Opinions on first time buying

gerbear1

Hi guys,

I've just been reading through the buying in 2013 thread and most people seem to think prices are going to drop a bit more, which I agree with. Anyway I'm not too worried about prices dropping once I get something that I'm happy with. I've only gone to look at one apartment so far, but the idea would be to find a 2 bed flat somewhere in and around Dublin city centre. I plan on having a budget of around 150k.

I went to look at this place today. I think it's a good example because it's a pretty typical looking decent 2 bed apartment. It looks like it does in the photos, so I was happy with that. It's the first place I've seen so obviously I'll go look at more, but let's say I wanted to buy this place. Is 150k a realistic price? I read that you should get at least 10% off the price and realistically a lot will sell at 30% lower, do people think that's still valid? I mean if a place is up for 90k I doubt they'd drop as low as 60k, as that's a big chunk, but 200k to 170k doesn't seem that big a drop if you know what I mean.

http://www.myhome.ie/residential/brochure/2-alexandra-court-fenian-street-south-city-centre-dublin-2/2282708

I'm a complete novice to this. I didn't even know what I was meant to ask when I went to look at the apartment, it was clean and looked like the photos so there was no surprised when I walked in. Any new buyers advise is welcome and what to expect regarding pricing would also be great, especially if anybody has bought a flat in the city centre in the last year or so.

Thanks.

fricatus

gerbear1 wrote: »

I've just been reading through the buying in 2013 thread and most people seem to think prices are going to drop a bit more, which I agree with. Anyway I'm not too worried about prices dropping once I get something that I'm happy with.

They may drop more, but increasingly it looks like prices for certain types of accommodation in certain areas are stabilising. Some would say that apartments are still dropping in price, but that might be offset by Dublin city centre prices stabilising... the market is probably not far off the bottom anyway, so while there's no need to rush into things, you probably shouldn't hold out for the market to drop further if you do find "that perfect home"

gerbear1 wrote: »

I'll go look at more, but let's say I wanted to buy this place. Is 150k a realistic price? I read that you should get at least 10% off the price and realistically a lot will sell at 30% lower, do people think that's still valid? I mean if a place is up for 90k I doubt they'd drop as low as 60k, as that's a big chunk, but 200k to 170k doesn't seem that big a drop if you know what I mean

Ultimately the price is determined by what people are willing to pay for it. However there are two useful gauges that you can use:
1. Rental yield: if you were an investor, you would expect to make 6-8% p.a. on your investment, so for every €100,000 of the purchase price, you would expect between €6,000 and 8,000 yearly rent. See what rents are like for similar apartments in that area and calculate back accordingly to get the purchase price an investor would pay.
2. Check the prices paid recently in your area on http://www.propertypriceregister.ie/ - I don't think you can filter it for apartments, but you should certainly be able to get something useful out of it, especially if you're handy with Excel.

gerbear1 wrote: »

I'm a complete novice to this. I didn't even know what I was meant to ask when I went to look at the apartment, it was clean and looked like the photos so there was no surprised when I walked in. Any new buyers advise is welcome and what to expect regarding pricing would also be great, especially if anybody has bought a flat in the city centre in the last year or so.

I guess find out about parking, management fees, if there are any "rules" such as noise, rubbish disposal, bikes in the hallway, etc. Don't buy unless you are prepared to live there for at least the next 10 years. And make sure to pay for a good surveyor/engineer to do a report around the time you hand over a booking deposit. It's not a condition of the sale, so some people skip over it to save €250 or so (when shelling out €200,000... :rolleyes:). It will be well worth it a) for peace of mind, and b) if they do discover something major wrong with it.

Good luck!

riclad

See whats the rules ,re tv, internet, there maybe 1 choice of cable provider for tv,IS there a phone cable connected to the apartment.Then if you want internet ,broadband ,you just ring eircom to get a phone line.
Some tv companys eg upc have tv,internet in certain areas.
IS sky tv avaidable, some blocks have a communal sat dish on the roof to provide sky tv.
OR you may have 1 choice ,get cable tv,from 1company no acess to sky tv.
IN most areas ,of dublin prices are still falling,there,s alot of empty apartment blocks, owned by nama, 90 per cent complete.

looters

What age are you??

