investing in a house

andy555

Hi ...Is it worth to buy a house with rent so low??Any opinions or in what can I invest??

Atlantic Dawn

To buy to let no.

To live in, possibly if you don't intend moving for about 10 years. Consider though that NAMA will eventually have to flood the market with houses as will the banks with reposessed property, when this happens prices will collapse further.

andy555

Thanks for the reply Atlantic Dawn ,but what would you invest in ?
We don't want to gamble by buying shares......

Mort5000

Hi Andy555,

Approx how much do you want to invest?
How long until retirement?
How risk "averse" are you?

Mort

pocketdooz

andy555 wrote: »

Thanks for the reply Atlantic Dawn ,but what would you invest in ?
We don't want to gamble by buying shares......

You need to give far more information if you want any help.

Noone knows where you are based, how much you earn, how much you have to invest, kid/no kids, in debt/not, own a house/not etc.etc

But to offer something more constructive - you could check out Dublin Airport Authority bonds. They pay 6.5% per year until 2018. You will earn a 60% return in 9 years for a BBB+ rated bond issued by the DAA. Not bad if you are looking for a relatively secure investment for the medium term.

andy555

Thanks again..The thing is the sum is 250 000 euro and they are not mine, it is my father's in law and we don't want to take many chances by investing in bonds or shares, we were thinking about a house with some return from rent.
Thanks again ..

pocketdooz

andy555 wrote: »

Thanks again..The thing is the sum is 250 000 euro and they are not mine, it is my father's in law and we don't want to take many chances by investing in bonds or shares, we were thinking about a house with some return from rent.
Thanks again ..

I think you should speak to a qualified independent financial advisor.

RizzoJR

andy555 wrote: »

Thanks for the reply Atlantic Dawn ,but what would you invest in ?
We don't want to gamble by buying shares......

you mean gamble by buying a house?

how can you prefer houses over stocks after whats happened in Ireland?!

can sell all your stocks in a few seconds by clicking a mouse

alot harder to sell a house, and cant sell house bit by bit over time

RizzoJR

andy555 wrote: »

Hi ...Is it worth to buy a house with rent so low??Any opinions or in what can I invest??

I'd go the shares route myself
dont have to worry about pipes bursting, bad tennants, roof being blown off,
property prices crashing even more, declaring taxes from rent,

especially of yous have no experience of being a landlord.

andy555

And what if the shares go down???

RizzoJR

andy555 wrote: »

And what if the shares go down???

what if house prices (and rents) go down???

bryaner

Shares what a joke Bricks and mortar if your in for the long haul

Smcgie

bryaner wrote: »

Bricks and mortar if your in for the long haul

Oh What an excellent idea, where have i heard that before

Here>>

andy555

If the house prices go down it is steel there, after while it may go up(you don't loose it), but in share investing...I'm note sure ,what I mean maybe it is a slow return, but is a safer one

bryaner

Smcgie wrote: »

Oh What an excellent idea, where have i heard that before

Here>>

Do you understand long haul? i.e 30 years +. Always a decent return especially when you take expenses being deductible from capital gains.Quick example my
father bought his house in the early 60s for £1500 the house 3 doors up sold
3 weeks ago for €165'000 in the middle of a recession. Do the math!!! But I'd
imaging your heading off to buy some shares in the banks..

Gurgle

andy555 wrote: »

Hi ...Is it worth to buy a house with rent so low??Any opinions or in what can I invest??

People with no idea what they're doing 'investing' in property is what has crippled the country.
If you're thinking of purchasing a home, then its not entirely a monetary decision. Its a lifestyle choice not an investment.

bryaner

13 QUOTES FROM WARREN BUFFETT (TRANSLATED)

1. “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”

REI Translation: Today’s market fluctuations are your friend because they’ve scared off your competition … other investors. They’re also your friend because the fluctuations have caused there to be a flood of motivated sellers. And as any savvy investor knows, buying from motivated sellers is the only way to make it in this business.

2. “Only when the tide goes out do you discover who’s been swimming naked.”

REI Translation: Keep plenty of tools (investing techniques) in your tool belt so that you can adapt to a changing market. What worked best in 2005 doesn’t work best in 2008. Today, we’re seeing first hand that those with only one investing strategy are taking a beating.

3. “Our favorite holding period is forever.”

REI Translation: To build true long-term wealth, you must buy and hold properties.

4. “Risk comes from not knowing what you’re doing.”

REI Translation: Those who don’t know how to properly analyze, enter, and exit real estate transactions think today’s market is risky. Those who fully understand the intricacies of creative real estate investing continue to participate and profit.

