Buy a one bed house aged 24? Madness or genius?

not even wrong

Walt Jr wrote: »

My reasoning is better paying for something I own rather than rent,

You're an accountant and you haven't realised that mortgage interest is rent you pay on money?

gosuckonalemon

There is no way anybody on 22K will get a mortgage.

20K isn't enough of savings.

To get a 200K mortgage realistically you would need around 40K savings and be earning around 60K plus with about 6-8 years of decent credit history behind you.

You're only a kid about to join the real world. Rent a place and enjoy your youth.

NIMAN

The OP has enough advice now, if they still try to buy a 1 bed apt after this then they must be mad, end of.

StillWaters

First place I bought was a one bedroom, at age 24. Wouldn't say I'm mad or a genius, but it worked out. Meant I'm mortgage free early.

Cuddlesworth

Walt Jr wrote: »

With a Big 4, trainee accountancy, expecting to stay with the firm after 3 years

Hi OP, if your starting in audit or advisory your going to have no extra income over the next three years. You will most likely need to get a loan or two to tide you over.

Your going to be expected to look and wear the best at all times(regardless of your wages). New suits, shoes and shirts. A good haircut is a must. There is going to be loads of socializing, so constant drinking in Dublin and the associated costs.

And if you want to be kept on after your contract, you have to do all of the above plus the 60 hour weeks. Its a hard life.

House share for three years instead and see where it takes you.

Marcusm wrote: »

Personally, in your position I'd probably hold off. The number of trainees kept on in a recession will be quite low; if you're highly successful, your income may increase very significantly but an existing mortgage might tie you to a property you want to move on from. Equally, you may want to travel or move abroad to exploit your qualification - that happened a lot in mid 90s before the economy took off for newly qualifieds. It's also harder to manage lettings from overseas.

It was about 25% last year. I'm out of the loop now. They are also pretty harsh now with exam failures, there was a amazing amount of mid year drop-outs.

ABajaninCork

NIMAN wrote: »

The household charge is being replaced by the property tax, so it definitely won't be staying at €100, thats one thing you can put money on.

Oh yes indeedy! I guarantee than within 5 years the property tax will reach UK levels. i.e. 1k+ per year.

NIMAN

ABajaninCork wrote: »

Oh yes indeedy! I guarantee than within 5 years the property tax will reach UK levels. i.e. 1k+ per year.

Its already that in NI, and my widowed pensioner mum has to pay that.

I wonder why she doesn't moan about it though?

The Big Red Button

Walt Jr wrote: »

With a Big 4, trainee accountancy, expecting to stay with the firm after 3 years

Is it audit/advisory? Most trainees get offered a contract if they last the 3/3.5 years; very very few accept it. And, if they do, it tends to be only until something better comes along. Bear this in mind!

Many Big 4 audit trainees (like myself!) choose to leave the firm mid-contract. For me, it made perfect sense for my career, and I have no regrets about my decision. If I had a mortgage to cover, it would have really limited my career options (as regards flexibility, location, etc.) I couldn't really have run the risk of pursuing new job opportunities - no matter how much I wanted to.

How on earth could you decide that the Big 4 career path is the one for you, before you've even started working there? It's a big world out there, don't limit yourself when you're still so young!

ABajaninCork

NIMAN wrote: »

Its already that in NI, and my widowed pensioner mum has to pay that.

I wonder why she doesn't moan about it though?

So does my mother. But - you get more bang for your buck at home, so's to speak. The bins are taken, police and Fire Brigade are paid for, and you get reasonable LA services.

The reason why people are so angry about the charge, is that you WON'T get any services included in that. You'll still have to pay for the bins, roads will still be neglected, LA services will be run down and the money will be used to pay off the debts the bankers and politicians have run up whilst their noses were in the trough.

