Huge negative equity on apartments.

MadsL

gatecrash wrote: »

In a way, yes.

Apache explained his/her personal circumstances before you broke down the figures on their purchase. They explained that a landlord would probably not have accepted a reduced set of payments. And no one would expect one to. They also explained that the bank were at least lending a sympathetic ear to the situation.

you didn't seem to take that on board when breaking down the figures and facts.

Because apache was utterly unwilling to give any mathematical basis for his assertion that renting was dead money, just how he 'felt' about it and how the only alternative to a mortgage was to have to pay rent all your life. Forgive me if I show on a discussion forum how this is not the case.

I feel for his personal circumstances, especially his illness, but that doesn't change the fact that he is paying massively over the odds for his house. I can dress that up in a pretty box if you like. But if you don't want your feelings hurt, don't post personal info on a discussion board. I don't bear him any ill feelings, just that he doesn't seem willing to understand basic economics.

cyrusdvirus

MadsL wrote: »

Because apache was utterly unwilling to give any mathematical basis for his assertion that renting was dead money, just how he 'felt' about it and how the only alternative to a mortgage was to have to pay rent all your life. Forgive me if I show on a discussion forum how this is not the case.

I feel for his personal circumstances, especially his illness, but that doesn't change the fact that he is paying massively over the odds for his house. I can dress that up in a pretty box if you like. But if you don't want your feelings hurt, don't post personal info on a discussion board. I don't bear him any ill feelings, just that he doesn't seem willing to understand basic economics.

Yet, in his personal circumstances, renting COULD have been dead money, as he'd be out on his ear.

Personally, i waited to buy until time and circumstances felt right for me. Yes, my mortgage is a multiple of my salary, but it's 'only' 4 times.
Does that mean i was wise to wait, or just lucky that i was single during the majority of the boom years and never in a position to actually want to buy?
I have to say i was lucky! Cos otherwise i could well be in a much worse off situation than i am

MadsL

gatecrash wrote: »

Yet, in his personal circumstances, renting COULD have been dead money, as he'd be out on his ear.

Personally, i waited to buy until time and circumstances felt right for me. Yes, my mortgage is a multiple of my salary, but it's 'only' 4 times.
Does that mean i was wise to wait, or just lucky that i was single during the majority of the boom years and never in a position to actually want to buy?
I have to say i was lucky! Cos otherwise i could well be in a much worse off situation than i am

Yeah. You see maths doesn't do "COULD" well.

I could equally say that he "SHOULD" have put his €40 a month into a proper mortgage protection scheme/income protection scheme.

I doesn't really get us very far on the fact that renting is not dead money in a falling or over-inflated market.

I'd invite you to do the same calculations for your own circumstances just to provide a further example.

apache

gatecrash wrote: »

In a way, yes.

Apache explained his/her personal circumstances before you broke down the figures on their purchase. They explained that a landlord would probably not have accepted a reduced set of payments. And no one would expect one to. They also explained that the bank were at least lending a sympathetic ear to the situation.

you didn't seem to take that on board when breaking down the figures and facts.

Thanks gatecrash.

I'm female but thats neither here or there

Thats exactly how i feel about it. There is no definite rights or wrong here. In my situation i do feel blessed that in my recent bad circumstances that the bank have stepped up to the mark with me. The last thing you want to worry about as you are going in and out of hospital for painful operations is to worry about a roof over your head. I feel more secure in that way - i don't think a landlord would be as sympathetic.

I do love my place and would do it all over again.

The figures are being flawed anyway. I could never hope to rent my place in my situation or indeed probably any other place?

Everybody is different. At the end of the day i want security for what life throws at you and that is what i have got.

cyrusdvirus

i never said renting was dead money. I just didn't fancy renting anymore.
the opportunity to purchase a house, in an area i like and know, came up and i took it.
The same as you took the opportunity to buy back in January.

