someone with their own house already, or someone who prefers to rent same as you do. Or someone who has no intention of living with another person. It sounds like you hope to have a family one day - do you? Even if you do, that still shouldn't be something you focus on now with regard to deciding whether or not to buy. If being able to move at the drop of a hat (or a month's notice) is something you currently value, then starting a family is unlikely to be something you're thinking about either. In which case, why worry about other people's feelings on owning their own house. Same goes if the day does come when you feel you'd like to own your own house - don't worry about what others feel about renting. It's your life, do it your way.

Thanks for pointing out the different ways of ''settling down'' I guess its not all cut and dried I suppose i would like to sumday but finding that ''one'' is the tricky part! And im under no illusions, being a rent only chap WILL narrow my options. And thats perfectly understandable. Renting can be a pain in the hole, especially for a young family.And it gives people a sense of security and/or working towards something when they buy their own home.

Listen i could just as easy change my mind in 5 years, its just you hear so many horror stories since the recession about negative equity, broken marriages/court cases, shoddy building work and nightmare neighbours that you just kinda figure is it worth the hassle? Thanks to all who replied, to be honest most of the stuff I kinda figured already but I supposed I just needed that little bit validation that Im not ''the only one'' feeling a bit conflicted about this.

daltonmd

naughtysmurf wrote: »

Just a question for those who decide not to buy and to rent long term, do you save a substantial amount each month to cover your rental costs after you stop working or retire & your income generally speaking drops, sometimes significantly?
Just wondering

For those who choose to rent long term then I would imagine that they would be in a better position and have plenty of time to make the adequate provisions for themselves.

The question I would ask of buyers is, do you save a substantial amount each month to cover rising interest rates, falling disposable income (due to tax hikes, cost of living) impending property taxes,water charges, maintenance?

For those who bought in 2003/4/5/6/7, many of whom are struggling now - will they survive to retirement in the home that they bought?

Dave!

Do they still do 100% mortgages? I presume not.

Cos a friend was telling me someone he knows is looking for a mortgage now, and he has 30k saved for the deposit. I said that it would just break my heart to hand over 30k, when really on a day-to-day basis there is no difference between renting a place and mortgaging one. You can renovate a place that you're mortgaging if you're so inclined, and you will obviously have a good asset in 30 years or however long, but until then you might as well be mortgaging!


There are other benefits too I'm sure, but ultimately if I was mortgaging I'd spend my days thinking "So now I only owe E245,000..."

I'm only 24, I'm sure I'll look to buy a house eventually, but not until I'm absolutely sure that I'm ready to settle down and I have a solid career.

dttq

WumBuster wrote: »

Im coming to the conclusion that the smartest thing to do is just to keep renting rather than buying my own property.Ive no real interest in owning one or buying or the hassle and rigmarole that goes with it. I like to just be able to up and move with a drop of a hat(or a month's notice). We are a nation that places high value on owning their own property and i just fear down the line I will have difficulties in getting a partner to settle down with if I only want to rent. So there is pressure in that regard. This ''John and Mary down the road are only renting'' mentality. Do you think it's a big deal? Countries in Europe such a holland and Germany people mainly rent because they have enough common sense to see that life is too short to get yourself in over your head in debt that you may never be able to pay back. That is all.

As a renter let me ask you this, how is renting the smartest thing to do considering (i) you are paying your landlords mortgage and not your own (ii) paying as much monthly as you would on a mortgage on a property unlike a mortgaged house you will never own and (iii) still be paying rent as an OAP.

**** renting, most rented houses and apartments are run down hovels with no freedom to do you want with it, and not to mention the constant threat of eviction.

H2UMrsRobinson

I rent at the moment and fortunately have found somewhere in an area we love that's quite reasonable. But there is definitely a shortage of decent rental accommodation for families/long term renters. I don't want to sleep in someone else's bed or use someone elses cutlery. We struggled to find an unfurnished place as we have quite a bit if our own furniture. We had to ask our current landlord if he could take all the crappy furniture out. Fortunately he didn't mind. But some of the garbage landlords put into rental properties is shocking. Rent is a fee for a service in my eyes and I'm the landlords "customer" and deserve to be treated as such, i.e I'm always right

Scioch

Yeah thinking on it I say buy now and you'll always have the option of selling and renting and living the life later on. Money paid on a mortgage is money you can get back in future. If a mortgage payment is as much as rent (I dunno if it is) then its the logical choice to buy.

daltonmd

LordSmeg wrote: »

Yeah thinking on it I say buy now and you'll always have the option of selling and renting and living the life later on. Money paid on a mortgage is money you can get back in future. If a mortgage payment is as much as rent (I dunno if it is) then its the logical choice to buy.

