Good deals?

syncmaster2011

Hi all ,

New to the forum .
I'm considering investing in a property , could manage up to around 150k mark . The value in the market seems to have improved but still not sure if I should put it off till next year . Some of the following caught my eye as possible decent yeild contenders , just wondering what ye think , is there a possible trick I'm missing somewhere (some of the prices seem very low).

http://www.myhome.ie/residential/brochure/209-castlecurragh-heath-mulhuddart-dublin-15/1282869

http://www.myhome.ie/residential/brochure/49-the-steeples-chapelizod-dublin-20/1471408

http://www.myhome.ie/residential/brochure/apartment-62-109-parnell-street-north-city-centre-dublin-1/1465927

http://www.myhome.ie/residential/brochure/85-eugene-st-south-city-centre-d8-dublin-8/1260229

Any feedback appreciated

antiskeptic

syncmaster2011 wrote: »

I'm considering investing in a property

The first thing any investor in anything should do is understand the area he plans to invest in. That said..

The value in the market seems to have improved but still not sure if I should put it off till next year

..you sound a little vague.

If it is the case that house prices are still dropping at 12-15% a year is it possible to invest today? Even at what appear to be bargain prices? If those 'bargains' aren't being snapped up today then they can't but be cheaper tomorrow.

ShadowHearth

those are lovely, but only if you want to live in them.

housing is not an investment these days.

Atlantic Dawn

I don't think now is a good time but if I had to and assuming I am going to hold on to the property for atleast 10 years I would look at purchasing ex council houses which seem to be in plentiful supply for about 80-100k, yes they may not be in the most desirable areas but you are purchasing them as an investment to rent out. Look for those with heating, decent windows and no major jobs required, renting these shouldn't be a problem. Avoid 1 bedroomed properties and apartments as they are limited in who you can rent them out to.

noxqs

Im sorry, what?

Did you say investing?

In the worst possible asset the investment world knows? The one that only tracks inflation? The one which is still dropping and looks to flatline for decades?

You wanna borrow money for that?

Oh my, oh my. Just buy some stocks. The bubble is over you're too late. The bus left the station. Buy stocks. It's real value.

syncmaster2011

Hi again , thanks for replys guys

antiskeptic - Apologies for being vague , I'm not familiar with those areas as regards reputation/renting , but on the face of it , it looks possible to get a decent yeild from renting them . The fact it's still a falling market is of course a worry but at that price (negotiated further) , my logic is that you could manage 7% .

Atlantic Dawn - those are sort of the lines I was thinking along .

noxqs - I'm aware the bus has left , thank god I wasn't on it . Not borrowing the money , I was looking at a long term investment for it . Appreciate the reply but why so adament that stocks are the way to go and if you were in my shoes what would you be looking at ?

brianb10

you really need to do some research as to the best place to invest your money.
talk to a financial advisor.

you have money to invest, are you telling me you looked at different options and decided that property in 2011 is the best investment you could come up with?

noxqs

Buy index tracking funds, like S&P 500, Dow Jones, Forbes Global 1000. Anything which has its risk spread out over many companies or assets.

A house is a really, really, really, really, bad investment. Not just in Ireland but world wide. The underlying asset does not increase much in value (normal market, tracks inflation) and rental yields are low (and who wants to be a landlord?).

Index trackers you get the dividends and the appreciation per year, at a lower risk. Historically stocks goes up 10-12% per year + dividends. Houses? I can't think of any economic numbers that suggest houses can even remotely compete with that or a standard issue government bond.

Yeah bubblenomics in Ireland, perhaps, it was a "high yield" asset. Now its junk, and it will remain junk for 30 odd years, look at Japans housing market (in a more flexible and strong economy, btw) they're still at 1986 prices today. And thats not inflation adjusted!

antiskeptic

syncmaster2011 wrote: »

antiskeptic - Apologies for being vague , I'm not familiar with those areas as regards reputation/renting , but on the face of it , it looks possible to get a decent yeild from renting them . The fact it's still a falling market is of course a worry but at that price (negotiated further) , my logic is that you could manage 7% .