Did i pay a super inflated price? Nope.
Did i pay a reasonable price, based on what i could expect today if i HAD to sell? Yep.
Is my house worth more, now, than people in this town who paid more for theirs? Yep, probably.
Do i personally know people who paid more than i did, yet have smaller houses? Yep

I don't NEED to do any maths calculation. Because, overall, I am happier having purchased, than i would be if i continued renting.

apache

MadsL wrote: »

Yeah. You see maths doesn't do "COULD" well.

I could equally say that he "SHOULD" have put his €40 a month into a proper mortgage protection scheme/income protection scheme.

I doesn't really get us very far on the fact that renting is not dead money in a falling or over-inflated market.

I'd invite you to do the same calculations for your own circumstances just to provide a further example.

e20! e20 for life insurance and e20 for personal illness. I know it dosen't cover my situation but god forbid i get one of the list of 34 (can't remember exact no) illnesses' it will.

MadsL

apache wrote: »

Thanks gatecrash.

I'm female but thats neither here or there

Thats exactly how i feel about it. There is no definite rights or wrong here. In my situation i do feel blessed that in my recent bad circumstances that the bank have stepped up to the mark with me. The last thing you want to worry about as you are going in and out of hospital for painful operations is to worry about a roof over your head. I feel more secure in that way - i don't think a landlord would be as sympathetic.

I do love my place and would do it all over again.

I have every sympathy for your illness and I'm delighted your bank were understanding. Please do allow me however to comment that PRSI is paid for a reason and that unlike the US no one should have to fear homelessness as a result of illness.

The figures are being flawed anyway.

Would you care to explain how?

I could never hope to rent my place in my situation or indeed probably any other place?

I find that unlikely given you have paid PRSI over the years and would qualify for illness benefit and rent allowance.

Everybody is different. At the end of the day i want security for what life throws at you and that is what i have got.

Yes you have. But at quite a price. It is your money and your are more than entitled to do what you want with it. And I genuinely hope that your illness improves and you are able to return to work very soon.

But please don't mock renters who made (as it turns out) very sensible and practical decisions about not jumping on that property ladder. Trust me, they will not be paying rent for the rest of their lives.

MadsL

gatecrash wrote: »

i never said renting was dead money. I just didn't fancy renting anymore.

Grand. You accept that. Others on this thread have a hard time accepting that what they were told about renting was wrong all these years.

cyrusdvirus

MadsL wrote: »

Grand. You accept that. Others on this thread have a hard time accepting that what they were told about renting was wrong all these years.

Thats what i mean about coming across as mean spirited and petty.
i never said that renting was dead money, yet your comment i've quoted implies that i did say it and that you have convinced me that i was wrong!

renting suited me at a couple of stages throughout my life so far. now it doesn't.

Zulu

MadsL wrote: »

Could youi post the basis for your calculation that rent was dead money and that you are financially at this moment in time ahead of the renter.

What? I'm not "ahead" of anyone. If you're asking me, how rent was dead money for me, I've already explained that it was cheap for me to buy than to rent. After the period of the mortgage I'll have an asset. If I rented, I wouldn't.

For this calculation ignore the fact that you are renting out the property. Investment property is not what this thread is about.

What? How can I ignore that - that was crucial in my investment. Make up your mind, is property an investment or not?

Zulu

MadsL wrote: »

Others on this thread have a hard time accepting that what they were told about renting was wrong all these years.

Is that what this is all about? Some people resent renting being called "dead money" and are acting out?? Oh. My. Fucking. God. How petty?!?

Soorrryyy. Rent isn't "dead money". Fucking hell. I rented for years. It's a great system of paying for a service. If you want to rent all your life - kudos. You pay for a service, just like you do for internet, electricity, rubbish collection.

