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Buy property for College going kids
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16-07-2013 10:27pm#1Hi all, new to boards so looking for advice, I will have two kids going to college in Dublin in September. Eldest girl has a year done on campus in Marino Griffith Ave. second girl did her leaving this year and expects to get points needed for Dit Aungier St. Doing the Maths, campus accomodation is going to cost the guts of €40k :eek: over the next four years. Toying with investing in a property to (a)house them over the next few years and
(b) possibly? act as an investment to sell in the years ahead. Good idea or bad? Which areas would be suitable to serve both Marino and Aungier St?
Which would be best for resale apartment or house? Thanks for any input0
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supersonic64 wrote: »Hi all, new to boards so looking for advice, I will have two kids going to college in Dublin in September. Eldest girl has a year done on campus in Marino Griffith Ave. second girl did her leaving this year and expects to get points needed for Dit Aungier St. Doing the Maths, campus accomodation is going to cost the guts of €40k :eek: over the next four years. Toying with investing in a property to (a)house them over the next few years and
(b) possibly? act as an investment to sell in the years ahead. Good idea or bad? Which areas would be suitable to serve both Marino and Aungier St?
Which would be best for resale apartment or house? Thanks for any input
Hi Super,
Not a bad idea in my mind, something i'm toying with myself as i've one in college and another 2 years off finishing his leaving and heading in that direction.
If there was a time to do it , I'd say now or the next couple of years in the Dublin area.
Mine are in midlands based or the young lad is indicating he'd like AIT in the midlands also.
Besides the obvious - renting being dead money, etc - which bank to leave your investment in at the moment, all those types of worries.
My personal thinking was if the property ticks the boxes of - 1stly the kids and college / accessibility / location.
2nd ly - a good strong rental market if for what ever reason they choose not to stick at or get into that particular college in that town.
3rd ly - a property in an area that would work for us adults in the house that want to work in the city now or in the future. or alternatively as a weekend city dwelling - get away for the usual cultural / city benefits for the family that we don't get on our door step in the country.
Just my own personal knowledge of property in the city and i've been looking at it in my day to day job inspecting homes / apartments etc - but also with the same sort of personal line of thinking your having is in the back of my mind.
City centre: This is the most accessible for both colleges or any 3rd level inst. So your really looking at apartments then. Stay away from 1 beds, bad resale value and limited market. 2 bed /3 bed seems to be good value to be had on some of the receiver sales such as crosbies yard on the north strand (marino in walking distance or 5 minutes on the bus), or the IFSC, some receiver sales on down there also. There are buses that cross town towards DIT , and the Luas and Connolly is on the door step there and also bus aras for getting them home etc.
Houses, there seems to be good value out the northside towards baldoyle, you just need due diligance because some developers have had history in other estates they've built - the dreaded Pyrite word. However the estates they are currently selling are tested to by pyrite free. Again its handy for bus routes and your in marino in 15 minutes and town in 20 from that part of the northside.
Rental demand and rents are decent particularly in the city centre apartments for the IT 'crowd'
Something in the middle of both 3rd level Inst. - your going to be looking at older houses / terraces - circa 1900 - 1960's. Some of this stock that represents good value at the moment usually needs some work and should be looked at carefully to make sure you know what extra you have to put into a property of this age to modernize it and maintain it.
Personally that sort of terraced house / period property living in the city centre wouldn't be attractive to me. I would be more inclined to go for modern apartments that are secure and serviced and easily rented if you have to at any point.
Sorry for waffling on, but i'm doing the same sum's and looking around in Athlone and Galway myself.
mike f0 -
Awkward combination of colleges. Griffith avenue and aungier street? One of them will have a bit of a commute! I would be inclined to look in places like drumcondra. Near to griffith ave and good transport to other side of city. It's good for pretty much all DITs, DCU and trinity so I doubt you would struggle to fill it after they're done... Also, because it's such a popular rental area it should hold its value. Maybe look for 3 bed and let out third room to a friend of theirs at a good rate?0
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I think it is absolute madness. If you want to invest in property, go and find a good letting proposition. Good yield and potential for capital appreciation and easily managed.
The college year is short and rent isn't that expensive. There is interest foregone on the money used to purchase. Houses have to be insured and maintained and domestic appliances have to be maintained. Gardens have to be kept. There are household taxes and bin collections and TV licence. The house has to be secured also. As some people have found in recent times, houses don't always increase in value.
