What would you do?

madethisup2017

when in doubt, go to the strangers on th internet for advice. PLEASE NOTE THIS IS A LONG POST.

Currently my girlfriend and I are paying approx €19,000 a year in rent, we have been for a year or so and it looks like we will for at least another 5-6, though it could be more if the rental market gets worse.

We have about €70k in savings, no loans /credit cards / debts of any sort. We have a combined gross income of about €110k per year. We have no kids and they aren't in our plans...ever.

While we would both ideally love to live in Dublin for the rest of our lives, we can't see this happening due to the price of housing right now. The current plan is to buy / build down the country in about 5-6 years.

Should we stay in Dublin another 5 -6 years and continue paying the current rental price we will spend more than 100k in rent (net of our salary too).

I wouldn't mind looking into purchasing a property (apartment) for about €200k, this could most likely get us a 2 bed in the northside close enough to the dart (where we live). If we took out a 30 year mortgage for 130k we could be paying back less than €600 a month (using 3.3% interest rate from pepper money website). Which would be €7,200 per year, add in another €4,000 (estimate figure) for insurance, appliance breakdowns, service charges etc we would still be able to cut our costs by 8k a year. I would save the money we are not spending on rent and use this to overpay the mortgage after the fixed rate term is up.

We would also have the choice of renting a room to someone and getting up to 14k per year tax free. Even charging €500 per month would net us €6k per year to add to our savings.

We would obviously have the option of taking a 10-15 year term out but going 25-30 allows us to save and overpay when we can rather than still pay the large amount per month.

There is also the chance that the art,ent price will drop out of the sky in a number of years, but if it's in a decent area, close to commuting options, there's not much it could fall by, and I would also look at property registry over the last 10 years for the cost of houses / part,ends in the area.

So, strangers of boards.ie would you continue renting or would you purchase an apartment?

listermint

You have a large deposit and large salarys

Im not sure if this post is a joke thread or....

Actually just saw the username

Cocobongo

Whats the point of giving this money away really... you will pay the interest kn the morgage, but at least the money will go towards yours pocket rather than some landlord

bmwguy

Buy a house, not an apartment. You have purchasing power to go above 400k.
Live in it, and then see what the future holds with the house down the country.

madethisup2017

Sorry, I should say this post is not taking the pi$$, I use boards all the time but went with a private name for this as I didn't want people to know my financial affairs.

The reason I'm looking at an apartment rather than a house is that I could get a decent apartment in a nice area, 400k on a house leaves me with a large mortgage and not in an area I like.

I don't like the idea of a starter home. I could pay 400k for a house that pot ntually loses 100k in value. This apartment would not so much be a long terminvestment as it would be a 'this will save me money for a few years and if I can get close to the amount I paid for it then I'll have done okay'.

listermint

What house it's losing 100k in its value...


And when


Your don't like the idea of a starter house but your buying a starter apartment....

madethisup2017

listermint wrote: »

What house it's losing 100k in its value...


And when


Your don't like the idea of a starter house but your buying a starter apartment....

Loads of houses that were bought in 2006 and 2007.

This isn't a 'starter apartment' I'm not doing this with the intention to make money off the purchase as many did with 'starter homes'. Even if the apartment lost 10% of its value over the next 5 years it would be better than renting at my current rate. I don't need a house, there are only two of us. Placing such a large amount of equity into a house I don't want / need isn't something I want to do.

I don't want to derail the thread from its objective, I'm not interested in spending 400k despite it being within our approval rate

SimpleDimples

Have you considered buying the house now in an area you do want to live in long term and renting it out until you move there?

madethisup2017

SimpleDimples wrote: »

Have you considered buying the house now in an area you do want to live in long term and renting it out until you move there?

Ideally we would want to build there and it would be on my girlfriends land, we would struggle to get enough rent to cover the costs. on a costs basis it wouldn't make Financial sense for us to still be paying large rent up here and possibly supplementing the mortgage costs of a house down there.

We want to live close to mortgage free once we move down there, that way we don't need to worry so much about earning large salaries, to do this we need to stay in dublin for 4-5 more years and I'm throwing this up on boards to get as much criticism as possible to make sure I'm not looking at my options too simply.

Also, finding an apartment for 200k -225k in a desireabke area may not even be possible.

LirW

Note that the asking price is only asking price. 2 bedroom apartments along the Dart line are very sought after. It's more than likely you won't get away with only that.
Do you mind me asking what areas you're thinking about and what areas you could see yourself in long-term?
I appreciate your trail of thoughts but note that building a house down the country will also leave you with a large mortgage. It'll come down to that, no matter what.
I think you should find out what you truly can afford, especially if the both of you would like to live in Dublin.