5. “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

REI Translation: Now’s the time to buy. In real estate and in life, it’s almost always best to act opposite to the crowd.

6. “Wide diversification is only required when investors do not understand what they are doing.”

REI Translation: Naive real estate investors are putting their money into stocks, bonds, and savings accounts right now. Smart investors continue to invest in real estate, and they’re picking up more bargains than ever.

7. “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”

REI Translation: If you’re concerned that you cannot sell for full value, then buy lower – at about 60% of value – and sell lower – at about 90% of value.

8. “We will reject interesting opportunities rather than over-leverage our balance sheet.”

REI Translation: Sometimes the best real estate deals are the ones you don’t make.

9. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

REI Translation: If you’re going to hold a property long term, it’s far better to buy a wonderful house at a fair price than a dump at a bargain.

10. “A public-opinion poll is no substitute for thought.”

REI Translation: Most Americans think that now is a risky time to get into real estate investing. Do they know more than you? Most likely not. Only a handful of Americans know the specific techniques for profiting in today’s market. And that’s because they read blogs like this, they buy REI courses, they attend their local REI meetings, etc. Most Americans get their “investing tips” from the daily paper. There couldn’t be a worse source. Do you think journalists know how to wholesale houses, do short sales, take over a loan Subject 2, etc.? I think not.

11. “The most important quality for an investor is temperament, not intellect… You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

REI Translation: Don’t worry what the masses are doing. Follow the advice of successful real estate investors, and use their techniques to profit in today’s market.

12. “You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it.”

REI Translation: Every deal must work on paper before it will ever work in real life.

13. “I really like my life. I’ve arranged my life so that I can do what I want.”

REI Translation: Remember, that’s what real estate investing is all about. Arranging your life so that you can do what you want to do when you want to do it.

Gurgle

bryaner wrote: »

Do you understand long haul? i.e 30 years +. Always a decent return especially when you take expenses being deductible from capital gains.

Have to also consider that its likely to cost money every month for the next 2 to 10 years before the rental income (less tax) covers mortgage payments.

Long term, as you said, its reasonably bullet-proof.

RizzoJR

bryaner wrote: »

Do you understand long haul? i.e 30 years +. Always a decent return especially when you take expenses being deductible from capital gains.Quick example my
father bought his house in the early 60s for £1500 the house 3 doors up sold
3 weeks ago for €165'000 in the middle of a recession. Do the math!!! But I'd
imaging your heading off to buy some shares in the banks..

its pointless arguing stocks vs property like this,
everyone could post their own stories and examples
we'd all sound like marketing trolls from investment funds and estate
agents...

but COMPARE!!!
please go off and calculate how much this 1500 would have become if
it was invested in shares back in the 60s,
DO THE MATH!!!

AND

is your father regretful his paper gain has dropped by maybe 30% over last 3 years???

bricks and mortar can be PART of a long term investment portfolio,

you can gain exposure to property with various stocks
and not have to bother fixing any toilets

allowing you to gradually sell for profits, bit by bit
cant sell half a house for profit OR loss

bryaner

RizzoJR wrote: »

its pointless arguing stocks vs property like this,
everyone could post their own stories and examples
we'd all sound like marketing trolls from investment funds and estate
agents...

but COMPARE!!!
please go off and calculate how much this 1500 would have become if
it was invested in shares back in the 60s,
DO THE MATH!!!

AND

is your father regretful his paper gain has dropped by maybe 30% over last 3 years???

bricks and mortar can be PART of a long term investment portfolio,

you can gain exposure to property with various stocks
and not have to bother fixing any toilets

allowing you to gradually sell for profits, bit by bit
cant sell half a house for profit OR loss

Good investment long term end of
And hell yea he is happy, he's selling soon and moving in with me and splitting the cash do the MATH

andy555

Like what stocks and what is the risk??

bryaner

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”
Warren Buffett quote

Idu

bryaner wrote: »

13 QUOTES FROM WARREN BUFFETT (TRANSLATED)

1. “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”

REI Translation: Today’s market fluctuations are your friend because they’ve scared off your competition … other investors. They’re also your friend because the fluctuations have caused there to be a flood of motivated sellers. And as any savvy investor knows, buying from motivated sellers is the only way to make it in this business.

2. “Only when the tide goes out do you discover who’s been swimming naked.”

REI Translation: Keep plenty of tools (investing techniques) in your tool belt so that you can adapt to a changing market. What worked best in 2005 doesn’t work best in 2008. Today, we’re seeing first hand that those with only one investing strategy are taking a beating.

