Apartment - buying vs. renting in 2014

superman28

Apart from interst rate hikes and buying a shoddy built apartment and the risks of prices taking a tumble,, unfortunately your budget seems quite low.. so your choice is limited,, I would only consider an appartment in a really good area,, otherwise I wouldn't take the risk,, and continue to save for a house..

I see the biggest risk to this as I can see is your relationship with your GF,, if this breaks down after you have bought you are in real trouble.. are you certain that you will stay together in the long term?? I would discuss this in detail with your other half,.. this might sound harsh,, but read the joint mortage problems section on the askaboutmoney forum.. its just something to consider..

http://www.askaboutmoney.com/forumdisplay.php?f=122

domedome

Hi there,
I don't think any apartment that would cost circa 135,000 Euro would rent out at 1,000 pcm. The ratio of sale price versus rent price don't add up. I think you would need to spend at least 180,000 to buy a flat that would rent out for 1,000 pcm, in which case you would need to weigh up your figures again re outgoings over three years.

podge018

Disagree with that.

http://www.myhome.ie/residential/brochure/43-the-tolka-prospect-hill-finglas-dublin-11/2811069

There's one for exactly that price which would easily yield over €1,000.

There's apartments in Meakstown (north Finglas) going for less that 100k that would yield 1200 per month.

€95k - http://www.myhome.ie/residential/brochure/83-lanesborough-court-off-lanesborough-avenue-finglas-dublin-11/2798856

€1,200 - http://www.daft.ie/lettings/lanesborough-mews-finglas-dublin/1442283/#

Zzyzx

Revised figures:

Zzyzx wrote: »

Purchase apartment:
Management fees = €1,500/year
Yearly interest on mortgage (4.7% of €100,000 mortgage) = €4,700/year
Solicitors/engineers/etc fees = €2,500 once off
Stamp duty = €1,000 once off
cooker/fridge/washing machine/furniture/beds/table/chairs/etc = €3,000 once off
Loss of interest on deposit = €250/year
Property tax = €100/year
Total cost over 3 years = €26,150

Rent apartment:
Rent = €12,000/year
Total cost over 3 years = €36,000

Any other suggestions on anything I may have left out are welcome, it's definitely an eye opener for me so far.

Daithi_2014

Zzyzx wrote: »

Revised figures:



Any other suggestions on anything I may have left out are welcome, it's definitely an eye opener for me so far.

You are just throwing money away there in your buying costs. Why dont you just light cigarettes with it.
unless you have expensive tastes you can half that kit out cost easily.
Half the solicitor engineers cost too. Shop around.
And dont even think about buying somewhere that has a management fee as high as €1500 for an apartment. If the management fee is more than €700 - 800 then walk away. You are being ripped. Look around at other developments and talk to the committee. You'll find the ones charging €1500 couldnt manage flushing a toilet, so run a mile from them.

Zzyzx

Daithi_2014 wrote: »

You are just throwing money away there in your buying costs. Why dont you just light cigarettes with it.
unless you have expensive tastes you can half that kit out cost easily.
Half the solicitor engineers cost too. Shop around.
And dont even think about buying somewhere that has a management fee as high as €1500 for an apartment. If the management fee is more than €700 - 800 then walk away. You are being ripped. Look around at other developments and talk to the committee. You'll find the ones charging €1500 couldnt manage flushing a toilet, so run a mile from them.

Are these apartments with €700-€800 management fee in Dublin? I've never seen fees lower than €1,200/month in Dublin. Viewed 2 recently that were €1,800/year management fees.

eclectichoney

+1 Also low management fees can be a bad thing, usually means no/limited sinking fund and poorly run if it is a complex with a lift and common outdoor areas (if no lift or outdoors areas it may be significantly lower).

Daithi_2014

Zzyzx wrote: »

Are these apartments with €700-€800 management fee in Dublin? I've never seen fees lower than €1,200/month in Dublin. Viewed 2 recently that were €1,800/year management fees.

Yes. I've been on a couple of committees and when I questioned the high fees it turned out that there was shenanigans going on. Jobs for mates, higher fees for differnet typed apartments than the people on the committee, to bring down the fees for theirs. It was quite shocking actually.
Once this was all pointed out with a promise to disclose the people involved and what they were doing the fees came down to a normal level.
You need to get full accounts for those €1800 a year ones you are looking at and question them.
And its quite simple to check the sinking fund too.