Let's assume the likely scenario that a purchase now will see you enter negative equity in the not too distant future and that you'll remain there for a decent few years (until the housing market turns back towards upward growth and you get back to where you would have been had you placed your money in a safe bet)

The issue then is rental return. It seems to me that that market would be worth investigation. Have you evaluated:


- the current rental overhang in Dublin in general?

- the likely increase in rental overhang should emigration continue at present rates?

- how likely a rent supplement downward review (the rental suppliment places an artificial floor on the rental market whether or not you invest in that league or not)? Ireland is looking less and less like it can afford to maintain it's social welfare programme.

- how likely structural movement towards wage reduction. I moved back from Holland to Ireland in 1997 and earned in pounds what I had been earning in guilders for the same level job. The exchange rate was 3.25:1 at the time! Ireland was uncompetitive then and it only got worse. It seems inevitable that we're going to have to assume our proper position in the world now that the party is over. Wage reduction means rentals will drop.

I don't see any bright light for the future of renting myself. Not to be sniffed at would be the hassle factor involved in dealing with the public - there might be easier ways to earn an investment living.

noxqs

Further more.

I have all my savings in stocks (well I do have some cash for short term emergencies too). I can buy and sell at any moment whatever amount I like.

You cant just sell 10% of the house if you want to spend some money. That is bad. Then you'd have to borrow money off the back of your other assets which costs interest. Thats bad money management.

7% rental yield? That is optimistic, at best.

Now assuming that unicorns are real, sorry, that the rental yield doesnt drop. Then factor in:

- Maintenance
- Hassle with tenants
- Insurance
- Negative equity?
- Taxes (New property taxes coming up)
- Stamp duty
- Agent fees if you use a rental agency
- Advertisement fees
- Water charges ?
- Lost oppertunity vs buying in higher yield stocks

The sums, it doesn't add up.

the groutch

you won't make any quick bucks with it, but if you're financially secure enough to tied it up for 10 years plus, there is some potential if you can find the very bottom of the market.
working out exactly when that is will be the chllenge.

as mentioned above, property is just one of many options. do your homework and weigh up the risk vs potential rewards of all of them before committing to anything

syncmaster2011

Appreciate all the replys guys , plenty of good advice to digest . Thanks again .


noxqs :"You cant just sell 10% of the house if you want to spend some money. That is bad. Then you'd have to borrow money off the back of your other assets which costs interest. Thats bad money management."

Fair point , one of the attractions of investing in a property for me is that it's a tangible asset and at least it's some form of safety net if the proverbial **** hits the fan . Out of interest , if you had to , what would you buy a)property in Ireland b)gold coin/bullion ?

noxqs

Im not interested in either of those.

Gold bullion is in a massive bubble. Irish property is in a deflationary bubble.
Wouldn't touch any of them. The risk is too great.

Buying stocks you're buying a piece of a company - regardless of what happens, as long as they will have revenue, whichever currency will be used, you'll get a share of that. General Electric, Walmart, Microsoft, IBM, Exxon Mobil, etc. These companies probably will still be making money for decades to come (while gold and the rest of the economy will keep going through cycles as it always has).

I buy world market funds which holds many of the largest companies. If the sh*t hits the fan anyways, it doesn't matter which asset you hold. But example - recession in ireland is what? Entering the 4th year? The world markets recovered years ago.

Why anyone would want a shack in Ireland to store their money in is beyond me. Its a bad investment because it has an upkeep to just own and maintain. Having stocks/bonds they'll cycle up and down but generally even if they drop in value if you choose large cap/bonds you still get dividends in the worst of years. And you can sell at any time and change investment profile. A house, is the worst possible asset. Case in point, soon just owning a house will cost a yearly tax. Regardless of profit/loss.

If you want to buy a house just because you can 'touch it' then that's your prerogative. But it is a stupid reason to invest in a bad asset. Stocks are heavily regulated (more so than houses!) and are very tangible. It is a real asset. As real as anything.

P.S.

If I had to? Gold. It can be sold on world markets in seconds and converted to any given currency which is still standing should the sh*t hit the fan. A house on an Island of less than 5 million people with large emigration of the newly educated and a growing cost of supporting the elderly with no young generation to turn the wheels of the economy? Well....

donabate1

I'm in the same position, looking to get a good deal....i'll keep in touch with any sprcials/good deals....n vice versa