UCDVet

There are situations where renting is the smarter financial decision.
There are situations where buying is the smarter financial decision.

not yet

jackal wrote: »

The fúcking worm has well and truly turned. From the people who brought you:

• Enjoy living with your mammy!
• At least I'm not paying somebody else's mortgage
• Sure I was just trying to put a roof over my head
• Sure I have to live somewhere
• Sure the rent on the apartment in Bulgaria in guaranteed for 5 years.
• Rent is dead money.
• My properties are my pension.
• Sure I will sell it so some féckin eejit for twice the money in 5 years.
• At least I own my own place.
• Enjoy sitting on the sidelines, you won't be able to afford a shoebox next year!
• Better get a foot on the ladder!

We now have to hear accusations of smugness from those that used to laugh about how fúcking clever and brave they were for mindlessly following the crowd, borrowing as much as humanly possible and expecting to make a fortune and be in a mansion in dalkey 5 years hence...

Let me explain something to you pal, I never rubbed anyone's nose in it, I certainly wasn't a smug fcuker who lords it over people by saying the worm has turned. Most people I know bought a home to live in, If they made a mistake they don't need selfish cnuts rubbing their nose in it now.

Zulu

Monty Burnz wrote: »

No, I think you are a loser.

:rolleyes:

Of course you did.

Where? Apart from your imagination (where most of what you attribute to me seems to come from). Seriously, you've got some persecution issues.

Bullseye1

You pay taxes and PRSi your whole working life 40-50 years and when you retire your now a leech. Nice.

Monty Burnz wrote: »

People were not speculating to get rich - they were putting their savings in 'safe' bank shares so they would have something to retire on. Not everyone wants to leech off the state in their old age.

To be honest, I'd be happy if losers just stopped whining.

Halloran springs

Anyone got any statistics on the total repayment amount of an average mortgage (I dunno - €240k over 30 years?) would be at the moment

Halloran springs

UCDVet wrote: »

There are situations where renting is the smarter financial decision.
There are situations where buying is the smarter financial decision.

I like this new style of direct boards.ie posts where every angle of the argument is correctly summed up in 2 lines. Every thread needs one of these :pac:

queensinead

If you bought an expensive property 5 years ago and have since lost your job, and cannot continue your repayments, that is a catastrophe.

But if you are still working, then just keep making those payments like you always did. That's what you signed up for.

It's not pleasant knowing that your property is now worth only half of what you paid for it, but that only becomes a problem if you see your home as an "investment", a bet that you lost.

If you still have that job, and still have that mortgage, well, just keep paying like you agreed to do.

apache

I can only see renters putting down buyers here. And acting like tits to boot. I can't see buyers putting down renters.

Says a lot about yourselves!

apache

not yet wrote: »

Let me explain something to you pal, I never rubbed anyone's nose in it, I certainly wasn't a smug fcuker who lords it over people by saying the worm has turned. Most people I know bought a home to live in, If they made a mistake they don't need selfish cnuts rubbing their nose in it now.

Nor was i. Actually i don't really concern myself with worrying how other people are doing. Theres some alarming bitterness here it seems. Sad really

Monty Burnz

Halloran springs wrote: »

Anyone got any statistics on the total repayment amount of an average mortgage (I dunno - €240k over 30 years?) would be at the moment

With the cheapest mortgage I can find that isn't an introductory offer (4%), you will pay €172,488 in interest over 30 years, so a total repayment of 412k or so. But interest rates won't always be at the current all-time lows, and it actually costs the Irish banks money to lend at these rates.

At a more realistic and sustainable (but still quite conservative) 6%, you will be repaying 518k. At 8% interest and a 35 year mortgage, you will be paying 500k in interest alone.

In the old days we could rely on inflation helping to get rid of our debts (our parents 'benefited' from 10%+ inflation in the 70s) but the ECB has a target inflation rate of 2% or so, so that won't be happening if we stay in the euro.

Monty Burnz

apache wrote: »

Nor was i. Actually i don't really concern myself with worrying how other people are doing. Theres some alarming bitterness here it seems. Sad really

*cough*

apache wrote: »

Jesus zulu we have it all wrong! We could have had a house in a sunny climate with the imaginary money we would have saved renting.....them renters are brillo pads for being able to save so much money when their overheads are higher!

