Am I oversimplifying this? (buying an apartment)

dubliner999

I'll try to make this as short as possible. I'm in a bit of an odd situation. I'm in my 20s and have got to a stage where I have a decent deposit saved up, along with some investments in cryptocurrency which I want to keep for the time being as I believe it'll be worth x5 what it currently is in the next few years (it was worth that 6 months ago by the way, so I'm not just daydreaming).

I have an idea at the moment which is:

- Get a 2 bed (or possibly 3 bed if I'm very lucky) apartment just outside the city (less than 15km away) for around 260k.

- The mortgage on this works out at about 1,000 per month, which I reckon I could afford on my current salary. Obviously there's other costs associated with owning property though, I still need to work out how much more money i'd need for heating, electricity and so on.

- I could rent 1 room (or 2 if I get very lucky as i mentioned above) for around 600 per month, meaning that a good portion of the mortgage would be paid off. Along with this, it'd help having someone else to pay some of the costs like heating etc. From what I've read online 14k is tax free if you're renting a room in the place where you live so obviously i'd be well under that.


There's a few things that are putting a bit of doubt in my head over this idea though:

1) Am I oversimplifying the whole renting a room out thing? Surely I'd be able to find someone decent to rent out a room? I reckon I could just about afford a 2 bed without getting someone else to rent but it'd make things a lot, lot easier to afford and would make me less worried about keeping up with mortgage payments.

2) (back to the odd situation part) Maybe I'd be better off waiting it out until I can sell my cryptocurrency for more, therefore meaning less of a mortgage but obviously this isn't guaranteed.

4ensic15

Have you lived in shared rented accommodation before?

dennyk

If you're renting an apartment, don't forget to factor in management fees, property tax, and the increased insurance cost (it'll be a bit more expensive than your renter's insurance since it'll cover certain parts of the structure as well). These won't be huge, but they can add up.

Gumbo

€600 plus bills...would this be the norm?

Gumbo

dennyk wrote: »

If you're renting an apartment, don't forget to factor in management fees, property tax, and the increased insurance cost (it'll be a bit more expensive than your renter's insurance since it'll cover certain parts of the structure as well). These won't be huge, but they can add up.

Block/structure insurance will be covered under the management fee. OP will only need to worry about contents insurance.

4ensic15

kceire wrote: »

€600 plus bills...would this be the norm?

Depends on location and the quality of the accommodation. €800+ is being asked in D4/D6 and the posher areas of Sth County Dublin. Would be less in West Dublin.

bleary

260=26k + borrow 234k

Have you saved 26k? 10% deposit
Are you earning 67k in base salary. 234/3.5
Have you saved over 1100 a month for last few months or paid equiv rent
Do you think your circumstances will change in the next 3-5 years. Travel, study , kids
Is your job likely to be secure over the next 3-5 years.
Could you afford interest rates increasing by a couple of percent

dennyk

kceire wrote: »

Block/structure insurance will be covered under the management fee. OP will only need to worry about contents insurance.

Right, but he'll need more contents insurance coverage to cover his furnishings and white goods and such that would be the landlord's problem in a rental. Also, I'm not sure if the block insurance covers interior finishings around here, does it? I know back in the US such policies would generally only cover the building structure itself and the exterior (roof, siding, etc.) and common areas; everything "studs-in" (wiring, plumbing, drywall, paint, carpet/flooring, windows, fixtures, etc.) within a unit was the responsibility of the unit owner and so you'd need your homeowner's insurance policy to cover the replacement of all of that stuff as well, which generally made those policies a bit more expensive than a true "contents-only" rental insurance policy.

Samuel T. Cogley

kceire wrote: »

€600 plus bills...would this be the norm?

550 + (some) Bills here in Kilbarrack so I assume it is.

dubliner999

dennyk wrote: »

If you're renting an apartment, don't forget to factor in management fees, property tax, and the increased insurance cost (it'll be a bit more expensive than your renter's insurance since it'll cover certain parts of the structure as well). These won't be huge, but they can add up.

Very true. This is what I need to get an idea of to see how affordable it'll be.

dubliner999

4ensic15 wrote: »

Have you lived in shared rented accommodation before?

No, been living with the parents all along.

dubliner999

kceire wrote: »

€600 plus bills...would this be the norm?

