Advise on buying apartment vs house

Thestones

PhoenixParker wrote: »

I would buy a 2 bed in which you could happily live with kids. Something in the 800sqft+ range with a small park within 500m.

Young kids don't need a garden and there's no need to subject yourself to a commute for years longer than necessary.

Young kids don't need a garden?..! Do you actually have children? Personally a garden is a must for kids, even a small one, they need outdoor space, it's not always practical to go to a park.

Mike3549

Thestones wrote: »

Young kids don't need a garden?..! Do you actually have children? Personally a garden is a must for kids, even a small one, they need outdoor space, it's not always practical to go to a park.

I have to agree and disagree with you. Id say a garden is a must for smaller children to play in sand pit etc, later they just go outside to play with their friends, ride bikes, scooters, rollerblades and so on... and then backgarden becomes just a storage for their stuff

dubrov

Mike3549 wrote:

I have to agree and disagree with you. Id say a garden is a must for smaller children to play in sand pit etc, later they just go outside to play with their friends, ride bikes, scooters, rollerblades and so on... and then backgarden becomes just a storage for their stuff

I'd agree with this although not a must . A garden is handy for young kids, say less than 6. After that they are nice for adults for bbqs, sitting out on a summer evening etc.

ebayissues

Need to bing this up as I have been thinking alot. 26yrs. deposit saed to buy an apartment. I'm single and I dont see that changing soon.


Hypothetically,if apartment costs 275k, this what my break down look like.

275,000 - (10%}27,500 = 247,500


30yr mortgage from ptsb= 1005 per month(could me more/less)



Add management fees or insurance of 75, so lets say 1080 per month. again(More or less)



My rent is 800 per month and currently saving 1,500.


If I purchase a 2 bed apartment and rent out one of the room for 750 per mont, I have to pay just 330
to pay the 1080.


Thefore my rent is halved and I save 420 per month.


Obviously there are lot of assumption in this, bt lets say 5yrs and somewhat flat market


Sell the apartment for 200,000



Mortgage left is 247.5k - (1080*12*5) = 188,720


Sell apartment for 200k 200,000 - 188,720 = 12,800

Savings =((420+1500)*12*5)) = 115,200



Now I have not taken cgt, estate agent fees, unoccupancy, house, slary increase, unexpected expenses, repairs, fixes etc. Lets take 25% of total savings - Looks like 80k - though bulk from savings(420 + 1500)



But are the figures able to make a case for buying an apartment?


An extreme scenario might be not able to sell the apartment which seems unlikely.


Thoughts????

daithiK1

Your mortgage left calculation is way off. You need to consider the interest rate

cloneslad

ebayissues wrote: »

Need to bing this up as I have been thinking alot. 26yrs. deposit saed to buy an apartment. I'm single and I dont see that changing soon.


Hypothetically,if apartment costs 275k, this what my break down look like.

275,000 - (10%}27,500 = 247,500


30yr mortgage from ptsb= 1005 per month(could me more/less)



Add management fees or insurance of 75, so lets say 1080 per month. again(More or less)



My rent is 800 per month and currently saving 1,500.


If I purchase a 2 bed apartment and rent out one of the room for 750 per mont, I have to pay just 330
to pay the 1080.


Thefore my rent is halved and I save 420 per month.


Obviously there are lot of assumption in this, bt lets say 5yrs and somewhat flat market


Sell the apartment for 200,000



Mortgage left is 247.5k - (1080*12*5) = 188,720


Sell apartment for 200k 200,000 - 188,720 = 12,800

Savings =((420+1500)*12*5)) = 115,200



Now I have not taken cgt, estate agent fees, unoccupancy, house, slary increase, unexpected expenses, repairs, fixes etc. Lets take 25% of total savings - Looks like 80k - though bulk from savings(420 + 1500)



But are the figures able to make a case for buying an apartment?


An extreme scenario might be not able to sell the apartment which seems unlikely.


Thoughts????

I can’t tell you if it’s a good or bad idea, just tpgiving you food for thought below.

PTSB mortgage rate on 90% mortgage is 3.2% fixed for five years (3.1% for 3) but I’m going with 5 years as that’s what you mentioned (even though Ulster bank have 2.6% for 4 years)

1. Payments at 3.2% over 30 years would be 1070.36
2. You counted your management fee in your mortgage payment calculation, though your monthly payment was too low in your calculations anyway so it’s not too far off.
3. Mortgage value - Monthly payments * 5 years does not equal what you have left on your mortgage at the end of 5 years.
4. The principal owed after 5 years at 3.2% payment would be €220,442
5. You won’t pay capital gains tax on your primary home.
6. Will you find a two bedroom apartment for €275k in good enough condition, in a decent enough area, to commands €750 per month rent?
7. Add another 5k or so to the 27,500 deposit for legal fees, stamp duty etc. PTSB are doing 2% cash back n what you borrow too, which would give you pretty much that €5k back a couple of weeks after you draw down.
7. Consider getting a mortgage over 25 years at a lower % - if you went with Ulster Bank you would get 2.6% and would only owe €209,958 after five years and you’d only be paying an extra €52 a month.

I hope this helps give you more information to help you with your decision.

JustMe,K

ebayissues wrote: »

Need to bing this up as I have been thinking alot. 26yrs. deposit saed to buy an apartment. I'm single and I dont see that changing soon.


Hypothetically,if apartment costs 275k, this what my break down look like.

275,000 - (10%}27,500 = 247,500


30yr mortgage from ptsb= 1005 per month(could me more/less)



Add management fees or insurance of 75, so lets say 1080 per month. again(More or less)



My rent is 800 per month and currently saving 1,500.


If I purchase a 2 bed apartment and rent out one of the room for 750 per mont, I have to pay just 330
to pay the 1080.


Thefore my rent is halved and I save 420 per month.


Obviously there are lot of assumption in this, bt lets say 5yrs and somewhat flat market


Sell the apartment for 200,000



Mortgage left is 247.5k - (1080*12*5) = 188,720


Sell apartment for 200k 200,000 - 188,720 = 12,800

Savings =((420+1500)*12*5)) = 115,200



Now I have not taken cgt, estate agent fees, unoccupancy, house, slary increase, unexpected expenses, repairs, fixes etc. Lets take 25% of total savings - Looks like 80k - though bulk from savings(420 + 1500)



But are the figures able to make a case for buying an apartment?


An extreme scenario might be not able to sell the apartment which seems unlikely.


Thoughts????

In the last recession a lot of people who did what you are suggesting were burned by it, and are stuck with those apartments.

Property is always going to sell, whether it will sell for what you want is a different thing. You need to have a plan for the possibility of the apartment being worth half what you paid for it (unlikely, but we thought that last time round). You have not factored in a partner, or potentially children either and just because you are not planning it now doesn't mean it wont happen.

Personally, I would still keep saving and buy a house or a 3 bed apartment rather than a 2 bed, you can still rent out a room but at least its more future proof.