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Seeking Financial Advice: Buying an Apartment

  • 19-06-2017 11:00am
    #1
    Registered Users Posts: 2


    Hello there,

    I’d like to ask for some financial advice on the behalf of my cousin. He recently inherited a sum of 600k and is rather unsure of what to do with the money. Here are some points that might be relevant in regard to his stage in life:

    - He is 27 years old.

    - He has a few third level qualifications, two of which are in IT.

    - He is unemployed but plans to secure employment soon, whether in IT or something else.

    - He has no debt.

    - Currently plans to live and work in Dublin

    Right now, the most important thing for him is to not squander the money away. In other words, he does not want to use it as if it were an income.


    He is currently considering purchasing an apartment in Dublin around the center. This might be a favorable option because:

    - Apartment prices in the center are rising.

    - It would remove the expense of renting

    - He could rent out a room if it’s a two-bedroom apartment

    - The center in a desirable place to live in

    So, the question is: would buying an apartment in the center or in a good location of Dublin be a good idea?

    Also, any comments/advice of what would be the wisest thing to do with the money would be appreciated.

    Thanks


Comments

  • Registered Users, Registered Users 2 Posts: 537 ✭✭✭topper_harley2


    Where is he living now? He was obviously able to live there without the E600K, so why rush into buying immediately? This is a life changing moment, best not to panic buy.

    Dublin city centre may not be desirable to live in if he ends up working in somewhere on the outskirts with crap public transport. Similarly, centre may not be desirable to live in, say in five years time when he wants a 3 bed semi d with garden, but can't shift his apartment. If buying a property, I'd buy one for living in, not for buying in a certain place because "prices are increasing".

    I wouldn't personally buy an apartment, but that's just me. I'd concentrate on getting a job first, wait six months and decide then. While deciding this, I'd also split the money across multiple banks since the deposit guarantee scheme only covers E100K.

    Also if he does buy a house/apartment, I'd suggest he contact an independent financial advisor about the rest. Getting advice from amateurs on boards.ie about investing E300K may not be the best idea!


  • Registered Users Posts: 349 ✭✭deathtocaptcha


    • €250k in an apartment
    • €200k in index funds
    • €100k in gold
    • €50k in cryptocurrency


  • Registered Users Posts: 2 Ra3kolnikov33


    Thanks for your replies.

    I do agree that it is best for him to wait six months or so, and educate himself in finance, before making a commitment. He thought that, since property prices are rising, purchasing and an apartment to live in and perhaps rent, would be a good idea, before prices increase further.

    Source stating predictions for property prices increasing for 2017: Article titled 'Irish property prices to increase by at least 8% in 2017' by The Irish Times (Boards.ie won't let be post a URL)

    He also thought that he could sell the apartment (if he purchased one) in a few years time if it did not work out for him (wanted to live somewhere else). However, in the future property prices might have decreased heavily and selling an apartment could be a huge hassle/problematic, making the idea of buying one now not worth while.

    Again thanks again for your reply


  • Registered Users, Registered Users 2 Posts: 678 ✭✭✭FernandoTorres


    The best investment he can make now would be to invest his time in reading. Seeing as he's not working he should take advantage and learn all he can. Start with basic books and he can move on from there. Not a bad list here: http://www.lifehack.org/articles/money/20-best-personal-finance-books-you-should-read-now.html.
    Even if he goes for professional advice it's best to have a good basic understanding so he asks the right questions. Steer clear of any advisers linked to the banks or tied to particular financial institutions. About the worst thing he could do now would be to blindly follow the advice of strangers. There'll never be a shortage of people to tell you what to do with your money but only you will ever have your own best interests at heart. Investing in cryptocurrency seems to be the latest thing everyone has suddenly become an "expert" in.
    I don't think buying an apartment is a bad idea per se as long as he saves and doesn't squander his wages just because he has no mortgage. Also as someone above pointed out, he's probably better waiting til he's settled with a job and knows where he'll need to travel to. He's in a financial position that most people would love to have so tell him not to jump into anything too quickly!


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