Just outside the city, I reckon I could even get a bit more to be honest with you? Within 10km or 15km from the city. (North side)

dubliner999

bleary wrote: »

260=26k + borrow 234k

Have you saved 26k? 10% deposit
Are you earning 67k in base salary. 234/3.5
Have you saved over 1100 a month for last few months or paid equiv rent
Do you think your circumstances will change in the next 3-5 years. Travel, study , kids
Is your job likely to be secure over the next 3-5 years.
Could you afford interest rates increasing by a couple of percent

I've got 50k plus saved.

I'm not earning 67k (just under 50k actually) but with the rebuilding Ireland scheme I could be able to borrow enough to buy a property like I mentioned in the op.

Can't see a whole lot changing over the next 3 to 5 years to be honest. My job is relatively secure.

No worries about rates increasing with rebuilding Ireland so that should be fine.

bmm

You would see more capital appreciation in an old 2 bed terrace house. You could spend a few quid improving it in the next few years. Mgt fees are wasted cash! 30k in 10 years!

Don’t wait for cryptocurrency !!

markpb

bmm wrote: »

Mgt fees are wasted cash! 30k in 10 years!

That's a little glib. If the OP doesn't pay management fees, they'll still have to pay insurance, bins, maintenance, etc. They just won't be contributing to the costs of the upkeep of any common areas or company costs.

Also, a two bed apartment is more likely to attract of between 1,000 and 1,500 per year. It would be uncommon to pay the 3k you're suggesting.

EvolvedApe

dubliner999 wrote: »

along with some investments in cryptocurrency which I want to keep for the time being as I believe it'll be worth x5 what it currently is in the next few years.

This made me laugh.

dubliner999

bmm wrote: »

You would see more capital appreciation in an old 2 bed terrace house. You could spend a few quid improving it in the next few years. Mgt fees are wasted cash! 30k in 10 years!

Don’t wait for cryptocurrency !!

I couldn't really afford a half decent house that's close to the city on my budget though. But I know what you mean.

dubliner999

markpb wrote: »

bmm wrote: »

Mgt fees are wasted cash! 30k in 10 years!

That's a little glib. If the OP doesn't pay management fees, they'll still have to pay insurance, bins, maintenance, etc. They just won't be contributing to the costs of the upkeep of any common areas or company costs.

Also, a two bed apartment is more likely to attract of between 1,000 and 1,500 per year. It would be uncommon to pay the 3k you're suggesting.

True. It wouldn't be anywhere near 3k. Would insurance usually be covered in the maintainance fees? I'm unaware what's usually covered.

As I mentioned before I need to work out rough estimates of electricity for a 2 bed, general repairs etc that would be needed.

dubliner999

EvolvedApe wrote: »

dubliner999 wrote: »

along with some investments in cryptocurrency which I want to keep for the time being as I believe it'll be worth x5 what it currently is in the next few years.

This made me laugh.

I understand how some people would laugh at that. But I know a good bit about it and genuinely believe it'll happen. I'll gladly PM you more info if you want and we'll see who's right in a few years.

EvolvedApe

dubliner999 wrote: »

I understand how some people would laugh at that. But I know a good bit about it and genuinely believe it'll happen. I'll gladly PM you more info if you want and we'll see who's right in a few years.

Yeah do PM me Dubliner.

Im heavily invested in Crypto myself. We can compare notes.

Let me know what you are holding.

LiamoSail

If you've 50k saved, you're still going to need a mortgage of around 215k, given stamp duty, solicitor fee etc

Issue is you earn around 50k, so you can only borrow 150k

dubliner999

LiamoSail wrote: »

If you've 50k saved, you're still going to need a mortgage of around 215k, given stamp duty, solicitor fee etc

Issue is you earn around 50k, so you can only borrow 150k

Not under the rebuilding Ireland scheme like I mentioned a few posts back. I can get close to 220k with that.

markpb

dubliner999 wrote: »

True. It wouldn't be anywhere near 3k. Would insurance usually be covered in the maintainance fees? I'm unaware what's usually covered.

The insurance part of your management fee covers block or structural insurance, ie the cost of rebuilding it in the event of a fire or other major incident. It does not cover your contents (although it may cover wooden floors and some fittings depending on the policy). It also does not cover landlord insurance which some landlords take out.

It usually covers all your waste bills, all the running costs of the common areas (indoor and outdoor) including lighting, cleaning, repairs and maintenance, upkeep of the fire detection systems, maintenance of the water storage system, repainting of the outer walls and cleaning of windows above the ground floor. It should also cover any upkeep needed to the doors (your front door) and windows including their eventual replacement.