Also for a mortgage of 130k it probably makes sense taking it our for a shorter term because the difference in interest you'll pay is huge.

madethisup2017

LirW wrote: »

Note that the asking price is only asking price. 2 bedroom apartments along the Dart line are very sought after. It's more than likely you won't get away with only that.
Do you mind me asking what areas you're thinking about and what areas you could see yourself in long-term?
I appreciate your trail of thoughts but note that building a house down the country will also leave you with a large mortgage. It'll come down to that, no matter what.
I think you should find out what you truly can afford, especially if the both of you would like to live in Dublin.

Also for a mortgage of 130k it probably makes sense taking it our for a shorter term because the difference in interest you'll pay is huge.

Yeah, I know they'll go higher than they are advertised. I won't rush into it though, thinking of starting to properly look in a few months while keeping an eye on prices in the meantime and then actively bidding etc in th new year.

I'm not looking at somewhere that is right next to the dart, we currently live a 10 minute drive to Raheny dart station and its grand. We could buy here for less than 200k but we most likely wouldn't want to.

Honestly. Anywhere from Fairview right out to donabate would be consiðered. Living in Clontarf / Fairview /. Raheny / malahide / howth / Sutton wouldn't be feasible for the budget but living close by might.

We would budget about 220-250 on a house where we want to build. We don't want children so it doesn't need to be huge. Should we buy an apartment in Dublin and stop paying as much rent I would see our savings sitting anywhere from 180k upwards in 5 years. If we have to keep paying large rent it will probably be anywhere from 150-180k. So while we would need a mortgage it would be much smaller.

Getting a mortgage over a shorter period is much less interest if I actually paid back over 25-30 years but I would look at making overpayments outside of the fixed term periods, this would allow us to make smaller regular monthly contributions which would be good should one of us become unemployed, while also having the flexibility to wipe out a large amount of interest every few years with the overpayment. We would probably look to, have it all paid off in 10-12 years should we not sell up before then......I think this makes sense but I'm open to ridicule on that.

PhoenixParker

You both ideally want to live in Dublin for the rest of your lives and you never want kids.

So spend a bit more and buy a decent big apartment that you can live in long term.

spaceHopper

Factory in cost of computing will only go up the wear and tear on both of you. What if you get bad neighboursneighbour in apparent what if you buy a fire trap.... you have to live some where forget about the investment where do you want to live.

madethisup2017

PhoenixParker wrote: »

You both ideally want to live in Dublin for the rest of your lives and you never want kids.

So spend a bit more and buy a decent big apartment that you can live in long term.

If I could afford to live in Dublin I would but I'm not going to spend the rest of my life worrying about a mortgage so that I can sell the house and have money when I retire. I don't want to live in an apartment forever either, I like having a garden, family near by etc, something neither of us have in Dublin.

I want to have money while I am young enough to do stuff with it and my hope is to have that by the time I'm 45-50.

madethisup2017

spaceHopper wrote: »

Factory in cost of computing will only go up the wear and tear on both of you. What if you get bad neighboursneighbour in apparent what if you buy a fire trap.... you have to live some where forget about the investment where do you want to live.

I currently travel the m50 everyday, ideally I would work in town (actually have a job offer for somewhere right beside a dart station). My girlfriend does a ten min drive to Raheny and a 30 minute dart trip each morning and evening too.

I won't go further out than donabate for the reason you mentioned, I don't want to be unhappy for the next five years.

I am involved in sports clubs in the north side, that's why I want to stay in the area. I am ideally looking to buy somewhere near to where we've lived for the past 8 years. Firetrap / neighbours, these are all something I'd worry about. More so the firetrap than the neighbiurs to be honest.

LirW

Once you apply for a mortgage the bank closely monitors what you could afford as a maximum and stress tests this in case interest rates go up.
You could very well afford living in Dublin taking out a conservative mortgage, you probably choose not to, which is entirely up to yourself. Building a house in the countryside is going to cost you a good bit as well, factor in the cost of commuting which you won't get rid of once you move out. Commuting isn't cheap and puts anything between 3-5k per person on top of your mortgage once you both decide to commute.
I don't know from where you want to commute in the end but if you look up the tax saver ticket from the nearest train stop, it'll give you a good number of how much it'll cost you per month to commute, car is most likely even more expensive (a optimistic estimate is 45c/km including wear and tear, petrol, taxes).
In your case I'd really carefully consider all the ups and downs of your next steps because you want a certain standard and you'll probably pay a lot more for it than you might think you will. Also depending on how long the mortgage is, it's not said that you made any kind of equity 4 - 5 years down the line. It seriously seems a bit like a celtic tiger-like risky move.

You're eyeing the most expensive areas on the north side really. There are corners of Kilbarrack that are basically Raheny and very nice neighborhoods that go for a lot less than Raheny itself. Marino is gorgeous too. There are plenty of nice and well-connected areas that are very well affordable.