Begrudgers them renters or people who are begrudging leaving the country - no other reason.
Just smile and nod

books4sale

Couldn't help but notice on the news how interest rates are gone up again by .5% . Property owners in the 80's were paying around a whopping 15-18%

There have been many similarities between Ireland's property collapse and those of Japan and Finland. It took Japan 20 years to recover, Ireland are 4 years into a property collapse and there is only one direction property prices are headed this Winter.

MadsL

gatecrash wrote: »

Thats what i mean about coming across as mean spirited and petty.
i never said that renting was dead money, yet your comment i've quoted implies that i did say it and that you have convinced me that i was wrong!

renting suited me at a couple of stages throughout my life so far. now it doesn't.

I didn't intend that, perhaps my post should have said You accept that whilst others...
I never said you held that view, nor did I intend to imply otherwise.

Zulu wrote: »

What? I'm not "ahead" of anyone. If you're asking me, how rent was dead money for me, I've already explained that it was cheap for me to buy than to rent. After the period of the mortgage I'll have an asset. If I rented, I wouldn't.

You explained in words, we are yet to see any meaningful figures to back that up. Should we just take your word for it?

Zulu wrote: »

Is that what this is all about? Some people resent renting being called "dead money" and are acting out?? Oh. My. Fucking. God. How petty?!?

The myth of "dead money" is what got many people in the mess they are in now, forgive me if I'm critical of people who continue to spout this nonsense.

"Acting out" If explaining with real figures to people who refuse to understand the concept is acting out then God help us. Financial literacy should be on the Junior Cert.

apache wrote: »

I can only see renters putting down buyers here. And acting like tits to boot. I can't see buyers putting down renters.

Says a lot about yourselves!

Wow. No one has insulted you, yet you come out with this gem in response to someone trying to explain something to you that may actually help you or others understand your financial situation...

apache wrote: »

Jesus zulu we have it all wrong! We could have had a house in a sunny climate with the imaginary money we would have saved renting.....them renters are brillo pads for being able to save so much money when their overheads are higher!

Begrudgers them renters or people who are begrudging leaving the country - no other reason.
Just smile and nod

apache wrote: »

Nor was i. Actually i don't really concern myself with worrying how other people are doing. Theres some alarming bitterness here it seems. Sad really

Why would there be any bitterness towards people who are still as financially illiterate as they were in 2007 when those who could add 2+2 and do compound interest are forced to emigrate as the economy slides down the toilet?

MadsL

Halloran springs wrote: »

Anyone got any statistics on the total repayment amount of an average mortgage (I dunno - €240k over 30 years?) would be at the moment

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

It even prints an amortisation table. Some posters here will be seeing one for the first time. Maybe we can have a penny drop that renting at €1200 is not necessarily more expensive than taking on a mortgage for €1100. For some it may as hard as accepting that the sky isn't blue.

Monty Burnz

MadsL wrote: »

The myth of "dead money" is what got many people in the mess they are in now, forgive me if I'm critical of people who continue to spout this nonsense.

"Acting out" If explaining with real figures to people who refuse to understand the concept is acting out then God help us. Financial literacy should be on the Junior Cert.

He hasn't provided any numbers yet and I don't expect him to in the future. I can't think why. Then he dishes out insults and gets all butt hurt when he gets replies in kind.

MysticalRain

UCDVet wrote: »

There are situations where renting is the smarter financial decision.
There are situations where buying is the smarter financial decision.

The key is to know when to do both. The people who thought "rent is dead money" only ended up with another pile of dead money in the form of NE for not choosing to rent at the peak of the market cycle when it was the optimum time to do so. Meanwhile the people who rented during the boom years will now pick up the same houses for a fraction of what the rent-is-dead money crowd paid for them. I don't mean to sound harsh, but people in this country really need to pay more attention to basic economics.

not yet

Monty Burnz wrote: »

He hasn't provided any numbers yet and I don't expect him to in the future. I can't think why. Then he dishes out insults and gets all butt hurt when he gets replies in kind.

