Rent or Joint Buy in dublin!

jsull

Hi All,

My mates and I are looking to rent a 3 bed property in Dublin but are finding it pretty difficult to get a place. One of the lads said jokingly that we should buy a house between the 3 of us. I think it makes sense, with a few bob more you're paying something off instead of paying someone elses mortgage! So the search is on for a 3 bed gaf around the 450K mark. Can anyone suggest an area about 30mins from the city centre and that will hold/grow in value? There seems to be some reasonable price houses/apartments in finglas / meakstown but i'm unsure of this area. What do ye guys think about joint buying with 3 people in total, we're all good mates but as they say "3's a crowd"! Has anyone experience of such a venture?

Thanks in advance for yer thoughts on this one

J

The_Conductor

Personally I think you are being very optimistic expecting to buy property in Dublin and for the property to hold/grow in value in the short to medium term. I would not recommend doing so at present. The stamp duty issue is only for First Time Buyers- so when you try to offload your 450k house on the market at some future point in time- whoever is buying it would most likely get hit badly (over 30k). Add interest rates onto this- currently ECB base rates are 4%- and are expected to hit 4.5% before the end of the year, with further increases forecast for 2008- possibly another .5% (to 5%). You would be paying over 22k in mortgage interest on your 3 bed house- just to stand still- thats almost 2k per month. You would rent something very nice for 2k a month (and not have to worry about falling asset values......)

Do your research well before going down the road you are proposing. It sounds as though you want to get on the property ladder at any cost. The costs these days could be surprisingly high.......

Gurgle

I think its a silly idea.

Why?

Its not likely to be a long term arrangement.
You all want to live together right now, great.
What happens when one of you takes a job in Cork?
Decides its time to move in with a girlfriend?
Loses his job and can't pay his share?
Wants to go travelling for a year?
Gets married?

Renting the house out won't cover the mortgage.

So you'll be looking at selling up in a few years.
Even ignoring the fact that the mortgage will cost more than renting, how much will the house have to go up in value before you even cover the costs with the sale?

And then, when one of you wants to buy a home, you will have lost your FTB status so you'll be paying more in stamp duty.

Buying and selling houses is an expensive business. It doesn't make money unless property prices are soaring, and tbh I think the soaring is done.

jsull

Hi folks, thanks for the replies.

Yep, its a bit risky alright. We have discussed what would happen if someone loses / moves job etc. We were thinking to sign an agreement outlining all these possibilities expiring after 3 years and then sell or resign. I reckon if we buy in a good location we should be able to let it if our needs change or sell it easily at no loss. hmm I think im way over my head here.. Sounds like a big headache already so I think ye guys are right. I'll call into a mortgage broker and see what they think of this madness!

thanks again