Eh, not quite.

Some people call rent dead money - what would they call interest on the capital that you borrow for the property?

Logical Fallacy

Dave! wrote: »

Do they still do 100% mortgages? I presume not.

Cos a friend was telling me someone he knows is looking for a mortgage now, and he has 30k saved for the deposit. I said that it would just break my heart to hand over 30k, when really on a day-to-day basis there is no difference between renting a place and mortgaging one. You can renovate a place that you're mortgaging if you're so inclined, and you will obviously have a good asset in 30 years or however long, but until then you might as well be mortgaging!


There are other benefits too I'm sure, but ultimately if I was mortgaging I'd spend my days thinking "So now I only owe E245,000..."

I'm only 24, I'm sure I'll look to buy a house eventually, but not until I'm absolutely sure that I'm ready to settle down and I have a solid career.

Anyone who was smart with their cash during the boom may not even need a mortgage at the moment. It all really depends on where you want to live.

Varied

I would love to have a couple of grand to invest in apartments in Dublin city. I'd still rent my own gaffe though.

ninebeanrows

House prices are now at a level where i would consider purchase.

Rents are far too high in relation to house prices.

1,000 a month for a place worth 150k.

Think i'd prefer to be chipping away at it the throwing it away.

Considering it would have still been 1,000 a month in the same house 5 years ago but the house would have been worth 350k

BraziliaNZ

Yeah I've been abroad for a while now but rent prices seem to be the same as they were back in 2008/2009, maybe a little bit cheaper, but not for anything half decent. What's the story with that?

Scioch

daltonmd wrote: »

Eh, not quite.

Some people call rent dead money - what would they call interest on the capital that you borrow for the property?

I dunno.... interest ? But you still have an asset behind that to show for your payments. You may sell your house for a small profit overall, you will get something back regardless though. If its a choice between €100 a week for rent or a mortgage then I'd say mortgage because at least you have some recommence from it unlike renting.

Depending on the market it may even be seen as an investment rather than a bill.

daltonmd

BraziliaNZ wrote: »

Yeah I've been abroad for a while now but rent prices seem to be the same as they were back in 2008/2009, maybe a little bit cheaper, but not for anything half decent. What's the story with that?

They took the big falls in 2009 as far as I recall. Prior to that they were outrageously high. Part of the problem is the BTL market, a lot of people in trouble repaying these mortgages so rent reductions a no - no add to that rent allowance. They have started the reductions so it may take a whole before they filter through.

In good rental areas prices are holding out as demand is strong, particulary for family homes, I know this as I am in the process of moving out a bit more for a better home at a much cheaper price.

daltonmd

LordSmeg wrote: »

I dunno.... interest ? But you still have an asset behind that to show for your payments. You may sell your house for a small profit overall, you will get something back regardless though. If its a choice between €100 a week for rent or a mortgage then I'd say mortgage because at least you have some recommence from it unlike renting.

Depending on the market it may even be seen as an investment rather than a bill.

But you are paying for that asset. Take this example. If I took out a mortgage tommorow for 180k and the interest was 6% over the entire term. (Rough figures)

The monthly repayment is about 1100 euro and guess how much the interest is? For the first year it is 900pm and by year 5 it decreases to 830pm, so you never repay 300pm off the capital in the first 5 years.
By the end of the term I will have paid over 200k in interest payments alone.

If you pay 100 a week in rent it is rent.

If you pay a 100 a week mortgage then most of it is interest.

technu36

For the moment I'd rent and save for a mortgage, if you can afford that, then when you meet someone you want to settle down with, yeh thats the right time.

hondasam

Nothing wrong with renting depending on long term plans. I think attitudes to renting is changing.
I own my own house but I also rent for work reasons. I have the best of both worlds really half the week at home and the rest away.

Scioch

daltonmd wrote: »

But you are paying for that asset. Take this example. If I took out a mortgage tommorow for 180k and the interest was 6% over the entire term. (Rough figures)

The monthly repayment is about 1100 euro and guess how much the interest is? For the first year it is 900pm and by year 5 it decreases to 830pm, so you never repay 300pm off the capital in the first 5 years.
By the end of the term I will have paid over 200k in interest payments alone.

If you pay 100 a week in rent it is rent.

If you pay a 100 a week mortgage then most of it is interest.

I dont follow, how can you pay back 200k interest on 180k mortgage ? You saying your paying 6% each year on the outstanding balance and in effect paying over 100% interest on the entire loan over the term ?