Terry Ryaner

Walt Jr wrote: »

Hi there long time lurker

So Im soon turning 24 and starting a graduate job on a 3 year contract in Dublin City; I have saved pretty much every penny Ive ever earned since I started working at the age of 14, and my savings will amount to 20 thousand euro soon. I am just curious is it madness to even think about a one bed flat in the city as I could never get a mortgage? or what are peoples thoughts about this? My reasoning is better paying for something I own rather than rent, I look forward to your input, many thanks

Walt Snr in 40 years time will be screaming at you saying why did you waste your youth saving every single penny of yours. Live a little.

NIMAN

ABajaninCork wrote: »

So does my mother. But - you get more bang for your buck at home, so's to speak. The bins are taken, police and Fire Brigade are paid for, and you get reasonable LA services.

The reason why people are so angry about the charge, is that you WON'T get any services included in that. You'll still have to pay for the bins, roads will still be neglected, LA services will be run down and the money will be used to pay off the debts the bankers and politicians have run up whilst their noses were in the trough.

Going slightly off-topic here, but to be honest for £1000 my mother gets very little. She gets her bin emptied and her street cleaned every couple of months.

But she doesn't make use of the leisure facilities, or used the Police or Fire Brigade, ever.

To be honest, a lot of what the rates in the North are used for, many don't use. Its just something that people accept. And pay.

Dublin21

I personally think you have the right idea buying as early as possible.
Im 26 now, i've been renting since i was 18 and i am raging i've 'wasted' so much money..

However like the rest of the posters have mentioned you need at least 25% deposit for a 1 bed And a permanent job (and usually you need to be in that position for 2-3 years!)

My partner is on contract and the banks won't even consider his earnings when we were looking into it recently - only mine as i am permanent.

Also friends of a work colleague (A couple) went for a mortgage, both permanent with clean records but had never lived away from home.
The banks told them to rent for 6-12 months so they can show you can afford the repayments/lifestyle - unfortunately a savings record just isn't enough.

If i were you i would continue to save as much as i could but try rent for at least 6-12 months. Believe me i know how hard it is to hand money over to a landlord instead of paying it off your own home but honestly 12 months is not long, it will fly in and at least you will be in a better position with your job, know if thats what you want to do etc. And the more money you put off a deposit the less of a mortgage you will need to get.

Good luck!

Terry Ryaner

Dublin21 wrote: »

I personally think you have the right idea buying as early as possible.
Im 26 now, i've been renting since i was 18 and i am raging i've 'wasted' so much money..


Good luck!

Be careful taking advice from some 26 year old who is raging that he didn't buy in 2004 when he was 18.

ABajaninCork

I bought my first property when I was 22, many moons ago. It was a 1-bed flat in London. One beds in London are pretty easy to shift, even now because people like them as starter homes/pensioners downsizing/single people like I was who wanted somewhere stable to live.

But fast forward 25 years. This is Ireland. Ireland is in the worst slump in living memory. There is a glut of houses/apartments due to over-building. Prices have fallen like a stone, and will continue to do so. The problem will be (IMO) exacerbated by the NAMA houses yet to come on stream and the fact that mortgage relief will be ending soon. Nobody knows what the future property and water taxes will be like five years from now. You don't even know if you'll still be in employment. There's no such thing as a 'safe' job now or a 'job for life', no matter who you work for.

OP. FWIW, I would hold on to my money and continue to save as much as you can. I wouldn't buy now and I certainly wouldn't buy a flat. I would look to buy a house, and I would make sure it wasn't a Celtic Tiger lash-up, which may bring its own problems.

Dublin21

Yeah cause i would have got a mortgage at 18 in 2004 with the way prices were.....

I am very glad i didn't buy THAT young and when the prices were that high, but at the same time i am not happy that i haven't bought YET - Ive been renting for 8 years now, thats at least 80k that could have gone towards a house/apt!! Not to mention all the headaches dealing with landlords and not even being able to paint the flipping walls without permission. Its absolutely soul destroying.
If i had 20k now (bearing in mind that i have been working since i was 18 and currently in a permanent job for 4 years) there would be no stopping me going for mortgage.