3. “Our favorite holding period is forever.”

REI Translation: To build true long-term wealth, you must buy and hold properties.

4. “Risk comes from not knowing what you’re doing.”

REI Translation: Those who don’t know how to properly analyze, enter, and exit real estate transactions think today’s market is risky. Those who fully understand the intricacies of creative real estate investing continue to participate and profit.

5. “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

REI Translation: Now’s the time to buy. In real estate and in life, it’s almost always best to act opposite to the crowd.

6. “Wide diversification is only required when investors do not understand what they are doing.”

REI Translation: Naive real estate investors are putting their money into stocks, bonds, and savings accounts right now. Smart investors continue to invest in real estate, and they’re picking up more bargains than ever.

7. “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”

REI Translation: If you’re concerned that you cannot sell for full value, then buy lower – at about 60% of value – and sell lower – at about 90% of value.

8. “We will reject interesting opportunities rather than over-leverage our balance sheet.”

REI Translation: Sometimes the best real estate deals are the ones you don’t make.

9. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

REI Translation: If you’re going to hold a property long term, it’s far better to buy a wonderful house at a fair price than a dump at a bargain.

10. “A public-opinion poll is no substitute for thought.”

REI Translation: Most Americans think that now is a risky time to get into real estate investing. Do they know more than you? Most likely not. Only a handful of Americans know the specific techniques for profiting in today’s market. And that’s because they read blogs like this, they buy REI courses, they attend their local REI meetings, etc. Most Americans get their “investing tips” from the daily paper. There couldn’t be a worse source. Do you think journalists know how to wholesale houses, do short sales, take over a loan Subject 2, etc.? I think not.

11. “The most important quality for an investor is temperament, not intellect… You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

REI Translation: Don’t worry what the masses are doing. Follow the advice of successful real estate investors, and use their techniques to profit in today’s market.

12. “You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it.”

REI Translation: Every deal must work on paper before it will ever work in real life.

13. “I really like my life. I’ve arranged my life so that I can do what I want.”

REI Translation: Remember, that’s what real estate investing is all about. Arranging your life so that you can do what you want to do when you want to do it.

Are they your own translations?

Think you're reaching a little bit here. Buffett is known as a great stock investor not a real estate mogul. Bit ridiculous to use someone's arguements about the value of long term stock investing to champion your opinion of bricks and mortar being a more secure play.

bryaner

Idu wrote: »

Are they your own translations?

Think you're reaching a little bit here. Buffett is known as a great stock investor not a real estate mogul. Bit ridiculous to use someone's arguements about the value of long term stock investing to champion your opinion of bricks and mortar being a more secure play.

Yea I highlighted too many of his quotes, meant to just pick his property ones

Fighting Irish

bryaner wrote: »

Do you understand long haul? i.e 30 years +. Always a decent return especially when you take expenses being deductible from capital gains.Quick example my
father bought his house in the early 60s for £1500 the house 3 doors up sold
3 weeks ago for €165'000 in the middle of a recession. Do the math!!! But I'd
imaging your heading off to buy some shares in the banks..

:rolleyes:

RizzoJR

bryaner wrote: »

Good investment long term end of
And hell yea he is happy, he's selling soon and moving in with me and splitting the cash do the MATH

it was never an investment in first place, it was a home?

is the genius not annoyed he didnt try sell like 2 or 3 years ago?

bryaner

Fighting Irish wrote: »

:rolleyes:

Probably still making £1500 in carlow in fairness

Wile E. Coyote

bryaner wrote: »

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”
Warren Buffett quote

Good god ease up on the Warren Buffett quotes. I don't think thats the type of wealth the OP is aspiring to if he's looking at rental income from an investment property.

OP if your planning on keeping the house for the next 30-40 years before selling it on then maybe that is the way to go. However as it's your father in laws money he would probably like to see a return on the investment without having to wait so long. In which case then I think something along the lines off the DAA bonds as mentioned earlier would be a better option. Best advise anyone here can give you is to contact a financial advisor and just remember that no matter what you decide to do it will always be a gamble.

bryaner

RizzoJR wrote: »

it was never an investment in first place, it was a home?

is the genius not annoyed he didnt try sell like 2 or 3 years ago?

No still quite happy with his lump and state pension

Fighting Irish

bryaner wrote: »

Probably still making £1500 in carlow in fairness

I don't know what you mean? Carlow is crap? I agree

bryaner

Fighting Irish wrote: »

I don't know what you mean? Carlow is crap? I agree

I agree to

BrownianMotion

OP in my opinion now is not the time to invest in property. If you are worried about the value of your investment dropping then property/shares are not for you. Find safer investments which guarantee your capital.