I'd love to know how many people have had infractions are bans whilst ''debating'' with you. I normally have a short fuse but behaved myself on this thread, although I don't know how listening to some of the smarmy comments and put downs from you. I hope the sun always shines on you and you are never drawn into a mountain of crap by agencies that you thought were there in your interest.

MadsL

not yet wrote: »

I'd love to know how many people have had infractions are bans whilst ''debating'' with you. I normally have a short fuse but behaved myself on this thread, although I don't know how listening to some of the smarmy comments and put downs from you. I hope the sun always shines on you and you are never drawn into a mountain of crap by agencies that you thought were there in your interest.

*cough* shure, what ever you say....

not yet wrote: »

Let me explain something to you pal, I never rubbed anyone's nose in it, I certainly wasn't a smug fcuker who lords it over people by saying the worm has turned. Most people I know bought a home to live in, If they made a mistake they don't need selfish cnuts rubbing their nose in it now.

not yet wrote: »

Once again bolocks,
Some of the best educated people in the state bought property during this period.

not yet wrote: »

How the fcuk someone can connect our education system to Buying a home during a boom is beyond my comprehension. Sweet mother of jesus I've seen it all now.

not yet wrote: »

Well ain't smugness alive and well.

not yet wrote: »

The doom merchants were few and far between up untill 9 months or so before the crash. up to that point every single agency in the state pushed people into buying property.

not yet wrote: »

I have continued to pay my mortgage to this point, But I do believe as do most paople that something needs to be done to help people move on from crippling debt. Now if you think having a generation crippled by debt is good for the country then I'll leave you and all the other Thatcherites to it.

viva la revolution

not yet wrote: »

Yep..you read it here folks, let anyone who bought a home between 2002 and 2007 go fook themselves, I'm not bailing anyone out brigade.

Very balanced and moderate of you.

How you haven't been infracted suprises me.

Halloran springs

MadsL wrote: »

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

It even prints an amortisation table. Some posters here will be seeing one for the first time. Maybe we can have a penny drop that renting at €1200 is not necessarily more expensive than taking on a mortgage for €1100. For some it may as hard as accepting that the sky isn't blue.

That amortisation table really smacks you in the face at how serious a commitment a mortgage is, and how much of your life it can span. And it doesn't even take property tax into consideration.

I'm renting at the moment and was considering purchasing in a year or 2 but (and I know this post has an air of smugness, I'm not trying to come across like that intentionally) you really have to put a lot of time and effort researching what is more than likely the biggest financial transaction of your life.

MadsL

http://bretwhissel.net/cgi-bin/amortize

Shows the totals here;

So taking some shocking examples

http://www.thepropertypin.com/viewtopic.php?f=23&t=18795

2009 - €950k
2010 - €500k

If you had bought this in 2009 on a 35 year mortgage you would have paid;
Summary

Principal borrowed: $950,000.00
Regular Payment amount: $5,416.80
Interest-only payment: $4,750.00
*Total Repaid: $2,275,056.00
*Total Interest Paid: $1,325,056.00

A year later you save over a million quid on the transaction.

Principal borrowed: $500,000.00
Regular Payment amount: $2,850.95
Interest-only payment: $2,500.00
*Total Repaid: $1,197,399.00
*Total Interest Paid: $697,399.00

cournioni

not yet wrote: »

So can I take it you believe that someone who bought a home in 2003-2007 was greedy, because thats what I'm taking from your post.

I, and others bought apartments during this period, not to make money,not to invest, not to be greedy but simply to have a home. The Banks and estate agents at the time fooled people into thinking if you don't buy now you will not be able to afford it in 5 years, oh and the government at the time were part of this cable of nasty greed induced basdtars.

