Questions for property gurus on here

ChunkyLover69

Hi all,

From reading through the threads here, it is obvious there are quite a few people here who know a lot more about the property market than I do.
So I'm hoping you'll be able to give me advise/thoughts about my current situation.

This is it.

A few years ago I bought a house in a suburb of north county Dublin. (Foolishly enough as all my friends live on the southside and reasonably close to the city). I coudn't afford to buy in that area and kinda got caught up in the whole "you have to buy" mentality of the time.
Lived in the house I purchased for a few months - but it was quite lonely and I realised I wasn't ready for suburbia (although the house was in a nice settled well-established estate and not a bad place at all)
So I moved out and rented it out. I've been lucky enough to have extremely good tenants who have taken great care of the place - that said while they were there I have invested considerably in upgrading the house (new bathroom, double glazed windows, boiler etc)
Now the value of this property has decreased considerably since the madness that was the peak of the property market. I am probably not in negative equity yet - although not too far off it. However, if I were to sell now I would lose out all I have invested in the property.

Meanwhile I have been renting a room close to the city on the southside - and to be honest I've gotten to the stage where I am really tired of the vagaries of living with other randomers (I'm currently living with three other people who are all very nice - but all of their individual personality quirks are beginning to get to me)

I would really like to buy my own place in an area I would like to live in - and it seems that, with the recent fall in house prices it is actually a possibility for me.

I am seriously considering buying another house.
However, I don't want to rush into it (as I did a few years ago) and would be interested to get an educated opinion on the following 2 questions:

House I currently own: My thinking at the moment is look at this as a long term investment. Rent is paying the mortgage. Keep it rented out for the next 5 - 10 years. The property market may or may not turn - but my mortgage will slowly decrease and eventually I will hopefully get a return on investment on it. Is this a sound idea or should I sell now and get out while I can?

House I would hope to buy: I have been keeping an eye on property in the area I would like to buy in. A good few houses are being sold and I'm wondering if the bottom has hit in this particular area? Bear in mind here I am looking at established estates - where the sales are generally a result of executors sales or people moving on. There wouldn't really be any new estates with tons of empty houses in the area I am looking in. So is now a good time to buy or should I hold on and continue renting - with all the hassles that entails!!

Any opinions anyone has would be greatly appreciated.

Thanks!

silverside

to be blunt

you would be stupid to buy a second house in a falling market

sell the one on the northside, then and only then buy one on the southside if you can afford to; if you can hang on renting for a year or two after sale then you'll get a nicer house.

or else stick with the status quo, but you probably wont be happy doing that.

gurramok

About mortgage slowly decreasing after time. That means less mortgage interest been written off against tax as capital payments increase, watch out for that one.

Senna

Although its rented at the moment, would you be happy enough to pay the mortgage yourself and the rent where ever you life now? Could you afford that?

I would sell the property in N dublin for whatever you can and just get rid of it. Have you declared it as a rented property? since you were a FTB when you bought it (assume) did you have to pay stamp duty when you turned it into a investment property? Are your accounts in order?

D3PO

The obvious first question is could you afford the 2 mortgages if your tennants moved out ?

If not dont even think about buying a second place.

Also dont forget if you buy a second place you will

a) have to pay stamp duty regardless of the price of the house as your no longer an FTB

b) wont get a preferable interest rate as one of the properties will be deemed a RIP (Rental investment property) You may or may not be aware but banks havent passed on the interest rate cuts to investment properties only to owner occupied ones

c) not be entitled to Tax relief at source on the second property

d) have to pay the government levy on second homes


among other things of course.

now im reading between the lines but if you couldnt afford to buy on the southside a few years ago you are unlikely to be able to afford to have 2 properties unless you have had a significant salary increase in the ensuing years.

Its unlikely an underwriter would approve a second mortgage to you anyway given the current climate.

Like Ive said in numerous threads here what to do now is very much based on personal circumstances, its really hard to advise somebody else what to do as we dont have the full facts

Gurgle

ChunkyLover69 wrote: »

From reading through the threads here, it is obvious there are quite a few people here who know a lot more about the property market than I do.

What a crazy assumption.

If they (we?) knew so much we'd all have made millions in the last 10 years and be sitting on a pile of cash now, having sold in the first half of 2006.