Bryaners advice is shocking and I have to say the interpretation of Warren Buffets quotes were hilarious.

That said number 6 on the quotes list is important for you. You do not know what you are doing so do not under any circumstances invest in a single asset class.

bryaner

BrownianMotion wrote: »

OP in my opinion now is not the time to invest in property. If you are worried about the value of your investment dropping then property/shares are not for you. Find safer investments which guarantee your capital.

Bryaners advice is shocking and I have to say the interpretation of Warren Buffets quotes were hilarious.

That said number 6 on the quotes list is important for you. You do not know what you are doing so do not under any circumstances invest in a single asset class.

Glad I gave you a lift that's good, but in all honesty long haul property is a
good investment have a look at the 50 year graphs. Or do I have to start quoting Mark Twain

andy555

Thanks to All....So many opinions ????

strmin

bryaner wrote: »

Do you understand long haul? i.e 30 years +. Always a decent return especially when you take expenses being deductible from capital gains.Quick example my
father bought his house in the early 60s for £1500 the house 3 doors up sold
3 weeks ago for €165'000 in the middle of a recession. Do the math!!! But I'd
imaging your heading off to buy some shares in the banks..

In 1962 with £1500 he could have bought 200 shares of BRK.A $8 a pop.
Value today 200x124,450=24890000

24 mil beats €165'000 anytime.

RizzoJR

andy555 wrote: »

Like what stocks and what is the risk??

There is no simple formula to investing in shares nor calculating
risks!!!

Thats were YOU have to educate yourself and put the hours in,
like buying a new car or even house.

If you can go back a couple of years and check stock prices and dividend yields,
then roll forward to now, you can pretty much see clearly the risks!

But you should also be asking "what are the rewards??"

Dubh Geannain

Sure buy a house as an investment property..... Just not in Ireland. The rental yields are extremely low at the moment and you'd be getting a better rate of return YoY with Irish Government bonds.

If Irish property was considered a sound investment at the moment we wouldn't be looking at 175,000 empties (holiday homes no included). Furthermore prices wouldn't be sliding.

Gurgle

strmin wrote: »

In 1962 with £1500 he could have bought 200 shares of BRK.A $8 a pop.
Value today 200x124,450=24890000

24 mil beats €165'000 anytime.

Would you like to qualify that with statistics on the percentage of companies which were around in 1962 and are still here today vs the number of houses ?

He could have invested it in any number of companies and lost everything. At least with a house you can be sure the patch of dirt its sitting on will still be there in 50 years.

jimmmy

Gurgle wrote: »

At least with a house you can be sure the patch of dirt its sitting on will still be there in 50 years.

Agreed. In my humble opinion, the main thing is to go for a house close to a town or city , rather than in the back of beyond. Especially if / when fossil fuels start to run out. Think location ; easy + convenient to shops, work, entertainment etc.

Oafley Jones

I can't believe that anyone is still recommending housing as an investment. Have we learned nothing as a nation. Talk about being doomed to repeat your failures. We have...

Massive oversupply of housing stock
Rising unemployment
Rising interest rates
Poor quality/location of most the housing stock
Terrible yields
Increasing associated taxes and charges
Also, people are forgetting about the causes of hyper inflation and unique historical factors when they looking at time scales going back 40-50 years

High interest savings accounts or bonds would be a far better investment.

Oafley Jones

Gurgle wrote: »

He could have invested it in any number of companies and lost everything. At least with a house you can be sure the patch of dirt its sitting on will still be there in 50 years.

With the amount of housing built of flood plains I wouldn't be so sure.

Gurgle

Oafley Jones wrote: »

With the amount of housing built of flood plains I wouldn't be so sure.

That would be the dot.com end of the property market

Mark Twain had the right idea - buy land, they've stopped making it.

But he never said it would pay for itself outright - it was a uniquely Irish stupidity that lead to the housing boom, a situation where you could buy a house on credit and rent it out for more than enough to meet your mortgage payments.

Investment: nothing but a promise.

Bottom line on property is that if you can afford to pay for your investment, and continue doing so for 20-30 years then you will make money. There is no company you can invest in that makes the same promise.

The part where everyone crashed is the 'afford to pay for it' bit - everyone* expected it to pay for itself.
*not quite everyone, but lots of people.

andy555

Yes, it makes sens..