Ha! You're quite the joker. I never said that everyone that bought a house between 2003-2007 was greedy. I think anybody reading my post with a decent set of eyes can see that. I do think that people that bought back then were quite naive, unless they could actually afford what they were buying without takin out a ridiculous loan.

People were fooled into buying for sure, but they let peer pressure get the better of them and they now have to deal with the consequences and I do not envy them. I feel sorry for the people that genuinely bought with the view to living in their house as a life long home, however, there is a number of people out there with huge mortgages playing the victim, refusing to take any responsibility for their own actions and blaming others for their mistakes... I have no sympathy for these people.

Monty Burnz

not yet wrote: »

I hope the sun always shines on you and you are never drawn into a mountain of crap by agencies that you thought were there in your interest.

Leaving aside the angry stuff, the wider point here is that people need to be educated to question their sources of information (who/what information can you trust?) and once you have the right information, have the interest and curiosity to figure out what is the best course of action. You don't need to be a genius to do either of these things - common sense is all you need.

For some people at some times the decision to rent will be the right one, for the same people at a different time it might be best to buy. And vice versa. At certain times (like during the bubble) the balance will swing strongly away from buying towards renting (but not necessarily for everyone).

The key point I've been trying to make is that lazy-minded clichés like 'rent is dead money' do not stand up to any sort of serious analysis, and not questioning this sort of second-hand thinking (or 'thought terminating clichés') landed a lot of people in a lot of trouble in the last few years.

MadsL

Monty Burnz wrote: »

The key point I've been trying to make is that lazy-minded clichés like 'rent is dead money' do not stand up to any sort of serious analysis, and not questioning this sort of second-hand thinking (or 'thought terminating clichés' landed a lot of people in a lot of trouble in the last few years.

Well said. Astonishing the amount of abuse you have to take when pointing out basic truths to some people.

apache

MadsL wrote: »

Monty Burnz wrote: »

The key point I've been trying to make is that lazy-minded clichés like 'rent is dead money' do not stand up to any sort of serious analysis, and not questioning this sort of second-hand thinking (or 'thought terminating clichés' landed a lot of people in a lot of trouble in the last few years.

Well said. Astonishing the amount of abuse you have to take when pointing out basic truths to some people.

It obviously works for some people as i have already explained. Those who didn't spend beyond their means. I was offered twice the amount i borrowed. You do need to have a bit of sense.

Can't really comment on monty as wasn't directly quoted but you mads are a nightmare. You are so condescending with your "trying to help" and saying i am thick at not doing maths!

Plenty of people are happy with their choices. I know i am. You guys are like a little tag team and you're at it in the other thread. Are yous not bored yet?

Monty Burnz

apache wrote: »

Plenty of people are happy with their choices. I know i am. You guys are like a little tag team and you're at it in the other thread. Are yous not bored yet?

Apache, do you disagree with anything that I have said in this post? And if you do, can you please explain what you disagree with?

apache

Monty Burnz wrote: »

apache wrote: »

Plenty of people are happy with their choices. I know i am. You guys are like a little tag team and you're at it in the other thread. Are yous not bored yet?

Apache, do you disagree with anything that I have said in this post? And if you do, can you please explain what you disagree with?

I have to say i don't disagree with anything you are saying there. I have a little bit of a problem with it not being dead money but on the whole i can see where you are coming from.

MadsL

apache wrote: »

It obviously works for some people as i have already explained. Those who didn't spend beyond their means. I was offered twice the amount i borrowed. You do need to have a bit of sense.

Can't really comment on monty as wasn't directly quoted but you mads are a nightmare. You are so condescending with your "trying to help" and saying i am thick at not doing maths!

Plenty of people are happy with their choices. I know i am. You guys are like a little tag team and you're at it in the other thread. Are yous not bored yet?

Actually I'm sick in bed today having put my back out. I'm sure you will understand, I'll try not to take offence at your judgemental tone about how I spend my time.

The problem is Apache is that by trotting out how you "feel about" your apartment doesn't really help us to have a discussion about the nonsense you were saying about how your apartment was "cheaper than renting" and about how "we are not the fools."