I know getting and having a mortgage isn't easy but id take it any day over having to rent for another 8 years!

KindOfIrish

50k - genius, 200k - idiot. doesn't need to be big 4 to understand it

LLU

On the difference between renting and buying, someone else on boards described it very well recently:

You are either paying money to rent a place, or paying money to rent the money to buy a place. Both involve a fair bit of 'dead money'.

A one bed apartment is a narrow enough market, not a lot of people will want to buy one if you want to sell it. Do you really want to be married to it for the next 20+ years with no guarantee that its price will have gone up at the time of you selling it?

Dublin21

''You are either paying money to rent a place, or paying money to rent the money to buy a place. Both involve a fair bit of 'dead money''

This doesn't nearly sum up the differences in my opinion!

You are paying towards owning the property - yes it will take years but you are living with the knowledge that it will be yours and you can do practically whatever you want to it.
As said ive paid more than 80k renting so far and i would gladly have paid that to a bank in interest for giving me the money for a house!

You don't have to move yearly (Or worry that the landlord can end the lease at anytime).
You can buy your own furniture etc for the property (Again without having to worry about having to move it/store it/find a partially furnished apt or a landlord sound enough to move some of it out).

I think everyone should experience renting before they buy to see what suits them obviously but for me personally the two do not compare at all..

After renting, to have a place of my 'own' would be absolute luxury!

gosuckonalemon

Dublin21 wrote: »

Yeah cause i would have got a mortgage at 18 in 2004 with the way prices were.....

I am very glad i didn't buy THAT young and when the prices were that high, but at the same time i am not happy that i haven't bought YET - Ive been renting for 8 years now, thats at least 80k that could have gone towards a house/apt!! Not to mention all the headaches dealing with landlords and not even being able to paint the flipping walls without permission. Its absolutely soul destroying.
If i had 20k now (bearing in mind that i have been working since i was 18 and currently in a permanent job for 4 years) there would be no stopping me going for mortgage.

I know getting and having a mortgage isn't easy but id take it any day over having to rent for another 8 years!

80k that would've gone towards an apartment for 350K now worth 150K.

Dublin21

Dublin21 wrote: »

As said ive paid more than 80k renting so far and i would gladly have paid that to a bank in interest for giving me the money for a house!

And live where?


As for the OP, I find it amazing that someone starting for a Big 4 accounting company wouldn't know that having a blank credit history isn't a good thing.

Terry Ryaner

Dublin21 wrote: »

Yeah cause i would have got a mortgage at 18 in 2004 with the way prices were.....

I am very glad i didn't buy THAT young and when the prices were that high, but at the same time i am not happy that i haven't bought YET - Ive been renting for 8 years now, thats at least 80k that could have gone towards a house/apt!! Not to mention all the headaches dealing with landlords and not even being able to paint the flipping walls without permission. Its absolutely soul destroying.
If i had 20k now (bearing in mind that i have been working since i was 18 and currently in a permanent job for 4 years) there would be no stopping me going for mortgage.

I know getting and having a mortgage isn't easy but id take it any day over having to rent for another 8 years!

That money would have went towards interest payments and not equity. You would have negative equity at this stage. I have plenty of friends that would swap being able to paint walls without permission for their 100K negative equity and being stuck in a town they don't want to live in.

Dublin21

As i said i wouldn't have been able to afford a house in the 'good times' i'm talking in the last few years and particularly now.
Its unfortunate for your friends but a lot of ppl are very fortunate being able to buy now!

I have friends/family that have bought while the market is 'low' and paying mortgages of €700e a month now (And i'm not talking a 1 bed apartment). Which is less than i'm paying on rent.

There is always the risk of the market rising/falling, interest rates going up and down, job security etc but at the end of the day im always going to be paying 900-1k for renting and i'd rather pay that towards interest of my own house than to pay it to a landlord. I'm not looking to buy somewhere i am going to want to sell in 5 years time. If i buy somewhere that is it for me. That is how I feel on the matter. No one is going to have the same experience.