Students don't always get into a convenient college either.
I know a man who bought an apartment in Dublin. He thought his son would go to Trinity. Son changes his mind and goes to UCD instead. He ends up renting the apartment to tenants and paying rent for the son near UCD. The apartment also dropped by over €100k in value.
A three year college course will soon pass, buying a house can be a very long term committment.0 -
I think it is absolute madness. If you want to invest in property, go and find a good letting proposition. Good yield and potential for capital appreciation and easily managed.
The college year is short and rent isn't that expensive. There is interest foregone on the money used to purchase. Houses have to be insured and maintained and domestic appliances have to be maintained. Gardens have to be kept. There are household taxes and bin collections and TV licence. The house has to be secured also. As some people have found in recent times, houses don't always increase in value.
Students don't always get into a convenient college either.
I know a man who bought an apartment in Dublin. He thought his son would go to Trinity. Son changes his mind and goes to UCD instead. He ends up renting the apartment to tenants and paying rent for the son near UCD. The apartment also dropped by over €100k in value.
A three year college course will soon pass, buying a house can be a very long term committment.
If you want to invest in property, go and find a good letting proposition. Good yield and potential for capital appreciation and easily managed and put your kids in it. Average yield on Dublin property is now over 6%. It makes sense on so many levels to buy property for kids to live in especially as he has to pay rent anyway.0 -
I wouldn't be afraid to tell my child to get on a bus from the city centre out to UCD.
Surely a balance could be achieved for safe area for the kids while they are in term, good rental yield, accessibility to transport.
Running costs for a rental or a purchased property are the same - the maintenance, tv licence, insurances etc are just disguised in the monthly rent when your paying an outside landlord.
Its the commitment and investment that is the question.
It all boils down to a personal decision on what to invest in, and if its you kids future and the running cost to provide them with accommodation its attractive to some.
Rent is dead money and always will be, and keeping the money in the bank has inherent risks as is clear to any and all with a passing eye on the media these days.
The sums for purchase over a period a child is in college are easier to swallow with the market in its present condition. I'm sure though if Eban's aquaintance bought at the top of the market and now suffers because the man he knows sibling changed college its unpalatable - but these are different times.
I'd try two words " dublin bus" & " austerity" with the young student if I were in his shoes.0 -
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Unless you are buying with cash then surely its going to cost you the guts of that €40k to take out a mortgage on any kind of half decent apartment in the city anyway?0
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I think it is absolute madness. If you want to invest in property, go and find a good letting proposition. Good yield and potential for capital appreciation and easily managed.
The college year is short and rent isn't that expensive. There is interest foregone on the money used to purchase. Houses have to be insured and maintained and domestic appliances have to be maintained. Gardens have to be kept. There are household taxes and bin collections and TV licence. The house has to be secured also. As some people have found in recent times, houses don't always increase in value.
Students don't always get into a convenient college either.
I know a man who bought an apartment in Dublin. He thought his son would go to Trinity. Son changes his mind and goes to UCD instead. He ends up renting the apartment to tenants and paying rent for the son near UCD. The apartment also dropped by over €100k in value.
A three year college course will soon pass, buying a house can be a very long term committment.
I think that there is merit in the proposal. The locations are separate but with a bit of compromise a location could be agreed on. An apartment would be the best bet from a management point of view. As for the empty months , June July August there is scope with proper management for short term lets e.g. Tourist with families would want self catering rather than hotels. You would need to put in place a system for hand over keys, cleaning between tenancies etc. but it can be done. The rent received would be higher than a normal 1 years tenancy rate also. It would not be unreasonable to charge 600/700 per week to a family who wanted self catering accommodation in Dublin when you compare the cost of them staying in a hotel0 -
If you want to invest in property, go and find a good letting proposition. Good yield and potential for capital appreciation and easily managed and put your kids in it. Average yield on Dublin property is now over 6%. It makes sense on so many levels to buy property for kids to live in especially as he has to pay rent anyway.
If you put your kids in it the return is 0% not 6 %. What are the chances that the best propertty proposition happens to be right beside the college that yourkids attent.