Or do you mean you are paying 200k back on a 180k mortgage ? I'm not very good with interest and loans and what have ya. I dont even understand car insurance.

But I'm assuming that even though you are paying for that asset, what you have paid - the value of the asset = less than the sum of renting for the same amount of time if repayments were the same. Your telling me I have that arseways or just that its not as simple as pay mortgage and then get it back ?

Duggys Housemate

Financially it makes sense to buy at the moment.

Duggys Housemate

Varied wrote: »

I would love to have a couple of grand to invest in apartments in Dublin city. I'd still rent my own gaffe though.

I see apartments in Dublin for sale at 60k, rent for similar = 700. The finance could be 200 a month for a 30 yr mortgage.

daltonmd

LordSmeg wrote: »

I dont follow, how can you pay back 200k interest on 180k mortgage ? You saying your paying 6% each year on the outstanding balance and in effect paying over 100% interest on the entire loan over the term ?

Exactly. It depends on the interest rate, which does not remain the same. Google "mortgage amortisation calculator" (Sorry my PC is acting up I can't copy the link). Just fill in the fields, 180k at 6% over 30 years and calculate then click show amortisation calculator. This shows you how you are paying down your capital and the interest.

LordSmeg wrote: »

Or do you mean you are paying 200k back on a 180k mortgage ? I'm not very good with interest and loans and what have ya. I dont even understand car insurance.

No you are paying back 200k interest on a 180k loan (depending on the interest rate which changes when your fixed rate is up, normally every 1/2 or 5 years)

LordSmeg wrote: »

But I'm assuming that even though you are paying for that asset, what you have paid - the value of the asset = less than the sum of renting for the same amount of time if repayments were the same. Your telling me I have that arseways or just that its not as simple as pay mortgage and then get it back ?

Your mortgage is the capital required to buy the house and then the interest to the bank for the loan. You pay money off the capital and the interest each month.

You only get back what you paid if you sell the asset for that price - 180k plus the interest of approx 200k over 30 years.

Duggys Housemate

That 6% sounds high.

daltonmd

Duggys Housemate wrote: »

That 6% sounds high.

Average over the entire term. If you try for a 5 year fixed at the moment it will cost you 5.35. In a healthy market rates of 6% are normal/ The days of 1/2/3% are gone.

I agree that there are some instances where buying a one or two bed apartment might be wise, but for many buying a family home is their target and many of these are still overpriced imp.

Fuinseog

WumBuster wrote: »

Im coming to the conclusion that the smartest thing to do is just to keep renting rather than buying my own property.Ive no real interest in owning one or buying or the hassle and rigmarole that goes with it. I like to just be able to up and move with a drop of a hat(or a month's notice). We are a nation that places high value on owning their own property and i just fear down the line I will have difficulties in getting a partner to settle down with if I only want to rent. So there is pressure in that regard. This ''John and Mary down the road are only renting'' mentality. Do you think it's a big deal? Countries in Europe such a holland and Germany people mainly rent because they have enough common sense to see that life is too short to get yourself in over your head in debt that you may never be able to pay back. That is all.

I lived abroad and remember folks here about five years saying how the house prices will not fall and I should buy. the only thing with renting is thats its a pain moving. but why enslave yourself to some massive mortgage?
BTW how does it work renting if you have pets?

Fuinseog

Duggys Housemate wrote: »

I see apartments in Dublin for sale at 60k, rent for similar = 700. The finance could be 200 a month for a 30 yr mortgage.

what kind of apartments though, ground floor? area? enough room to swing a cat? Irish apartments also have little or know storage space. what if you buy and want to go abroad for a while?

daltonmd

Fuinseog wrote: »

I lived abroad and remember folks here about five years saying how the house prices will not fall and I should buy. the only thing with renting is thats its a pain moving. but why enslave yourself to some massive mortgage?
BTW how does it work renting if you have pets?

I have pets and when I first started renting it was a pain, since then I have had absolutely no problems whatsoever. I should add that I have always insisted on unfurnished properties and always pay a "pet deposit" in case there is any damge done.

alastair

Fuinseog wrote: »

but why enslave yourself to some massive mortgage?

Not saying there's more merit to buying over renting, but you're no more 'enslaving' yourself to mortgage repayments, than you are rental payments. And the payoff with a mortgage is that the day arrives when you've cleared your mortgage, you don't have the same degree of monthly outgoings, and you've an asset that you can sell - as opposed to no asset, and years more of rental overhead. That's why people opt to 'enslave' themselves to a mortgage.

My mortgage outgoings (couple living in central Dublin) are less than the equivalent rental costs for the location, and it'll be cleared in six years (iirc). Don't feel particularly enslaved by the arrangement.