Btw pointing out that you can't paint the landlords walls without permission is simply an example of what sort of decisions you can't make when you 'rent' someone else's property for 900e a month! Its absolutely ridiculous money to get pretty much nothing out of!

Terry Ryaner

Dublin21 wrote: »

As i said i wouldn't have been able to afford a house in the 'good times' i'm talking in the last few years and particularly now.
Its unfortunate for your friends but a lot of ppl are very fortunate being able to buy now!

!

This sort of rubbish needs to debunked. There are still far too many people out there suffering from a sickness when it comes to property.

http://cso.ie/en/media/csoie/releasespublications/documents/prices/2012/rppi_aug2012.pdf

Property has fallen in value by 12% in the past year. All the economic indicators are there for this trend to continue.

Dublin21

..I've said it before i'll say it again - I would rather pay 900 + off a mortgage for the next 50 years than pay rent. Simple as.

I honestly don't care if my property drops by 12% because i'll still go to bed at night with the knowledge that the money i am paying at the end of the day is going towards a home that will eventually be mine rather than go through renting for the next umpteen years.

Its not worth it and i'm not just talking about the monetary worth!

MagicMarker

Dublin21 wrote: »

As said ive paid more than 80k renting so far and i would gladly have paid that to a bank in interest for giving me the money for a house!

80k over 8 years works out at over €800 per month. TBH, more fool you for spending stupid money on rent.

Dublin21

MagicMarker wrote: »

80k over 8 years works out at over €800 per month. TBH, more fool you for spending stupid money on rent.

Than what live on the street?

Not a lot of places in Dublin went for under that for the last 8 years.

MagicMarker

Dublin21 wrote: »

Than what live on the street?

Not a lot of places in Dublin went for under that for the last 8 years.

Ever hear of sharing? You could have cut your rent, not to mention all utilities, in half.

Terry Ryaner

Dublin21 wrote: »

..I've said it before i'll say it again - I would rather pay 900 + off a mortgage for the next 50 years than pay rent. Simple as.

I honestly don't care if my property drops by 12% because i'll still go to bed at night with the knowledge that the money i am paying at the end of the day is going towards a home that will eventually be mine rather than go through renting for the next umpteen years.

Its not worth it and i'm not just talking about the monetary worth!

But the vast majority of the money is not going towards your home for two reasons.

1. The early days of your mortgage your payments are almost entirely going towards interest particularly if you are paying over 30+ years.
2. Falling property prices reduce the amount of equity you have in the property.

You don't own your hose when you have a mortgage. The bank hold the deeds and they call the shots.

Dublin21

''1. The early days of your mortgage your payments are almost entirely going towards interest particularly if you are paying over 30+ years.
2. Falling property prices reduce the amount of equity you have in the property.

You don't own your hose when you have a mortgage. The bank hold the deeds and they call the shots''

Yes i know all of this but again it vs so many years of the rental money going towards absolutely Nothing!
I'd rather own Some of a property than nothing at all!

And those 'shots' are nothing compared to landlord demands/restrictions etc once the mortgage repayments are made obviously.

Honestly for me, taking all of the above into account i would still rather buy now than rent..

gosuckonalemon

Dublin21 wrote: »

''1. The early days of your mortgage your payments are almost entirely going towards interest particularly if you are paying over 30+ years.
2. Falling property prices reduce the amount of equity you have in the property.

You don't own your hose when you have a mortgage. The bank hold the deeds and they call the shots''

Yes i know all of this but again it vs so many years of the rental money going towards absolutely Nothing!
I'd rather own Some of a property than nothing at all!

And those 'shots' are nothing compared to landlord demands/restrictions etc once the mortgage repayments are made obviously.

Honestly for me, taking all of the above into account i would still rather buy now than rent..

Stupid is as stupid does. A fool and his money are easily parted.

Would you still prefer to have paid 300K on a mortgage 5 years ago on something that is worth around 120K now? That's what you same to be saying.