Is this viable? Apartment purchase in Dublin.

Hollister11

In a couple of years I'll be in a position to buy an apartment. I'll be 23/24. There are currently similar properties for sale that I'd like to buy. It's based in Dublin 13. A 2 bed for 185K.

It's beside a dart station. There's another fact station 15 minutes away, there's also 2 buses to town, and one to malahide. It's a quiet area. The apartment is 850sq ft.

If I had 25K saved as a deposit as a FTB on a 160K mortgage repayment would be the following.

750PM on a 30 year mortgage.
930PM on a 20 year mortgage.

If renting out a room for 500 pm (which is tax free) my mortgage would be very little.

Am I missing something, as it seems to good to be through.

CPTM

This is exactly what I did a few years ago when I was 25. I've no regrets. Only thing missing from your calculations is property tax and management fees..

As a side note, I would recommend a variable rate, it means you can repay extra to shorten the term of your mortgage. Not sure what line of business you're in, but if there's a high chance that in the next few years you'll be on a higher salary and same set of responsibilities (like no kids etc), you might want to consider it at least.

Hollister11

CPTM wrote: »

This is exactly what I did a few years ago when I was 25. I've no regrets. Only thing missing from your calculations is property tax and management fees..

As a side note, I would recommend a variable rate, it means you can repay extra to shorten the term of your mortgage. Not sure what line of business you're in, but if there's a high chance that in the next few years you'll be on a higher salary and same set of responsibilities (like no kids etc), you might want to consider it at least.

I don't know much about mortgages, so I'll have to do my research. Thanks.

I'll going to be in the tech industry as a developer. So jobs are plentiful and the chance of wages increasing is very likely.

dev100

Hollister11 wrote:

I don't know much about mortgages, so I'll have to do my research. Thanks.

Hollister11 wrote:

I'll going to be in the tech industry as a developer. So jobs are plentiful and the chance of wages increasing is very likely.

What's your salary expectation starting off ? Remember you will only get 3 1/2 times that of your salary . Do you live at home or you renting ? ie have you budgeted for living expenses household bills food insurance and running a car if needed, if you are out living on your own then you will already be aware of costs . Also you will need to show you are permanent in a job also . Have you started saving ? 25K is hard saved but it's good to start early fair play to ya

Eric Cartman

you are looking at needing a salary of approx 48k to make that purchase + deposit of 18k, you will need to show a savings record for at least a year, with the legal fees , stamp duty etc… id suggest having 25k in the bank minimum.

As a software dev with a degree , you'll likely start on 28-32k a year , start saving 1000 a month then, in 2 years time you'll have 24k saved for your deposit, the record the bank wants to see and with 2 years experience you may be able to talk your way into a job that pays near what you need,

Hollister11

Hollister11 wrote: »

If I had 25K saved as a deposit as a FTB on a 160K mortgage repayment would be the following.

750PM on a 30 year mortgage.
930PM on a 20 year mortgage.

If renting out a room for 500 pm (which is tax free) my mortgage would be very little.

Am I missing something, as it seems to good to be through.

Not too good to be true BUT youre young, you don't want to tie yourself up in debt now for most of your adult life.
Don't max out your repayment capability, get something where you have the capability of paying off extra and reducing future payments or loan length. This will give you head room in a few years when you might need it for other projects or stages in your life.

riclad

IF you want to buy anything ,you,ll need to have 20 per cent saved ,plus 3k approx for 1 per cent stamp duty, legal fees 1100euro aprox .
Unless you go for a new build apartment and use the new first time buyer,s grant from budget 2016.
go for a standard variable rate mortgage .
24 is not to young to buy ,you save on rental costs , you protect yourself against rising house
prices .

Ayuntamiento

Another question to consider is will the apartment still cost 185k in 2yrs time? Unfortunately you might find that prices go up faster than you can save and your saving period has to be extended out.
Still, it's a great thing to aspire to a goal like owning your own place and the savings will stand to you whatever you end up doing. Don't forget to have fun along the way as you'll never get to live your early 20s again!!

