Looking to buy an Apartment

BalHouseBuyer

Hi Boards users

I'm looking to my purchase my first property. I currently live with my parents, and I feel the time is right for me.

The property I'm looking at is a 2 bed in a Dublin suburb. It's been in the market since June/July. I called the estate agent this morning, and he said the house isn't sale agreed, and no open viewing are planned.

It's asking 225K, but I feel I could get it for closer to 200. The interest seems to be low, going by the phone call, and open viewings I attended when it was originally listed. The property is around the corner from where I live with my parents currently, so is ideal in terms of the DART line and socialising.

Finance wise, I'm 26, I earn 55K a year and I have savings of 80K. So I would qualify for a mortgage waist enough, and I wouldn't have to pay rent. It seems like a good buy.

Would there be any drawbacks to buying an apartment in the current climate, or should I go ahead and do it. I'm thinking about meeting with a financial advisor.

MrMorooka

225 for a 2bed in Dublin seems really cheap, where is this?

seamus

Normally my answer to these is "not in a million years sonny Jim", but in your case you seem to be in exceptionally good shape.

Let's split the difference and say you got it for €215k. €80k savings, means a mortgage of 135k. Get it over 20 years, and you're looking at ~€750/month repayments, which is about 23% of your take-home. Which is not too shabby. About half of what renting would cost.

The reason I typically say "no" to these things is because you're probably going to end up moving on from here in 3-5 years. You'll be surprised where life takes you. Chances are within five years you'll meet someone and be discussing marriage, and so thinking about a house with a garden and all that.
If you mortgage the sh1t out of yourself buying an apartment, then you find that you've actually paid off very little of the principle in five years and may not have the means to move on.
Or worse, as many people found, prices drop and you're badly stuck with an apartment you can't sell.

In your case, you can go for a 20 year mortgage (or even 15 years if you can get the apartment for €200k; lower LTV) and by the time you're thirty you'll owe about 100 grand on it. Worse case scenario, if prices dropped again by 40%, you'd still have €20k equity in the place to move onto something else. More likely scenario in the current climate is that the property will be worth €240k by 2020 and you'll have about €115k in equity.

The main thing to watch out for is why the apartment is still unsold. Are there title issues - e.g. management company struck off or in default? Are their structural issues like pyrite? Is the seller badly in negative equity and will the sale be tied for months up by bank meetings? Are the management fees insane? The management fee has no relation to the apartment value. I've seen €120k apartments with €3k management fees.

But yes, I think in your case it's worth talking to a financial advisor and exploring your options.

Whatever you do, do not "borrow as much as they will give you". It was bad advice in 2006 and it's still bad advice now. Borrow the minimum that you need.

LincolnHawk

Why do you think you'll get it 20k under the asking?
How is the bidding going?

Claw Hammer

Is there parking? A lift? what are the service charges like. Is there an efficient management agent?

yosser hughes

BalHouseBuyer wrote: »

Hi Boards users

I'm looking to my purchase my first property. I currently live with my parents, and I feel the time is right for me.

The property I'm looking at is a 2 bed in a Dublin suburb. It's been in the market since June/July. I called the estate agent this morning, and he said the house isn't sale agreed, and no open viewing are planned.

It's asking 225K, but I feel I could get it for closer to 200. The interest seems to be low, going by the phone call, and open viewings I attended when it was originally listed. The property is around the corner from where I live with my parents currently, so is ideal in terms of the DART line and socialising.

Finance wise, I'm 26, I earn 55K a year and I have savings of 80K. So I would qualify for a mortgage waist enough, and I wouldn't have to pay rent. It seems like a good buy.

Would there be any drawbacks to buying an apartment in the current climate, or should I go ahead and do it. I'm thinking about meeting with a financial advisor.

who's who here?
Anyway, where in South Dublin near the dart is this? Seems cheap and why ain't it selling?

BalHouseBuyer

MrMorooka wrote: »

225 for a 2bed in Dublin seems really cheap, where is this?

I'd rather not say the exact location. But it's a suburb along the northbound DART line.

seamus wrote: »

Normally my answer to these is "not in a million years sonny Jim", but in your case you seem to be in exceptionally good shape.

Let's split the difference and say you got it for €215k. €80k savings, means a mortgage of 135k. Get it over 20 years, and you're looking at ~€750/month repayments, which is about 23% of your take-home. Which is not too shabby. About half of what renting would cost.

