Buying apt for more disposable income?

handlemaster

Benevolent Misanthrope wrote: »

handlemaster wrote: »

Why do you think there could be a big plunge ? What are you basing this on ? Nothing to suggest that at the moment

Oddly enough, that's what the general public thought 10 years ago. By the time the evidence for such a plunge is visible, it will already have happened.

The writing was on the wall for a while before the fall. We are along way from that. The real demand for housing is very strong.... actual housing for families not workers building other houses. Just saying you think this is going to be a big fall over the next two years doesn't mean anything. Its just guessing. I think it will be sunny next month... perhaps it will be perhaps it won't. If it does turn out to be true it was still only a guess based on my feelings / sentiment rather than any hard research.

Benevolent Misanthrope

handlemaster wrote: »

The writing was on the wall for a while before the fall. We are along way from that. The real demand for housing is very strong.... actual housing for families not workers building other houses. Just saying you think this is going to be a big fall over the next two years doesn't mean anything. Its just guessing. I think it will be sunny next month... perhaps it will be perhaps it won't. If it does turn out to be true it was still only a guess based on my feelings / sentiment rather than any hard research.

You misunderstand.

I am saying that I think it is possible that another black swan is due in the next few years. I have listed a few examples above, but there are dozens of them.

I mention it because the OP is suggesting borrowing a large sum of money to buy an asset which he feels cannot fall in value. He is making assumptions about:

1. The Cork property market.
2. The Irish property market.
3. His job security.
4. The Irish economy
5. The European economy
6. The world economy
7. Oil prices
8. Peace in Europe, elsewhere
9. Bond rates
10. Political stability here and elsewhere
...and so on.

I've no problem with people buying - I just bought - I just think people need to be aware that it's not a one-way bet.

(Before the last bubble I used to spend hours outlining well-researched reasons why we were headed for a crash - I doubt it stopped anyone buying then, and I can't be arsed spending my time doing it again. Let people learn themselves.)

Kai123

Benevolent Misanthrope wrote: »

You misunderstand.

I am saying that I think it is possible that another black swan is due in the next few years. I have listed a few examples above, but there are dozens of them.

I mention it because the OP is suggesting borrowing a large sum of money to buy an asset which he feels cannot fall in value. He is making assumptions about:

1. The Cork property market.
2. The Irish property market.
3. His job security.
4. The Irish economy
5. The European economy
6. The world economy
7. Oil prices
8. Peace in Europe, elsewhere
9. Bond rates
10. Political stability here and elsewhere
...and so on.

I've no problem with people buying - I just bought - I just think people need to be aware that it's not a one-way bet.

(Before the last bubble I used to spend hours outlining well-researched reasons why we were headed for a crash - I doubt it stopped anyone buying then, and I can't be arsed spending my time doing it again. Let people learn themselves.)

The issue is with a volatile rental market compared to an apartment. Buying also brings stability to a certain extent. All the external factors that might upset the balance are reasons to cause far more concern regardless if I bought or not.

Lets say the euro collapses. A deed in your name would be worth more than whatever new currency you had in your bank. I know its an extreme example but I'd rather have the place at that point.

If I bought somewhere and it fell in-price, I wouldn't mind. It would be a very cheap place anyway and would dig my heels in. Its not about the risk of the housing market, its about being financially stable and making the most of my income. If I broke even now to my rental costs, at least I'd be paying into a mortgage and I'd still have a 1k saving buffer.

My only fear is renting an apartment, its a ticking time-bomb before you have neighbours from hell.

Anyway, my cousin is moving over from the UK and we are going to rent somewhere. I've a year to figure it out after that and hopefully will have a good bit more to leverage with. If WW3 starts or the Euro collapses, at least all of this will be the least of my worries

Kai123

Kai123 wrote: »

Lets say the euro collapses. A deed in your name would be worth more than whatever new currency you had in your bank. I know its an extreme example but I'd rather have the place at that point.

At excellent point of course, if a lot of the doomsday scenarios actually happened you would be in one hell of a dodgy position if renting.