Duggys Housemate

Fuinseog wrote: »

Duggys Housemate wrote: »

I see apartments in Dublin for sale at 60k, rent for similar = 700. The finance could be 200 a month for a 30 yr mortgage.

what kind of apartments though, ground floor? area? enough room to swing a cat? Irish apartments also have little or know storage space. what if you buy and want to go abroad for a while?

Just a cursory glance at daft yesterday. I am returning to Ireland and rent - given the economic situation - is extortionate. Same as I am paying in Bristol. Same flats can be bought for a mortgage at less than half the price. The problem is presumably the lack of mortgage availability.

Snowie

Id love to see something like these in every city in the country there small affordable and easy to live in I know there no massive but who the fvck cares Surely you could sell them for a reasonable price. When i think back to some of the apartments I've lived in and how crap they were in terms of build quality surely something like these could be possible http://www.abito.co.uk/explore/

JohnMarston

Yeah i rent at the moment. I could see myself renting 10 years from now. Its not like i can take a piece of land or a house with me when i die, is it?

Even if priorities change and i find myself a family man, chances are i'll just rent a house with enough space.

golden lane

when paying a mortgage back over a long period......inflation must be taken into account.....

Ulysses Gaze

Duggys Housemate wrote: »

Just a cursory glance at daft yesterday. I am returning to Ireland and rent - given the economic situation - is extortionate. Same as I am paying in Bristol. Same flats can be bought for a mortgage at less than half the price. The problem is presumably the lack of mortgage availability.

The floor has been also set through a) level of rent allowance given to SW recipients and b) rent relief for landlords.

The floor is around €800-€900 - take these two types of payment away (or reduce them significantly) and rents would drop further.

Government is STILL trying to prop up the property market.

daltonmd

daltonmd wrote: »

If you pay 100 a week in rent it is rent.

If you pay a 100 a week mortgage then most of it is interest.

But after "x" number of years the buyer pays off the mortgage and pays nothing per week while the renter continues to pay rent.

With monthly rents higher than the equivalent monthly mortgage repayment in a lot of cases buying is a no brainer for someone who plans on living in the same area long term imo. Especially if they have a decent sized deposit which will further reduce there monthly outgoing compared compared to renting and even if the figures for renting and repayments are around the same my first comment above is still a major major advantage of buying.

Its also your own house if you buy, which for some people is a very important thing.

Ms.M

Times have changed. My folks are working class, only my Da worked for not a lot of money, they had seven kids, a car, a massive house. Whereas hubby and I have far better-paid jobs and we've had the "house or babies" talk. We've chosen babies for the time being (not seven of them though!!!). I think there is a generational gap and that's where some of the pressure to buy comes from; I'm often getting asked "why aren't you buying", "what's the point in throwing your money in a hole", "is the housing-market not ideal" etc. A lot of parents in their 60s and 70s have raised children they deem to be more "successful" than they were. I think it is quite alarming for them to see their kids get recession-whipped.
I do think we'll buy a house eventually, but it's not the most important thing in the world. Once you have a sprog or two, Mas will be contented anyway.

Duggys Housemate

Most of this debate is the same as the boom period. Dead money vs Interest repayments etc. The answer is re:rent , it all depends on the prices of houses.

I think it's simple. If mortgages are cheaper than rent by a lot you should buy, if possible. Later you can rent out that property.

During the boom in Ireland - when I left - the calculus went the other way, I had to rent to live well.

AnonoBoy

I think we should all buy several houses. Live in one, rent the others and then flip them in a few years when prices start to rise.

If we all do that, we'll all be rich!

Micky Dolenz

Rent. No worries on home maintenance. If you own a house you have to maintain it, often people forget about this hidden cost.

Duggys Housemate

AnonoBoy wrote: »

I think we should all buy several houses. Live in one, rent the others and then flip them in a few years when prices start to rise.

If we all do that, we'll all be rich!

Well not everybody, but some.

The calculations are simple. Rent to Price is the same as a p/e ratio for stocks. If its high then the "stock" - the housing is undervalued.

The reason why prices are not rising is the lack of availability of finance, and if that corrects they will catch up. Not that it matters if people are in it for the rental income.

AnonoBoy

Duggys Housemate wrote: »

Well not everybody, but some.

No. EVERYBODY!!!

GET ON THE LADDER PEOPLE!!!!!

Duggys Housemate

AnonoBoy wrote: »

No. EVERYBODY!!!

GET ON THE LADDER PEOPLE!!!!!

