Apartment in Cork city centre - still a good buy?

luru1

Hi there,
I am about to buy a lovely apartment in Cork City Centre. The apartment is huge, almost 120 square meters and will be fixed to nice standards. However, all my colleagues and friends tell me I am crazy to buy an apartment because in Ireland nobody buys apartments and I will never be able to resell it, no matter how lovely the apt is. Since I am not irish, this makes me worry that I am walking into a horrible investment and even though I have no current plan of leaving you never know in the future! Is it true that apartments are impossible to sell even though right in the city centre of the 2nd major city in Ireland and even though it is a nice big place? Any advise would be great, thank you!

RoverZT

Why are you buying?

luru1

i am buying to spend money in something that i own. I have been renting for years and rent is not a great investment in the long run...

ABajaninCork

If that's what you want, then go for it!

But I would be very wary of buying an apartment. Have you checked the lease, ground rent & the service charges? What is the management company like? Do they have a good track record in settling issues?

Did you get a full structural survey? How old is the flat? This is especially important, in view of recent events in Dublin where the residents have had to move out due to safety issues.

Check all these out very carefully through your solicitor. If the firm's any good, they should be on the case anyway, but check, check, and check again!

I don't think a flat's a great investment IMO. You'd be better off putting the money in a house.

Slydice

You want to purchase something. You want to know if it's a good idea.

Ask yourself what you mean by good idea. As this would be a big expensive purchase, ask yourself what you want from it (and maybe what and where you want to go in life)? You're essentially doing some planning.

If you'd like some help working out if it might be a good idea for you, then to get some good advise, you'd probably need to share a bit more of your circumstances and what/where you'd like to go with them.

Obviously don't share everything. You want to keep your privacy

dardhal

luru1 wrote: »

However, all my colleagues and friends tell me I am crazy to buy an apartment because in Ireland nobody buys apartments and I will never be able to resell it, no matter how lovely the apt is.

Well, I don't know where you come from, but don't take advice regarding real estate investment into account if that comes from the regular irish, spanish, northamerican o british guy, as they have had their own share of mistakes, housing bubbles, and "real estates can only increase in price" mentality. Hundreds of thousands of mortgages in Ireland in arrears is not a good sign of good investment decisions, as prices dropping in excess of 50% and counting says that a lot of people were wrong when buying.

So, take their advice with a pinch of salt, specially if they give no further reasons or explanations. Of course, if your plan is "buy now, rent for a couple of years, and then sell with a 25% net gain", better keep your money (and the bank's money) at safe. If, on the other hand, you have very long term plans to stay there, with little probability to need to move anywhere else, you like the area, it is not deemed to worsen anytime soon dramatically, your neighbours are nice, the running costs for the apartment are low, you pay more rent than for the mortgage, etc. that may make more sense. But don't forget the hidden costs of housing, from insurance to management company to property tax to wear&tear, etc.

Don't forget either that is the apartment block is like mine, people move in and leave every day, so your current lovely neighbours could turn into a massive problem overnight, if the landlord next door is short on cash, and decides to rent the apartment with no proper "background" or ongoing tenant checking.

Since I am not irish, this makes me worry that I am walking into a horrible investment and even though I have no current plan of leaving you never know in the future! Is it true that apartments are impossible to sell even though right in the city centre of the 2nd major city in Ireland and even though it is a nice big place? Any advise would be great, thank you!

The era of investing in apartments in Ireland may have gone forever, or it may return to more sensible returns on investment, rather than the typical scheme of buying to let prices go up a couple of year and then sell to make a profit. If you buy the apartment to live in it, you are not going to get any profit in the foreseeable future if you sell it, but if you have to absolutely sell it (for a thousand different reasons), and depending on how much deeper housing prices sink in the coming year, by the time you have to sell you may have spent less overall than renting the same apartment to the current landlord, or renting an equivalent one.

It is you money (and the bank's), so anything you do it's up to you, take advice with caution if advice doesn't come with some reasoning, and think that life changes, and sometimes in unpredictable ways. By committing to such a huge expense you limit a lot your changes of moving elsewhere in the medium term, as you won't probably be able to afford living in one place and paying a mortgage even if you find a tenant able and willing to pay big time for it. And you may have to move because, believe it or not, people can loose their jobs, and when that happens if you have a hard time getting another, similarly paid job, you are in deep trouble.

Well, just think about it, and make an informed decision. Lots of people didn't in the past, and we are all now paying the consequences.

The_Conductor

Is it a good buy or a bad buy?
It depends on your exact circumstances, and then the property itself- location of which will be a massive factor.

In general- lending institutions are very reluctant to lend to people to buy apartments (read leasehold properties here)- as property prices are not only continuing to fall, but apartment prices are falling faster than any other segment of the market.

If you cannot see yourself holding onto this property longterm (read 20 years+) then you probably are better off continuing to rent.

I don't fully get why you think you're getting bad money's worth by renting? You're buying a service like any other service- and one that over the past 5-6 years has insulated people from the property price falls incurred by property owners (and will insulate them from further falls, property taxes, other costs of ownership along with safeguarding their ability to move elsewhere with minimal hassle and fuss).

If you cannot see yourself living there longterm- and make the finances work taking further price falls, property taxes and costs of ownership into account- then its not a good buy, regardless of how much it costs.

You still seem somehow to be hanging onto the 'rent is dead money' mantra- which is complete and utter nonsense.

luru1

thank you all for your replies, definitely food for thought!