In Athlone where one poster is talking about, rents are pitifully low. $ bedroomed house are going for €500 a month. 8 monts rent can be had for €1500 to €1600 a month. that would even pay the legals on the conveyance. Peroperty prices in that town are dropping like a stone as well.0 -
engineermike wrote: »I wouldn't be afraid to tell my child to get on a bus from the city centre out to UCD.
Surely a balance could be achieved for safe area for the kids while they are in term, good rental yield, accessibility to transport.
Running costs for a rental or a purchased property are the same - the maintenance, tv licence, insurances etc are just disguised in the monthly rent when your paying an outside landlord.
Its the commitment and investment that is the question.
It all boils down to a personal decision on what to invest in, and if its you kids future and the running cost to provide them with accommodation its attractive to some.
Rent is dead money and always will be, and keeping the money in the bank has inherent risks as is clear to any and all with a passing eye on the media these days.
The sums for purchase over a period a child is in college are easier to swallow with the market in its present condition. I'm sure though if Eban's aquaintance bought at the top of the market and now suffers because the man he knows sibling changed college its unpalatable - but these are different times.
I'd try two words " dublin bus" & " austerity" with the young student if I were in his shoes.
Commuting takes time. Bussing around Dublin could take an hour each way. That is two hours a day gone down the drain. A student on a demanding course can do without that.
there is nothing wrong with investing in property if the figures add up. I just think it should be entirely divorced from kids going to college. Rent is an overhead of going to college and it is unwise to try and avoid it by spending a lot of money on an asset that wouldn't be bought in other circumstances. The chances of getting holiday letting is remote as well.0 -
If you put your kids in it the return is 0% not 6 %. What are the chances that the best propertty proposition happens to be right beside the college that yourkids attent.
In Athlone where one poster is talking about, rents are pitifully low. $ bedroomed house are going for €500 a month. 8 monts rent can be had for €1500 to €1600 a month. that would even pay the legals on the conveyance. Peroperty prices in that town are dropping like a stone as well.
Which is why I suggested Drumcondra - which is hugely in rental demand. St Pats, DCU, DIT, Trinity and the city centre all nearby, all huge rental draws. You won't struggle to fill a well maintained place in Drumcondra.Commuting takes time. Bussing around Dublin could take an hour each way. That is two hours a day gone down the drain. A student on a demanding course can do without that.
there is nothing wrong with investing in property if the figures add up. I just think it should be entirely divorced from kids going to college. Rent is an overhead of going to college and it is unwise to try and avoid it by spending a lot of money on an asset that wouldn't be bought in other circumstances. The chances of getting holiday letting is remote as well.
Boo-fcuking-hoo. Poor darlings having to commute. I mean ffs, the majority of kids from Dublin don't have to commute for hours a day and their parents pay for a new place for them immediately next to their college. Oh wait, sorry, most kids within a commutable distance (which I've experienced as over an hour each way) do commute. What kind of pampered princesses do you think most students are?!
OP, a few of my friends in college were living in apartments their parents bought to house them in college. It worked well for them, they rented the spare beds to classmates. They're in areas where there'll always be student demand.
Also, chances are, the kids will need somewhere to live AFTER college. They are more likely to get a job in Dublin than elsewhere in Ireland so once they're in the job, they can start renting it from the parents. If not, get other tenants in (not difficult in flatland areas like Drumcondra). Fed up being a landlord? Sell it. If it was in decent enough condition to buy now, and it's maintained okay, then it should sell okay in a few years time.
As for the numbers stacking up.. If house prices stay the same in 4 years time as they are now, then lets assume you get the same price you paid for it (not hugely unlikely in Dublin right now, especially in solid areas with real demand). Call it €250,000. On a 20 year mortgage, the repayments would be about €1600 a month for 4 years... about 80k all in.. So that's fairly much a loss right there. But, if you sell it for the same price you paid for it then there's only the interest accrued on the mortgage to consider. It probably works out the same? I can't really be bothered doing the maths on it.
It depends on how much cash you have and how much confidence you have that the property market isn't going to crash out again. Also on how willing you would be to rent it out after the kids are finished. It's not necessarily a bad idea, but it's not automatically a good idea either.