Hmm, you are the kinda of guy who sticks to an ideology past it's date. That kind of sarcasm as justified in the boom, when houses were overpriced. Its dumb as fkuc now. The time to get on the ladder, as Warren Buffet didnt say but could have, is when most people think getting on the ladder is not wise, or not possible.

In short, nobody is using the "ladder" phrase in 2012, which means it might be time to get on the ladder.

AnonoBoy

Duggys Housemate wrote: »

Hmm, you are the kinda of guy who sticks to an ideology past it's date. That kind of sarcasm as justified in the boom, when houses were overpriced. Its dumb as fkuc now. The time to get on the ladder, as Warren Buffet didnt say but could have, is when most people think getting on the ladder is not wise, or not possible.

In short, nobody is using the "ladder" phrase in 2012, which means it might be time to get on the ladder.

Oh relax chief. I'm taking the p*ss.

However buying multiple houses when you're just on a modest income and can't really afford it is still a stupid idea.

Duggys Housemate

AnonoBoy wrote: »

Oh relax chief. I'm taking the p*ss.

However buying multiple houses when you're just on a modest income and can't really afford it is still a stupid idea.

fair enough. I am just a bit shocked at Dublin's rental costs at the moment, looking at daft.

daltonmd

Duggys Housemate wrote: »

Most of this debate is the same as the boom period. Dead money vs Interest repayments etc. The answer is re:rent , it all depends on the prices of houses.

Yes, and the same arguments were presented - better to buy. Ask those, the many thousands who took that advice, how they are fixed today?

Duggys Housemate wrote: »

I think it's simple. If mortgages are cheaper than rent by a lot you should buy, if possible. Later you can rent out that property.

During the boom in Ireland - when I left - the calculus went the other way, I had to rent to live well.

I wouldn't say it's that simple. It's simple if you decide to rent for the foreseeable - if you buy then you cannot unbuy. Not in this market.

Buying with a view to simply renting it out? Sure you may as well simply rent.

While some monthly payments are "cheaper" than monthly rents - this does not equate to "it's cheaper to buy" - that is a completely different argument.

Banks not lending is one reason, inpending taxes, reduced disposable income uncertainty for the future - are others.


In 5 years time you could be looking at interest rates in excess of 6%. This can only mean that borrowing money will be less affordable - which can only mean falling house prices.

Using the 180k borrowed at todays BOI variable rate is about 800pm. If you decide to fix later on for 5 years and refix at the end of that term then you could possible be looking at about 7% or more.

On the balance of the 180k over the next 5 years at 7% increases your repayments to about 1100 euro. What will your asset be worth? Who knows? Will you still have your same job? Same income? Will you want/need to trade up?

Duggys Housemate

daltonmd wrote: »

Yes, and the same arguments were presented - better to buy. Ask those, the many thousands who took that advice, how they are fixed today?

They were wrong. Hint: I didnt take that advice because the cost of housing was too expensive then. It has fallen. And I may buy in a year or two, not now.

I wouldn't say it's that simple.

It is really

It's simple if you decide to rent for the foreseeable - if you buy then you cannot unbuy. Not in this market.

Buying with a view to simply renting it out? Sure you may as well simply rent.

No, in the first case you make money, in the second you lose money.

While some monthly payments are "cheaper" than monthly rents - this does not equate to "it's cheaper to buy" - that is a completely different argument.

Yeah, it does.

Banks not lending is one reason, inpending taxes, reduced disposable income uncertainty for the future - are others.

Obviously buying would be for people who can buy - i.e. you probably need capital to invest in the first place. This in fact is what is keeping rental income high. Rich what get the pleasure, poor what get the pain etc.

In 5 years time you could be looking at interest rates in excess of 6%. This can only mean that borrowing money will be less affordable - which can only mean falling house prices.

The interest rates of 6% will only happen if there is a dramatic recovery in the European economy and house prices will reflect that prior to the interest rates increasing.

Using the 180k borrowed at todays BOI variable rate is about 800pm. If you decide to fix later on for 5 years and refix at the end of that term then you could possible be looking at about 7% or more.

On the balance of the 180k over the next 5 years at 7% increases your repayments to about 1100 euro. What will your asset be worth? Who knows? Will you still have your same job? Same income? Will you want/need to trade up?

The 7% is an assumption you make, without much grounding in reality. As i said that would indicate that Europe is booming. The ECB has never been at the 7% level in the lifetime of the Euro. Its true that historically increases in interest rates reduce the cost of housing, but that tends to happen because the interest rates are increased to stop asset inflation - something we lost control of in the ECB. If the Irish economy is completely decoupled from the European economy you may have a point, otherwise anybody who buys now will be in positive equity when the interest rates hit 7%