Would you really want to live in that appartment you posted? and what would you spend on that?

I, personally wouldnt spend 60k on it.
Dont think about what the price should be, think about what you are willing to spend on it. If everyone had this attitude, a select few wouldnt control the flock.

StillWaters

looters wrote: »

Would you really want to live in that appartment you posted? and what would you spend on that?

I, personally wouldnt spend 60k on it.

What, you think it's worth <€60k? That's incredible. What age are you? Do you understand yield?

gerbear1

looters wrote: »

What age are you??

Would you really want to live in that appartment you posted? and what would you spend on that?

I, personally wouldnt spend 60k on it.
Dont think about what the price should be, think about what you are willing to spend on it. If everyone had this attitude, a select few wouldnt control the flock.

I'm 28. I would live in that apartment and I'd pay 140k for it.

delthedriver

gerbear1 wrote: »

Hi guys,

I've just been reading through the buying in 2013 thread and most people seem to think prices are going to drop a bit more, which I agree with. Anyway I'm not too worried about prices dropping once I get something that I'm happy with. I've only gone to look at one apartment so far, but the idea would be to find a 2 bed flat somewhere in and around Dublin city centre. I plan on having a budget of around 150k.

I went to look at this place today. I think it's a good example because it's a pretty typical looking decent 2 bed apartment. It looks like it does in the photos, so I was happy with that. It's the first place I've seen so obviously I'll go look at more, but let's say I wanted to buy this place. Is 150k a realistic price? I read that you should get at least 10% off the price and realistically a lot will sell at 30% lower, do people think that's still valid? I mean if a place is up for 90k I doubt they'd drop as low as 60k, as that's a big chunk, but 200k to 170k doesn't seem that big a drop if you know what I mean.

http://www.myhome.ie/residential/brochure/2-alexandra-court-fenian-street-south-city-centre-dublin-2/2282708

I'm a complete novice to this. I didn't even know what I was meant to ask when I went to look at the apartment, it was clean and looked like the photos so there was no surprised when I walked in. Any new buyers advise is welcome and what to expect regarding pricing would also be great, especially if anybody has bought a flat in the city centre in the last year or so.

Thanks.

Please take your time.

Location , Location, Location!!!!!!

Do you see yourself living there for the next 5/7 years?

The appartment is small, does not have a second bathroom ensuite. Something to consider particularly if you decide to rent a room out.

It seems a lot of money for an ordinary appartment in a not so extraordinary location.

There are plenty more to look at.

Why this appartment and location?

riclad

I think theres loads of 2bed apartments going for 140,150k,
eg batchelors walk area, i know its like 50k plus premium once you cross the liffey.IE southside vs northside.

delthedriver

riclad wrote: »

I think theres loads of 2bed apartments going for 140,150k,
eg batchelors walk area, i know its like 50k plus premium once you cross the liffey.IE southside vs northside.

Very interesting.

What percentage of the appartments in these blocks are owner occupied, or are they simply investors offloading rental appartments.

It all depends on what the OPS needs are?
Proximity to work,nightlife,clubs and pubs?

Within a couple of years some of these priorities can change radically.

Would Op be prepared to consider a location a short Dart ride away, yet benefit from a more stylish location with pubs, sports clubs,restaurants etc on doorstep? 2 Bed Appartments asking prices sub €200 k ?

Buying your first property is exciting, however buy the wrong one or in the wrong location can be a nightmare

hfallada

The management fee is very high at €1,880 a year. I know people paying around €1000 in service fees for a 2 bed.

Also the fact its a first floor apartment it could be quite noisy compared to the other floors. But it's a good location. What was the price paid for it when it was sold originally. Most people believe take the boom price minus 65-70%.

Idbatterim

are you looking to live in this property or let it out? E1880 is a very high management fee, and this should be reflected in the asking price. I certainly wouldnt be paying anything like the asking price for it!

delthedriver

hfallada wrote: »

The management fee is very high at €1,880 a year. I know people paying around €1000 in service fees for a 2 bed.

Also the fact its a first floor apartment it could be quite noisy compared to the other floors. But it's a good location. What was the price paid for it when it was sold originally. Most people believe take the boom price minus 65-70%.

The €1880 management fee is off the wall.

Agree appartment could be noisy.

