Advice on whether to still buy

2wice

Looking for others thoughts on making a decision


We found a really inexpensive house to buy in an area about an hours commute from my work. The house is in Nama so its taking ages to buy. While waiting for this we moved to the area on a six month lease and I have found out that I hate living that far out from the city/my work. The house is a bargain but I don't want to live there so my dilemma is, do we still buy the house and try to rent it out (it looks like the rent would cover the mortgage) and rent in the city ourselves. Or just let the house go even though we cant find anything even 40k above the price in the city (can only afford to go 20 above the price). Someone elses take on this would be nice.

Ritchi

I'd let it go, you don't need the hassle of trying to rent it out and it may prevent you from buying yourself. It's likely that house prices will continue to drop and you will be able to buy where you want in a year or two.

djimi

If you dont want to be a landlord then dont be a landlord. You dont want to live in the house so what is the point in bringing added hassle and probable expense on yourself just for the sake of it. If you want to get into letting then do so for the right reasons; not just because a cheap house became available.

quozl

Are you remembering that you'll be paying tax on the rental income? There's also tax of extending PRSI to include rental income in this years budget so you could be losing slightly over 50% of the rental income to tax.

Plus the hassle.

Why would you do it if you don't want to live in it? What's the huge upside to make up for all that hassle?

2wice

thanks for all your replies.I guess this is why I posted this, I'm not sure of the cost involved etc. My concerns was the cost of buying another house if we did find one later on what kind of costs would be incurred by selling a house to buy another one. I suppose I'm asking just how much of an advantage is being a first time buyer ?

Theboinkmaster

Run far away and never look back. Do not buy.

fricatus

I would say never buy a house unless you'd be happy to spend at least 10 years of your life there. The only exception is if you're in the landlord business - and then the only criterion is yield.

You may lose face and feel like a tit now, but would you prefer to be stuck somewhere you don't want to be, with a mortgage, for at least a decade?

From what you've outlined, buying this house would be a foolish decision.

Clive

OP, you're thinking about starting a business as a landlord, you need to treat it as a business. Factor in all the costs - NPPR, property tax, PRTB costs, mortgage interest rate rises, empty periods, possible agent and accountant fees, tax, insurance, maintenance, damage, tenants refusing to vacate, opportunity cost etc.

On the other side you have rental income and possible capital appreciation.

Nobody can do this full calculation for you without knowing full details of your circumstances and the property in question. As other posters have said though, when you sit down and look at the figures, you'll probably decide to run a mile. It may feel like you're losing out on a bargain, but many people who have a property noose around their neck now would give anything to go back and convince themselves to walk on by.

Idbatterim

what city are you talking about OP? also why do you think its that cheap, the highly probably reason is location, location, location!

NIMAN

I'd say don't buy.

You don't want to be a landlord in this current climate, charges for owning houses are only going one way, and I have a feeling LLs are going to get hit tough in coming years.

I was a LL, not by choice, and recently sold my property, and I am so relieved to be shot of it tbh.

okiss

Moving to this area has given you an idea of what the area and commute is like and you have found out you don't like the commute.
I would not buy this house due to the following:
a) Your unwilling to live in it.
b) You have no garintee that you will be able to rent out this house.
c) You will have all the landlord costs and these will rise in the future.
d) You could have to cover the cost of this mortgage from your own pocket if you can't rent it out.
e) You will not get another mortgage at a later date. If the house prices fall in the area you like in another year or two you want to be in a position to buy then.
Be thankful that you had to rent in this area for a few months as it has saved you from making a very expensive long term financial mistake.
I know couples who are stuck in the wrong house or the wrong area due to the falling house prices and the fact the banks are not lending much.
When your lease is up I would move back to the area you like and keep saving as house prices will continue to fall.

handlemaster

seems like a no brainer. You don't like the area. Why would you buy.