That leaves you buying your appliances and furniture, painting your inside walls and paying for contents insurance and utility bills and any repairs needed to your heating system. Apart from your heating system, there'll be little to no maintenance costs.

The day to day utility bills will vary depending on the apartment. I've lived in some which weren't great and others which were so well built that cooling was more of a problem than heating. In general, they're warmer than houses because you're surrounded by other apartments. Noise can be an issue, that will depend on the build quality and your neighbours.

dubliner999

markpb wrote: »

dubliner999 wrote: »

True. It wouldn't be anywhere near 3k. Would insurance usually be covered in the maintainance fees? I'm unaware what's usually covered.

The insurance part of your management fee covers block or structural insurance, ie the cost of rebuilding it in the event of a fire or other major incident. It does not cover your contents (although it may cover wooden floors and some fittings depending on the policy). It also does not cover landlord insurance which some landlords take out.

It usually covers all your waste bills, all the running costs of the common areas (indoor and outdoor) including lighting, cleaning, repairs and maintenance, upkeep of the fire detection systems, maintenance of the water storage system, repainting of the outer walls and cleaning of windows above the ground floor. It should also cover any upkeep needed to the doors (your front door) and windows including their eventual replacement.

That leaves you buying your appliances and furniture, painting your inside walls and paying for contents insurance and utility bills and any repairs needed to your heating system. Apart from your heating system, there'll be little to no maintenance costs.

The day to day utility bills will vary depending on the apartment. I've lived in some which weren't great and others which were so well built that cooling was more of a problem than heating. In general, they're warmer than houses because you're surrounded by other apartments. Noise can be an issue, that will depend on the build quality and your neighbours.

Great info, thanks.

I'd want to be getting an apartment with a good BER rating (B to C). I wonder how far I'm off here (per month) :

Mortgage: €1,000
Management: €100
Heating: €100
Elextricity: €150 (?)
Internet: €50

Totals up to €1,300 a month cost wise.

JustJoe7240

For the love of god don't borrow based on some crypto investments, coming from someone also involved, consider them what they are,a punt!

markpb

dubliner999 wrote: »

Mortgage: €1,000
Management: €100
Heating: €100
Elextricity: €150 (?)
Internet: €50.

Heating and electricity should be far less than that. I'm (level) paying 60 for electricity and 70 for gas every two months for a three bed house. A two bed apartment should be far less.

Internet and TV is around 110 every two months depending on the package you go for.

You'll need some money at the start for a bed and sheets, a sofa, kitchen table and chairs, TV, hoover, kitchen things like plates, cups, etc. An apartment will usually come with a fridge, oven and possibly a microwave but that will depend on the seller.

dubliner999

JustJoe7240 wrote: »

For the love of god don't borrow based on some crypto investments, coming from someone also involved, consider them what they are,a punt!

I'm definitely not! I have it as money on the side. If the worst comes to the worst I'll sell it all but I try to pretend that I don't even own any cryptocurrency.

dubliner999

markpb wrote: »

Heating and electricity should be far less than that. I'm (level) paying 60 for electricity and 70 for gas every two months for a three bed house. A two bed apartment should be far less.

Internet and TV is around 110 every two months depending on the package you go for.

You'll need some money at the start for a bed and sheets, a sofa, kitchen table and chairs, TV, hoover, kitchen things like plates, cups, etc. An apartment will usually come with a fridge, oven and possibly a microwave but that will depend on the seller.

Cheers thanks. Sounds like I could afford a mortgage of 1k a month then, especially if I get someone to rent a room.

allym

If you’re earning 50k you won’t qualify for the rebuilding Ireland scheme. As far as I’m aware you have to be earning less than 40k as a single applicant and 75k as a couple.

I haven’t looked that much into it but I know that we don’t qualify as we earn above 75k jointly.

Edit: you also have to be refused by several banks. There’s a few threads on it here

dubliner999

allym wrote: »

If you’re earning 50k you won’t qualify for the rebuilding Ireland scheme. As far as I’m aware you have to be earning less than 40k as a single applicant and 75k as a couple.

I haven’t looked that much into it but I know that we don’t qualify as we earn above 75k jointly.

Edit: you also have to be refused by several banks. There’s a few threads on it here

It's 50k for a single applicant. I'm on under that so it should be fine.

Also I know about the rejections, I could also get that I'd say.

mea_k

Did you read Re-Build Ireland website?
How you can secure mortgage with them is if you do have refusals from other banks. Meaning you wont get refusal perse but will get offer of less mortgage ...