Feel free to bury your head in the sand, but talking of condescending. please don't expect me to swallow the line that your mortgage is "cheaper than renting" because you are "happy". Feel free to take issue with the figures I quoted for you earlier. You are welcome to discuss real figures rather than diversionary feelings.

I'm not trying to pick a fight with you and I have been nothing but polite to you, but please don't try to make out that telling someone a so far unchallenged truth is "condescending". Insults won't change the figures I quoted to you.

MadsL

apache wrote: »

I have to say i don't disagree with anything you are saying there. I have a little bit of a problem with it not being dead money but on the whole i can see where you are coming from.

What part of this so-called dead money are you having a problem with?

apache

Hope your back gets better soon. Goodnight sir.

Zulu

MadsL wrote: »

You explained in words, we are yet to see any meaningful figures to back that up. Should we just take your word for it?

Why not? Sure couldn't I make up numbers as well? Are you going to believe my numbers or are you going to continue to seek further exceptions?

I bought in 2007.
My mortgage rate is E.C.B +1%.
My mortgage repayments are €1050 per month.
My property has a rental income of €1150 per month. (reduction from €1250 for long standing tenants).
Now I need to pay management fees of €800 per annum, and tax (which is minimal as it's offset against expenses).

Previously I rented. I paid €700 per month for a room sharing a house with 5 others.
I then moved to a one bedroom that I rented for €1300 per month.
I then moved to a two bed that I rented for €1400 per month.
Then I bought and paid mortgage...
€1400-1050=250. Less management fees (800/12=~70) leaves €130.
So I save €130 per month by deciding to buy.

After the term of the mortgage, I'll also have an "asset" which has the potential to yield me roughly (crystal ball conditions apply) the equivalent of €1000 a month gross.

If I stayed renting, I'd be paying €1400 per month but I wouldn't have an asset after a period of time.


...now there's my maths. I'm confident you'll find a reason to ignore/exclude what doesn't suit your argument, but above is the reality I live in.

Zulu

I instantly regret posting that, as it'll only infuriate some people further. Some people clearly have "issues" about rent vs property owning. Some people appear to have been/perceive themselves to have been belittled during the boom, and are delighting in the fact that other are suffering now. I fear my post will be interpreted by these people as "boasting" or whatever it was that got their backs up in the boom. It's not. It's an answer to a call for my "maths".

You see it's not my interest to raise myself over anyone else - I really don't care. I do care however about others kicking unfortunate people when they are down; I do care about people mocking are sneering others misfortune. I'm not about to stand back and watch that happen. It's really shitty behaviour. And it's what's ruining boards.

Monty Burnz

Zulu wrote: »

...now there's my maths. I'm confident you'll find a reason to ignore/exclude what doesn't suit your argument, but above is the reality I live in.

Thanks for providing the numbers. Without wanting to nit-pick too much I note that you have left no money aside for maintenance and voids - you would be wise to allow for a month a year in voids, and perhaps 10% of what you take in each year for wear and tear.

On a side note, tracker mortgages are no longer available for new buyers, so people buying now will pay a hell of a lot more interest.

Zulu wrote: »

I instantly regret posting that

There is a delete button.

johnwest288

A landlord I know who has 4 apartments on "Tracker Interest Only Mortgages" He says he is currently making a killing and happy as a pig in doo doo with his celtic tiger portfolio. Now these were bought between 05-07.He has them rented to the state to single mothers. He takes in supposedly 50% more on what his mortgages are on each property so he is making a tidy sum. Now the one problem with this I see is what happens when interest rates go up I cant see ECB maintaining these rates for years,

Zulu

Monty Burnz wrote: »

Thanks for providing the numbers. Without wanting to nit-pick too much I note that you have left no money aside for maintenance and voids - you would be wise to allow for a month a year in voids, and perhaps 10% of what you take in each year for wear and tear.

This is true, I also didn't calculate how much it's cost to furnish the property.