EDIT: Maybe talk to a broker, they can advise you what you currently could borrow and I'd go from there. You can even apply for a mortgage, you don't have to draw down. If there are any open viewings that interest you, go to them, you only really get a feel of what you really want when you're actually seeing places. We had to view the likes of almost 30 places before we placed our first ever bid because we needed to find out what we really need. We viewed everything, from the worst areas on the north side to very fine new developments.

madethisup2017

LirW wrote: »

Once you apply for a mortgage the bank closely monitors what you could afford as a maximum and stress tests this in case interest rates go up.
You could very well afford living in Dublin taking out a conservative mortgage, you probably choose not to, which is entirely up to yourself. Building a house in the countryside is going to cost you a good bit as well, factor in the cost of commuting which you won't get rid of once you move out. Commuting isn't cheap and puts anything between 3-5k per person on top of your mortgage once you both decide to commute.
I don't know from where you want to commute in the end but if you look up the tax saver ticket from the nearest train stop, it'll give you a good number of how much it'll cost you per month to commute, car is most likely even more expensive (a optimistic estimate is 45c/km including wear and tear, petrol, taxes).
In your case I'd really carefully consider all the ups and downs of your next steps because you want a certain standard and you'll probably pay a lot more for it than you might think you will. Also depending on how long the mortgage is, it's not said that you made any kind of equity 4 - 5 years down the line. It seriously seems a bit like a celtic tiger-like risky move.

You're eyeing the most expensive areas on the north side really. There are corners of Kilbarrack that are basically Raheny and very nice neighborhoods that go for a lot less than Raheny itself. Marino is gorgeous too. There are plenty of nice and well-connected areas that are very well affordable.


EDIT: Maybe talk to a broker, they can advise you what you currently could borrow and I'd go from there. You can even apply for a mortgage, you don't have to draw down. If there are any open viewings that interest you, go to them, you only really get a feel of what you really want when you're actually seeing places. We had to view the likes of almost 30 places before we placed our first ever bid because we needed to find out what we really need. We viewed everything, from the worst areas on the north side to very fine new developments.

Thanks for the feedback, it's great to get the perspective from other people. I don't think we'll be able to afford anywhere in Raheny or Clontarf etc for that budget but I'd imagine we'd be looking more towards areas you mentioned, maybe bayside / baldoyle / donaghmede / clongrifin / the coast development / donabate area / areas within 10 mins drive to a dart station or on a good bus route etc

This purchase wouldn't be about turning a profit in the apartment so much as not paying 100-200k in rent over the next 5-10 years. Even losing 10-20% of the value (I'm incredibly negative) would still make it worthwhile.

You hit the nail on the head with the affording a mortgage in a house in Dublin versus wanting to pay for one. I don't want to pay 400-600k for a house, I just can't justify it. Not having or wanting children means getting an apartment I could live in even in 10 years if I wanted to stay in Dublin, would be fine for us.

I should clarify that when I move down towards my girlfriend's home we will not be commuting to Dublin, she has a qualification that would get heir a job in any town / city, the salary would be less than she might get in Dublin but having a small mortgage makes that okay. I might end up commuting 30-45 mins for a job but that's no problem, I'd pretty much do that wherever I go.

LirW

Also what came to my mind, how about looking at 2 bedroom houses? There is a number of 2 bed ex-council houses out there, they have a nice size and you won't pay a management fee like you'd do with all the apartments.

traveller0101

If you don't want kids and don't want to commute.. use your 70k (or wait til you have 80% deposit) on a ~400k apartment and get a mortgage of ~320k. You'll have much lower repayments than you have now and you'll have a good quality of life.

madethisup2017

LirW wrote: »

Also what came to my mind, how about looking at 2 bedroom houses? There is a number of 2 bed ex-council houses out there, they have a nice size and you won't pay a management fee like you'd do with all the apartments.

They are in the mix too, depending on the area. I keep saying apartments because they're mostly what I can get for the budget in areas of choice.

madethisup2017

traveller0101 wrote: »

If you don't want kids and don't want to commute.. use your 70k (or wait til you have 80% deposit) on a ~400k apartment and get a mortgage of ~320k. You'll have much lower repayments than you have now and you'll have a good quality of life.

I'm assuming you mean 20% deposit.

I don't want to spend 400k on somewhere to live. I'm just not going to do it, whether it's an apartment in Dublin or a 6 bedroom house in the country. I want to enjoy my income while I'm young enough to do it (I'm 33 now).

I also don't want to worry about losing my job / getting sick etc and not being able to afford the repayments

LirW

You can also keep an eye on Northwood in Santry, it's affordable, the apartments are nice, you have the shopping centre around the corner and you're in the Raheny area within a short drive and there are a few bus routes that operate into town.
I know your budget is very ambitious for something nice in Dublin, more so for your areas of choice. Again, go to open viewings, as many as you can, it'll show you a lot of what you like and dislike. They are also very anonymous really, so there is usually no pressure or anything. It's also good to see the kind of attention different properties get.