How many of the appartments in this development are owner occuppied??

riclad

You could probably buy a 2bed in the city centre,in a smaller building ,
1000 to 1200 service charges.Buildings with 2 or 3 lifts =large service charges.Large building with underground car park, higher maintenance,higher charges.
not much benefit to you if you do not drive.

gerbear1

delthedriver wrote: »

Very interesting.

What percentage of the appartments in these blocks are owner occupied, or are they simply investors offloading rental appartments.

It all depends on what the OPS needs are?
Proximity to work,nightlife,clubs and pubs?

Within a couple of years some of these priorities can change radically.

Would Op be prepared to consider a location a short Dart ride away, yet benefit from a more stylish location with pubs, sports clubs,restaurants etc on doorstep? 2 Bed Appartments asking prices sub €200 k ?

Buying your first property is exciting, however buy the wrong one or in the wrong location can be a nightmare

That's a good point about how many blocks are owner occupied, I never thought to ask that.

I'm using this apartment as an example just because I think it's in decent nick, OK size and in the city centre. I like the location, it's handy for everything, going out at the weekend, close to work and I think even if I changed my job I'm sure I would be close to where that would be.

My plan is to live in whatever I buy for about the next 5 years. After that I could see myself wanting to move out of the city centre for sure, but I reckon a city centre flat would probably be handy enough to rent and cover whatever costs it has. Or even sell it. Basically the way I'm looking at it, is right now I'm living in city centre, paying 6k a year in rent, which is likely to go up. I could probably live the same way I am right now (with one flatmate) and be close to everything yet instead of paying rent pay towards a flat. I have a bit saved up for deposit, the bank said I'd likely be OK for a mortgage. I have no commitments on payments every month except for my rent right now, so I don't see myself having any problems paying a mortgage on the full flat at least in the short to medium term.

Does anybody agree or disagree with my thinking here? I'm not in any rush at all to get a place, as in if this time next year I was still looking for something I liked it wouldn't bother me. It's very early days right now for me and my search!

what recession?

If you got that Alexandra Court apartment for €150k you'd be doing well. Have they accepted that?

listermint

The last one of these that went for mortgage was in 2010 and achieved a sale price of 185,000


http://www.propertypriceregister.ie/Website/npsra/PPR/npsra-ppr.nsf/eStampUNID/UNID-F407A1AE858BC0A780257A7D0055BE94?OpenDocument


Number 6

gerbear1

what recession? wrote: »

If you got that Alexandra Court apartment for €150k you'd be doing well. Have they accepted that?

I never made an offer, just using this place as an example of something I'd like. It's the first place I went to see, so I won't be making on offer on it anyway, unless it's still for sale in 6 months time.

gerbear1

listermint wrote: »

The last one of these that went for mortgage was in 2010 and achieved a sale price of 185,000


http://www.propertypriceregister.ie/Website/npsra/PPR/npsra-ppr.nsf/eStampUNID/UNID-F407A1AE858BC0A780257A7D0055BE94?OpenDocument


Number 6

That's actually Dundrum, so a different building altogether. I was trying to find Alexander Court, Dublin 2 on the list, but I don't think any of them have been sold.

fricatus

gerbear1 wrote: »

My plan is to live in whatever I buy for about the next 5 years.

gerbear1 wrote: »

Does anybody agree or disagree with my thinking here? I'm not in any rush at all to get a place, as in if this time next year I was still looking for something I liked it wouldn't bother me.

Then you're getting into a 4-5 year timeframe for building up enough equity in the apartment to sell it and have a deposit to buy somewhere else... that might be a bit ambitious, especially if prices continue to fall (even slightly). Early on in your mortgage you'll mostly be paying interest, so the capital amount will only be reducing slowly every month.

If you have a mortgage of €150000 over 20 years, you'll be paying €989 a month, of which about €364 initially is going off the capital. So after 4-5 years you'll still only have paid off €25k after handing over €55k in payments. A small decrease in prices over that period would wipe all that out (although a small increase would leave you sitting pretty).

I think 4-5 years is too short a time to be sure about this. In that timeframe, you need to look at it as an investment and be very much cutthroat about getting a good deal. If you were planning to stay there for 10 years, you would be insulated quite a bit more from the vagaries of the market. You can of course rent it out, but that limits what you can buy after that, and it's a massive hassle.