A month a year for voids is probably very wise, but it's very conservative. I have a reserve of 3 months. I've never had to wait more than a fortnight to rent the property as I bought in Dublin city centre. I bought a property I knew I wouldn't have difficulty renting. I'm happy with a 3 month buffer.

I'm aware that I'm not making a "profit" on the property now, but it's costing me relatively little to purchase. In a few years, as more principle is cleared, profit will grow. And when the mortgage is complete, I'll have an additional income.

Had I stayed renting I'd have been paying for a service. But, (and here's the important part for me), after the term of the mortgage, I'd have NO asset. I'd have no additional income.

I'm currently paying for a service (interest on a loan), but I will have an asset; I will have an additional income.

On a side note, tracker mortgages are no longer available for new buyers, so people buying now will pay a hell of a lot more interest.

Exactly. So the point stands, not everyone who purchased at the height of the boom was a "property looser" or ignorant fool. Not everyone deserves ridicule. In fact, no one deserves ridicule - even those who made poor choices during the height of the boom.

There is a delete button.

There is, but if I used it, some people would find it easier to retain their ignorance, and the sneering, and the snobbery would continue.

Zulu

johnwest288 wrote: »

Now the one problem with this I see is what happens when interest rates go up I can't see ECB maintaining these rates for years,

No they won't, but it'll be another 5 years before they make significant changes (I hope). It would appear they'll make 0.5% changes here & there. It would appear unlikely they'd raise the rate too much in the mid future.
(crystal ball applies)

By then, if he's smart, he'll be either overpaying to reduce the principal, or reinvesting the profit to ensure he can cope.

The ECB will keep those rates low until real growth returns (maybe never) or until hyperinflation takes off due to oversupply of "printed" money, resulting from all the bail out funds leaking into the "real economy"

Monty Burnz

Zulu wrote: »

There is, but if I used it, some people would find it easier to retain their ignorance, and the sneering, and the snobbery would continue.

Without wanting to trudge over old ground again, the thought-terminating cliché that 'rent is dead money' is the ignorance that has caused the most appalling damage to this country in the last decade. As for sneering and snobbery, I'm sure you are well aware that this has historically been visited upon renters like yourself. There is no place for it, but discussing optimal economic decisions should not come under the heading of sneering and snobbery.

Blured

Zulu wrote: »

Why not? Sure couldn't I make up numbers as well? Are you going to believe my numbers or are you going to continue to seek further exceptions?

I bought in 2007.
My mortgage rate is E.C.B +1%.
My mortgage repayments are €1050 per month.
My property has a rental income of €1150 per month. (reduction from €1250 for long standing tenants).
Now I need to pay management fees of €800 per annum, and tax (which is minimal as it's offset against expenses).

Previously I rented. I paid €700 per month for a room sharing a house with 5 others.
I then moved to a one bedroom that I rented for €1300 per month.
I then moved to a two bed that I rented for €1400 per month.
Then I bought and paid mortgage...
€1400-1050=250. Less management fees (800/12=~70) leaves €130.
So I save €130 per month by deciding to buy.

After the term of the mortgage, I'll also have an "asset" which has the potential to yield me roughly (crystal ball conditions apply) the equivalent of €1000 a month gross.

If I stayed renting, I'd be paying €1400 per month but I wouldn't have an asset after a period of time.


...now there's my maths. I'm confident you'll find a reason to ignore/exclude what doesn't suit your argument, but above is the reality I live in.

Just wondering on some of the above. You said that the tax implications are "minimal" on your rental income - thats the part I am having trouble with. You are earing 13.8k a year in rental income. Your mortgage interest is conservatively 5k a year (seeing as you are on a tracker). Allowing for other expenses of 1k and your management fee of 800, you still have rental profit of approx 7k

What other expenses have you offsetting the tax income? Because either you have a decent tax bill every year, or you have significant property related expenses.

ush

Its a market. Someone gets f*cked in the end.