LionelNashe

Would you consider north city-centre? Dublin 1 is underpriced compared to other areas, in my opinion. That would leave you with maximum access to commuting options, or walk-to-work options, for anywhere you worked in the future.

An important consideration in my mind is to check the health of the management company accounts. Make sure that the other apartment owners are mostly paying their management fees and the common areas are being looked after. This will have an impact on resale value.

madethisup2017

LirW wrote: »

You can also keep an eye on Northwood in Santry, it's affordable, the apartments are nice, you have the shopping centre around the corner and you're in the Raheny area within a short drive and there are a few bus routes that operate into town.
I know your budget is very ambitious for something nice in Dublin, more so for your areas of choice. Again, go to open viewings, as many as you can, it'll show you a lot of what you like and dislike. They are also very anonymous really, so there is usually no pressure or anything. It's also good to see the kind of attention different properties get.

That's actually somewhere we had looked at renting, I think it's a 20-30 minute drive in the morning to Raheny though, which to be honest isn't thaaaat bad.

We'll have to go to some open viewings to see what places are like - size wise - some photos are incredibly deceptive.

madethisup2017

LionelNashe wrote: »

Would you consider north city-centre? Dublin 1 is underpriced compared to other areas, in my opinion. That would leave you with maximum access to commuting options, or walk-to-work options, for anywhere you worked in the future.

An important consideration in my mind is to check the health of the management company accounts. Make sure that the other apartment owners are mostly paying their management fees and the common areas are being looked after. This will have an impact on resale value.

Neither of use would like to live in Dublin 1, not so much because of the name it has, more so the noise levels, traffic, lack of parking etc. Neither of us are big drinkers so we don't go out a whole pile, when we do I drive in and out.

Thanks for the tip on the management company accounts, these type of things are helpful to be told to check out.

LirW

Can just tell you from my personal experience: We went to view a house that looked grand on the pictures and I found another in the area that was on the market for a good while and just made a viewing for the second because I was around anyway, for the craic.
The original house was a big disappointment and we ended up buying the second house, that we never even considered because it looked horrible on the pictures.
I think at the point I went sale agreed I've seen every showhouse in the greater Dublin area, and knew pretty much every agent.
It really is a big learning curve for one, it puts your expectations regarding budget right, shows you areas that you want or don't wanna be in.

LionelNashe

madethisup2017 wrote: »

Neither of use would like to live in Dublin 1, not so much because of the name it has, more so the noise levels, traffic, lack of parking etc. Neither of us are big drinkers so we don't go out a whole pile, when we do I drive in and out.

Thanks for the tip on the management company accounts, these type of things are helpful to be told to check out.

off-topic: (re: noise, you might have a point. A coach that was picking up from Croker today was running and revving his engine for about 30 minutes 6 feet from my window. I don't know why they do it. I think it's a 'hurry up' signal for their passengers. I'd like to find out where they live and return the favour.)

madethisup2017

LionelNashe wrote: »

off-topic: (re: noise, you might have a point. A coach that was picking up from Croker today was running and revving his engine for about 30 minutes 6 feet from my window. I don't know why they do it. I think it's a 'hurry up' signal for their passengers. I'd like to find out where they live and return the favour.)

Used to live on the Richmond road, match days were $hit craic. You can't go anywhere without worrying about what time you come back because traffic will be a nightmare.

We actually don't go into town often, we'd be more inclined to go to how they/ malahide / swords for our shopping so city centre is wasted on us. We'd only go in for meals every now and then.

madethisup2017

LirW wrote: »

Can just tell you from my personal experience: We went to view a house that looked grand on the pictures and I found another in the area that was on the market for a good while and just made a viewing for the second because I was around anyway, for the craic.
The original house was a big disappointment and we ended up buying the second house, that we never even considered because it looked horrible on the pictures.
I think at the point I went sale agreed I've seen every showhouse in the greater Dublin area, and knew pretty much every agent.
It really is a big learning curve for one, it puts your expectations regarding budget right, shows you areas that you want or don't wanna be in.

We ended up renting an apartment that looked crap in the photos online, we only went to view it because we had nothing else to do (we're that boring) and it was in a nice area. Thankfully the owners can't take good photos so there wasn't as much competition for the place.

LirW

It'll also make a big difference if you want a place in turn-key condition. People pay huge premiums for it. If you're willing to do a bit DIY you can save a few quid, if lucky.

messy tessy

Just curious - have you considered making the move now down to your gf's place / land where you will see yourself living long term, rather than waiting 5 years? Ye have a sizeable deposit saved and even if your salary took a hit with the new jobs I imagine the banks would see you as strong candidates.

If it was me in your situation I'd probably get out of Dublin now.