It's up to you, but I would buy somewhere I could live for 10 years and be done with it. It's not nice to be unable to sell and move on because of NE, believe me, but at least I bought somewhere I was (and still am) happy with. If I'd bought a small apartment, hoping it would rise in price, I dread to think what my circumstances would be like now.

gerbear1

fricatus wrote: »

If you have a mortgage of €150000 over 20 years, you'll be paying €989 a month, of which about €364 initially is going off the capital. So after 4-5 years you'll still only have paid off €25k after handing over €55k in payments. A small decrease in prices over that period would wipe all that out (although a small increase would leave you sitting pretty).

I'm just going to focus on this part. Because my my calculations I'll be spending a minimum of 30k over the next 5 years in rent, with one other flatmate in a 2 bed apartment. So if I'm to pay off a mortgage and live in the same condition with one flatmate, I reckon it will cost me about the same. Forgetting about housing prices going up or down, surely my logic makes sense that I would be better off to pay toward the flat than just paying the rent no?

fricatus

gerbear1 wrote: »

I'm just going to focus on this part. Because my my calculations I'll be spending a minimum of 30k over the next 5 years in rent, with one other flatmate in a 2 bed apartment. So if I'm to pay off a mortgage and live in the same condition with one flatmate, I reckon it will cost me about the same. Forgetting about housing prices going up or down, surely my logic makes sense that I would be better off to pay toward the flat than just paying the rent no?

OK, so what you're saying is the following?

With flatmate in rented accommodation: 30k rent, save 25k over 5 years
versus
Own accommodation, no flatmate: 55k mortgage payments, build up 25k equity

And this leaves you in the same position? Yes, theoretically, you're right, but only in the unlikely event that you sell for the same amount as you paid. (I'm deliberately not taking account of your deposit, stamp duty, solicitor's fees, maintenance, house insurance, etc., but you will have to include these when you're doing your sums).

It's a big risk. Your equity is wiped out if prices fall by €25k, but if they rise by anything at all, you're quids in. Not having to share with a flatmate is a bonus, but it's a big gamble.

Also, my figures above are based on a 5% mortgage. What if rates go up? Are you at a point in your life where you want to settle down, or could work present you with opportunities abroad or elsewhere in the country?

gerbear1

fricatus wrote: »

OK, so what you're saying is the following?

With flatmate in rented accommodation: 30k rent, save 25k over 5 years
versus
Own accommodation, no flatmate: 55k mortgage payments, build up 25k equity

And this leaves you in the same position? Yes, theoretically, you're right, but only in the unlikely event that you sell for the same amount as you paid. (I'm deliberately not taking account of your deposit, stamp duty, solicitor's fees, maintenance, house insurance, etc., but you will have to include these when you're doing your sums).

It's a big risk. Your equity is wiped out if prices fall by €25k, but if they rise by anything at all, you're quids in. Not having to share with a flatmate is a bonus, but it's a big gamble.

Also, my figures above are based on a 5% mortgage. What if rates go up? Are you at a point in your life where you want to settle down, or could work present you with opportunities abroad or elsewhere in the country?

I understand your point, thanks for the advise. More for me to think about! As said complete novice to this so wasn't even thinking about figures like this to begin with.

riclad

You could buy a 1bed apartment city centre,100k, or a 2bed house city centre, 100k,Prices are still falling,say you buy 2bed apartment,160, in 5 years time it might be only worth 100 0r 110k.
IN general there tends to 50k premium if you buy apartment on southside, theres plenty of apartments for sale,on the quays, towards 4courts, area ,on the northside.

Idbatterim

the plan in principal isnt a bad idea, but with those management fees and that asking price, i wouldnt be convinced. Will you be letting out the second bedroom? the two below dont look bad...

http://www.daft.ie/searchsale.daft?id=648083
http://www.daft.ie/searchsale.daft?id=433100

gerbear1

The thread has been really helpful for me. I've kinda realised that my idea on paper sounded OK, but now that I think about it, I don't think I'm really ready to put every penny I have into a flat, along with piling up on debt. I'll keep an eye on what's on offer, but I'm probably better off waiting a couple of years.