The foolish thing to do would be to do as an earlier poster said their friend had done and let the darling rent closer to college having bought an apartment in the city centre (It takes all of 40 minutes max in rush hour to get to UCD from TCD, by the way). If you buy in a decent area with constant demand and are willing to hang on to it for a while then it could work out prudent.0 -
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Commuting takes time. Bussing around Dublin could take an hour each way. That is two hours a day gone down the drain. A student on a demanding course can do without that.
there is nothing wrong with investing in property if the figures add up. I just think it should be entirely divorced from kids going to college. Rent is an overhead of going to college and it is unwise to try and avoid it by spending a lot of money on an asset that wouldn't be bought in other circumstances. The chances of getting holiday letting is remote as well.
LOL, when I was at college we spent most of the first two years drinking, chatting up the ladies, partying and living life. That's what college is all about.
In case you are wondering I obtained a first class honors degree.0 -
LOL, when I was at college we spent most of the first two years drinking, chatting up the ladies, partying and living life. That's what college is all about.
In case you are wondering I obtained a first class honors degree.
I agree with you. Obviously keep your eye on the ball so that you don't mess up your Summer waiting for repeats. First and second years can be done and have a great time as well. But seriously third and final year it is worth putting in the work to get a good degree.
Student are well able for commute be it walk, cycle or bus. Its all part of the student experience. They don't need Mammy checking if they have clean underwear on before they go out0 -
They don't need Mammy checking if they have clean underwear on before they go out
To right! There is too much mollycoddling in today's society. Let the kids get on and play together nicely.
If the OP has the cash and wants to do the right thing then gift them the money and let them spend it how they choose.
If you want to gamble on property then I hear the government have just opened a lovely REITS
Getting your family involved in an investment, particularly where property is involved can be a huge mistake.
My mother bought a bungalow so that my grandmother could move into it and be closer to the family.
Turns out she did not want to move, so ended up a huge waste of money and resentment.0 -
Buying a property for kids going to college ? My time machine worked ! I'm back in 2006.0
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Buying a property for kids going to college ? My time machine worked ! I'm back in 2006.
Except buying a property in 2006 would have been a stupid idea. Buying now is not.
All the arguments against the OP buying appear to be "Oh Oh property, that's bad". There are clear reasons to buy if the OP is going to be paying 40k in rent anyway. Not only may it be more cost effective, it means he has a property he can trust for his kids, no worries if they need to stay over summer, no hassle looking for a new property to rent every year and then he has a property in Dublin he can use if he wishes0 -
OP, what are you going to do if your kids trash the place, don't pay the rent (they are going to be paying rent, at least while they're working during the summer, aren't they?) , have loud parties (or worse) and piss off the neighbours, drop out of college and turn the apartment into a brothel, get preggers and go onto the lone parents benefits. Or even if they just decide that this isn't where they want to live.
Now you may be lucky enough to have kids who don't do any of the above.
Or more lileky they will only do a little of it, most likely a few loud parties, hopefully their friends aren't into text-a-mob tricks.
But if you're gong to be acting as a landlord for family members, you need to think through the likely consequences and options, and what rules and controls you need to put into place to protect yourself, and then.
As well as thinking through the full financial and legal consequences. Eg I'm pretty sure that tenancy protection legisation applies to them if they're living in a house you own that's not the family home.0 -
Mrs OBumble wrote: »I'm pretty sure that tenancy protection legisation applies to them if they're living in a house you own that's not the family home.
Thats an interesting one actually; how would they be protected legally in the house? I know that anyone they live with would have no part 4 rights as they would be licensees, but how is the actual family member of the landlord seen? Do they get part 4 rights?0 -
Its not a terrible idea tbh. An apartment can be picked up for what would be deemed a reasonable price. The young adults in question could obviously pay some form of rent. (reduced) but it would all go towards the mortgage as such on the property and give them lessons in money management.0
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miss no stars wrote: »
I can't really be bothered doing the maths on it.
./QUOTE]
Says it all really.0 -
I can't really be bothered doing the maths on it.
./QUOTE]
Says it all really.
Maths:
Op plans to rent a property in Dublin for €10,000 a year for 4 years.
To buy same property, based on average yields would cost €150,000. Now obviously that is average yield and with a bit of work he could do far better than that but let's take the average to be fair.
Mortgage for €150,000 (I know he won't get 100% mortgage but he has the lost interest earned on the deposit so it makes figures fairer to call it a 100% mortgage)
Interest rate is 4.5% a year. That means it will cost him €6,750 a year in interest. Average costs for renting a property are 1% a year. His costs will be less as he will not have any advertising costs or actual costs of collecting rent but again to be fair lets call it 1%. That is another €1500 a year bring total cost to €8,250.