Hollister11

Ayuntamiento wrote: »

Another question to consider is will the apartment still cost 185k in 2yrs time? Unfortunately you might find that prices go up faster than you can save and your saving period has to be extended out.
Still, it's a great thing to aspire to a goal like owning your own place and the savings will stand to you whatever you end up doing. Don't forget to have fun along the way as you'll never get to live your early 20s again!!

I have some money from part time work. I'm starting an internship in February so I'll get a wage from that. I finish college in 2018. Hopefully save as much as possible, do some work on the side for extra money.

That's my I want my own place. To go out when ever I want without people texting every hour asking when I'm home.

ILikeBananas

Hollister11 wrote: »

That's my I want my own place. To go out when ever I want without people texting every hour asking when I'm home.

If that's your sole motivation then buying a house is kind of the nuclear option here.

It's a bit like getting a tattoo of the name of your favourite band. It might seem like a good idea right now as a way of showing your appreciation for them but there are simpler ways to achieve that goal without permanent long term affects.

Hollister11

ILikeBananas wrote: »

If that's your sole motivation then buying a house is kind of the nuclear option here.

It's a bit like getting a tattoo of the name of your favourite band. It might seem like a good idea right now as a way of showing your appreciation for them but there are simpler ways to achieve that goal without permanent long term affects.

I get on great with my parents and family, and I don't want to leave just yet (I'm 20), but I'd rather move out and gain independence at 24/25 than 28/29.

ILikeBananas

Hollister11 wrote: »

I get on great with my parents and family, and I don't want to leave just yet (I'm 20), but I'd rather move out and gain independence at 24/25 than 28/29.

but you can equally gain independence by renting as well.

Hollister11

ILikeBananas wrote: »

but you can equally gain independence by renting as well.

I don't fancy renting. I'd rather buy a cheap apartment, and pay the mortgage rather than rent.

ED E

Hollister11 wrote: »

I don't fancy renting. I'd rather buy a cheap apartment, and pay the mortgage rather than rent.

There are plenty of stories of CS grads who spent the first six months out working then fecked off to do something else as they hated it.

Making a 30yr commitment to one place while entering an industry that loves the 18mo/role model is a bit silly.

Hollister11

ED E wrote: »

There are plenty of stories of CS grads who spent the first six months out working then fecked off to do something else as they hated it.

Making a 30yr commitment to one place while entering an industry that loves the 18mo/role model is a bit silly.

I love programming, so I'm not going to feck off after 18 months.

Do you drive?

You really need to be flexible for the next couple of years to see where your permanent job is going to be. The apartment is next to a dart station, but what if the job you want is in Sandyford, Citywest, Blanchardstown, or Swords?

Hollister11

[Deleted User] wrote: »

Do you drive?

You really need to be flexible for the next couple of years to see where your permanent job is going to be. The apartment is next to a dart station, but what if the job you want is in Sandyford, Citywest, Blanchardstown, or Swords?

I will be driving in about 2 months. Public transport is very good in the area, so I can get to most places quite easily.

Ursus Horribilis

Are you sure you want to rent out a room in your apartment to a stranger? That can carry its own share of headaches.

Hollister11

Hollister11 wrote: »

Public transport is very good in the area, so I can get to most places quite easily.

Public transport is good? I thought you said this was in Dublin?

You kind of side stepped my question. What if you get a job in Sandyford? The apartment is in Dublin 13 and very near a Dart Station(Raheny?). How would you get to Sandyford from there, where-ever it is to Sandyford?

worded

If you wait until you can afford to buy accommodation or
Have a kid you will never be able to afford either. That's the advice i was given and it was correct in my case. I've both now and happy with decisions

It's good to have a goal. You can rent a room out for up to 12k pa tax free
Best of luck

Oh and get a 2 bed not a one bed imo

Small screen didn't read all posts

Stoner

Hollister11 wrote:

I don't fancy renting. I'd rather buy a cheap apartment, and pay the mortgage rather than rent.

I got my first place at 23 , before I had a car. Best move I ever did. At the time the repayments were 900 punts a month over 20 years. It helped me greatly by the time I was 28/29 and buying a place with the OH.

I sold that first property after a 20 months and bought another one and I'd made an impact on the mortgage.