Benevolent Misanthrope

Valentina Tall Vengeance wrote: »

At excellent point of course, if a lot of the doomsday scenarios actually happened you would be in one hell of a dodgy position if renting.

Because the landlord will kick you out and replace you with...?

Benevolent Misanthrope

Benevolent Misanthrope wrote: »

Because the landlord will kick you out and replace you with...?

Well if all hell breaks loose like some are predicting I don't property owners are going to care about tenancy law etc so who knows. There would be a lot of uncertainty that's for sure.

Its all if's and but's anyway with no evidence of a any form of collapse of any sort on the horizon. People need to remember things are nothing like the Celtic tiger now.

athtrasna

The property market thread http://touch.boards.ie/thread/2057540439/84/#post99835000 may be a better place to continue this discussion as it's strayed a long way from the OP's situation. Thanks

Shelga

The issue when people say "buy somewhere you'd be happy to live for 10 years" is if you're single, you can't be sure you'd be happy to live there for a decade- you could meet someone 2 years in and want to move. To me, it's basically saying don't buy if you're single. It's good advice in theory but real life is more complex.

I'm nearly 29, will be in a position to buy in the next 6-12 months. Like many, I'm done with sharing, and am also single. Say I buy an apartment and live there comfortably for 2 years. Then I meet someone and we want to buy a house together. Should I just rent until I'm ready to buy my forever house? That would mean approximately £18k paid in rent vs roughly £35k paid off a mortgage in the same time period, including deposit.

Genuinely don't know what's best. I have no interest in making profit off of property, but I really want my own place and for it to feel like my home, not a rented commodity that I could have to move from every 6-12 months. I hate moving.

Let's assume that were I to stay single I would be happy to live in the property indefinitely, just me and my cats. :pac: What is for the best? I live in the UK so maybe market economics and rules are slightly different, but basic dilemma is the same as Ireland.

*edit* was forgetting interest payments, duh, so say £8k of capital paid off a £140k loan in 2 years, assuming property is worth £160k. So say I own ~18% of the property after 2 years (assuming I have a £20k deposit), vs having paid £18k in rent. I also live in a city where property prices are going up by 5% a year but am very aware I don't want to find myself caught up in a panic like so many are!

PhoenixParker

Shelga wrote: »

The issue when people say "buy somewhere you'd be happy to live for 10 years" is if you're single, you can't be sure you'd be happy to live there for a decade- you could meet someone 2 years in and want to move. To me, it's basically saying don't buy if you're single. It's good advice in theory but real life is more complex.

I'm nearly 29, will be in a position to buy in the next 6-12 months. Like many, I'm done with sharing, and am also single. Say I buy an apartment and live there comfortably for 2 years. Then I meet someone and we want to buy a house together. Should I just rent until I'm ready to buy my forever house? That would mean approximately £18k paid in rent vs roughly £35k paid off a mortgage in the same time period, including deposit.

Genuinely don't know what's best. I have no interest in making profit off of property, but I really want my own place and for it to feel like my home, not a rented commodity that I could have to move from every 6-12 months. I hate moving.

Let's assume that were I to stay single I would be happy to live in the property indefinitely, just me and my cats. :pac: What is for the best? I live in the UK so maybe market economics and rules are slightly different, but basic dilemma is the same as Ireland.

None of us have a crystal ball, whether that's you, me or the OP.

At 29, there's a good chance you'll meet someone and maybe decide to have kids in the next 5 or so years.

What I'd advise you and the OP is to make sure to buy an apartment that at least has the potential for that to be workable without moving.

Buying a tiny 400sqft apartment of the type you might rent as a single person presents a much bigger risk of having to sell (or worst case getting trapped there and miserable) then buying a comfortable 800sqft + 2 bed apartment where you could conceivably live comfortably with a partner and a young child. You might meet someone who has a house or is tied to a farm, or end up emigrating but the idea is to leave the most likely options open as much as possible because buying locks you in more then renting.

awec

You need to take into account that when it comes to getting a second mortgage the rental income for your first property may not be taken into account which would make a second mortgage virtually impossible.

Also I believe you would have to inform your mortgage lender of the change of status of your first property which will probably have implications on your interest rates (your payments would increase).