Add to this the initial costs of buying, stamp duty etc say about €4,000
Multiply by 4 years and the cost of buying is €37,000
So buying or renting will cost pretty much the same except the op will have the extra conveniences of his kids having their own property as I described before.
Whether he makes a profit financially will depend on the market. If prices rise he will make money, if they fall he will loose, unless he intends to continue to rent property. My bet is that rental properties in Dublin will not cost less in 4 years than they do now but I know people might disagree with that.0 -
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miss no stars wrote: »
I can't really be bothered doing the maths on it.
.
Says it all really.
I was referring to the total interest outstanding on the mortgage. But how nice of you to deliberately misrepresent what I said. Go hide under a rock somewhere. It would be a good bit more useful.0 -
My mother rent a flat in a house that was brought for the landlords kids going to college in the 1970s and she lived in it in the 1980s. Unless you can get a bargain and pay for it in cash I wont bother. But you can get some massive pre 63s, that the landlords cant afford to update and are really dumping on the market. You might get a large 6 bed in Drumcondra for around €250-300k in horrible conditions. But your children could let the other 4 beds at €400 a room. Meaning you could make €1,600 a month for 8/9 months of the year, but you are saving €800 paying rent for them. Gift the house to them, so they can earn €10,000 of the rent tax free under rent a room scheme. Plus rents are rising about 5% a year in Dublin
Its not a bad idea but you seriously need to get a bargain of a house. You might with all the massive pre 63s for sale0 -
My mother rent a flat in a house that was brought for the landlords kids going to college in the 1970s and she lived in it in the 1980s. Unless you can get a bargain and pay for it in cash I wont bother. But you can get some massive pre 63s, that the landlords cant afford to update and are really dumping on the market. You might get a large 6 bed in Drumcondra for around €250-300k in horrible conditions. But your children could let the other 4 beds at €400 a room. Meaning you could make €1,600 a month for 8/9 months of the year, but you are saving €800 paying rent for them. Gift the house to them, so they can earn €10,000 of the rent tax free under rent a room scheme. Plus rents are rising about 5% a year in Dublin
Its not a bad idea but you seriously need to get a bargain of a house. You might with all the massive pre 63s for sale
The reason they are being sold is that they don't comply with the regulations. They can't be let as they are. They need a lot of work done to make them comply with planning permission and conservation requirements. It is an awful lot of hassle to save a few months rent.0 -
I have heard of a few people now who are working in Dublin and have bought apartments to live in during the week. Cheaper than renting.0
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OP, where did you get the €40k figure? It seems on the high side. You'll find rooms to rent in shared accommodation near Marino or DIT for €350-400 per month. Even at the higher figure, that gives:supersonic64 wrote: »Hi all, new to boards so looking for advice, I will have two kids going to college in Dublin in September. Eldest girl has a year done on campus in Marino Griffith Ave. second girl did her leaving this year and expects to get points needed for Dit Aungier St. Doing the Maths, campus accomodation is going to cost the guts of €40k :eek: over the next four years.
Eldest: €400 x 3 years x 9 months = €10,800
Second: €400 x 4 years x 9 months = €14,400
That's approx €25k. Even factoring in rent increases over the coming years, you're still likely to be under €30k.
If you're basing your calculations on "all-in campus accommodation" that covers all bills, broadband etc, then the figures will obviously be higher. But these additional costs will also have to be borne if you buy, assuming you're happy to pick up the tab for everything that they spend over the next 3-4 years, but that's another matter.0 -
EricPraline wrote: »OP, where did you get the €40k figure?
If you're basing your calculations on "all-in campus accommodation" that covers all bills, broadband etc, then the figures will obviously be higher. But these additional costs will also have to be borne if you buy, assuming you're happy to pick up the tab for everything that they spend over the next 3-4 years, but that's another matter.
Yes Eric, I was basing it on the all-in campus price that we paid for the eldest girl in Marino this year. I understand your point about having to pay utilities, BB etc. even if we purchase a property. Thanks to all for input both positive and negative.
Are there any/many decent 3bed apartment complexes around city center that would be a midway point between Marino College and Aungier St?0 -
engineermike wrote: »Besides the obvious - renting being dead money, etc
It's 2006 again, we're back in business baby!!0
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