Stoner

Stoner wrote: »

I got my first place at 23 , before I had a car. Best move I ever did. At the time the repayments were 900 punts a month over 20 years. It helped me greatly by the time I was 28/29 and buying a place with the OH.

I sold that first property after a 20 months and bought another one and I'd made an impact on the mortgage.

On one hand, since I was 23 I have lived in 11 different properties in 2 countries. I needed to be flexible for where work was. On the other hand, if I had accepted one of the many "Youve been pre-approved for a mortgage" letters back around 2006, I'd be 9 years into paying off my house by now. It really is a tricky one.

worded

You have youth on your side, don't be too tough on yourself for previous decisions

No future in the past ..

ILikeBananas

Deleted User wrote: »

On the other hand, if I had accepted one of the many "Youve been pre-approved for a mortgage" letters back around 2006, I'd be 9 years into paying off my house by now. It really is a tricky one.

If you'd bought a house in 2006 your 9 years of payments would probably still have you in negative equity.

worded wrote: »

If you wait until you can afford to buy accommodation or
Have a kid you will never be able to afford either. That's the advice i was given and it was correct in my case.

Not trying to be smart but since you chose one path you can't be certain where the other one would have led you to.


OP, you've got 2 years to think it over but it sounds like you've got your mind made up. Just make sure that if you do go ahead and buy a place that you'd be happy to live there in the long term. Dublin is full of people who are trapped in "starter" apartments that they bought before the crash with the intention of trading up at a later date in an ever increasing market.

Gumbo

riclad wrote: »

IF you want to buy anything ,you,ll need to have 20 per cent saved ,plus 3k approx for 1 per cent stamp duty, legal fees 1100euro aprox .
Unless you go for a new build apartment and use the new first time buyer,s grant from budget 2016.
go for a standard variable rate mortgage .
24 is not to young to buy ,you save on rental costs , you protect yourself against rising house
prices .

As a FTB won't he qualify for 10% deposit instead of 20%?
Also stamp duty on the 185 apartment is €1850.

Legal fees of approx €1500 also.

pilly

One thing to consider is how long do you want to rent out your second room for? You do get to an age when you want to live alone or with just a partner so plan on being able to afford the mortgage without a lodger if you can. Then anything you do get while you have a lodger is a bonus.

Ursus Horribilis

I'm not sure why you think this is too good to be through (sic). Yes, you'll be getting a foot onto the property ladder but it's not without its potential pitfalls. As I've mentioned already, you're budgeting for having a stranger on your floor. I can tell you, as someone who house shared for many years, that it's not always a holiday camp. If you're lucky, you'll get someone who'll be respectful of you and your property and cause you no problems. You'd be surprised how many uncivilized people there are out there. I've shared with them and so have my friends. People who'll not clean up after themselves, will damage your furniture and walls, play their music loud, hog the sofa and the TV and have their friends come over for hours. An apartment is a very small place sometimes.

Another thing you should be mindful of is who else is living in the area. I know of some fancy shmancy Celtic tiger apartment complexes that now have several apartments rented out to the more scumbaggy elements of society. It's madness to buy something just because you can afford it.

Stoner

I think he's stopped listening to us old bastaxxs!

Off having a chai latte somewhere !

Moonbeam

I bought a house slightly younger then that,at times I rented the spare room out to friends.
Start saving and see what happens,house prices will fluctuate.

Michael D Not Higgins

OP, from your other threads I've seen here, you're still a student. What would be viable would be finishing your studies and work at getting a good job. You're not going to be in a position to qualify for as high as loan as you're suggesting for a number of years so it shouldn't even be a worry for you yet.

Hollister11

Michael D Not Higgins wrote: »

OP, from your other threads I've seen here, you're still a student. What would be viable would be finishing your studies and work at getting a good job. You're not going to be in a position to qualify for as high as loan as you're suggesting for a number of years so it shouldn't even be a worry for you yet.

Yes I'm still in college. But I'll be finishing up In may 18 and hopefully after working for a year or 2 save up more than 10%, of a deposit and get a increase or 2 in wages to qualify for 3.5 mortgage

I know I won't be buying soon, but I want to have a plan so I can buy a house young enough.