The reason I typically say "no" to these things is because you're probably going to end up moving on from here in 3-5 years. You'll be surprised where life takes you. Chances are within five years you'll meet someone and be discussing marriage, and so thinking about a house with a garden and all that.
If you mortgage the sh1t out of yourself buying an apartment, then you find that you've actually paid off very little of the principle in five years and may not have the means to move on.
Or worse, as many people found, prices drop and you're badly stuck with an apartment you can't sell.

In your case, you can go for a 20 year mortgage (or even 15 years if you can get the apartment for €200k; lower LTV) and by the time you're thirty you'll owe about 100 grand on it. Worse case scenario, if prices dropped again by 40%, you'd still have €20k equity in the place to move onto something else. More likely scenario in the current climate is that the property will be worth €240k by 2020 and you'll have about €115k in equity.

The main thing to watch out for is why the apartment is still unsold. Are there title issues - e.g. management company struck off or in default? Are their structural issues like pyrite? Is the seller badly in negative equity and will the sale be tied for months up by bank meetings? Are the management fees insane? The management fee has no relation to the apartment value. I've seen €120k apartments with €3k management fees.

But yes, I think in your case it's worth talking to a financial advisor and exploring your options.

Whatever you do, do not "borrow as much as they will give you". It was bad advice in 2006 and it's still bad advice now. Borrow the minimum that you need.

Thanks for all your advice. I have really enjoyed it. I will not be taking a 100% mortgage. Never will. I feel like I should buy something now, but not anything. I like this place do to the fact, I'm leaving in the same estate as my parent are in now, and one of my best mates live with his dad about 30 seconds away.

LincolnHawk wrote: »

Why do you think you'll get it 20k under the asking?
How is the bidding going?

It has been listed since early July. There were a few open viewings then, but none since.
I attended the open viewings, and interest was low. The estate agent said there is currently no bid on the place.

Claw Hammer wrote: »

Is there parking? A lift? what are the service charges like. Is there an efficient management agent?

Yes, there's parking. 1 underground, and 1 above ground. No lift, but there's no need. It's a duplex, rather than an apartment in a complex tbh. The management company is good and cheap.

I live in the estate currently with my parents, so no major investigation needs to be done.

yosser hughes wrote: »

who's who here?
Anyway, where in South Dublin near the dart is this? Seems cheap and why ain't it selling?

Not south Dublin. North side of the DART line.

Not sure why it isn't selling. But the estate agent has confirmed there are no current bids.

traveller0101

A duplex in a good location for 225K? What year is it?

Klonker

OP, I think I know the place you're talking about, I went to one of the viewings too but was a little small for my personal needs, especially the kitchen/living room. I agree that I think you may be able to get it a bit closer to 200k though obviously depends on how much the vendor wants to sell. I think they're pushing the boundaries calling it a duplex though

I agree it's a great area, I'm currently renting and will also be buying in the area shortly. I think you are in great position with your savings and salary and the area is a big advantage to you so if you can get the price down a bit Id say go for it. You could else rent out the other room tax free if you don't mind sharing.

Wesser

I smell a rat here.

seamus

seamus wrote: »

Normally my answer to these is "not in a million years sonny Jim", but in your case you seem to be in exceptionally good shape.

Let's split the difference and say you got it for €215k. €80k savings, means a mortgage of 135k. Get it over 20 years, and you're looking at ~€750/month repayments, which is about 23% of your take-home. Which is not too shabby. About half of what renting would cost.

The reason I typically say "no" to these things is because you're probably going to end up moving on from here in 3-5 years. You'll be surprised where life takes you. Chances are within five years you'll meet someone and be discussing marriage, and so thinking about a house with a garden and all that.
If you mortgage the sh1t out of yourself buying an apartment, then you find that you've actually paid off very little of the principle in five years and may not have the means to move on.
Or worse, as many people found, prices drop and you're badly stuck with an apartment you can't sell.

In your case, you can go for a 20 year mortgage (or even 15 years if you can get the apartment for €200k; lower LTV) and by the time you're thirty you'll owe about 100 grand on it. Worse case scenario, if prices dropped again by 40%, you'd still have €20k equity in the place to move onto something else. More likely scenario in the current climate is that the property will be worth €240k by 2020 and you'll have about €115k in equity.

The main thing to watch out for is why the apartment is still unsold. Are there title issues - e.g. management company struck off or in default? Are their structural issues like pyrite? Is the seller badly in negative equity and will the sale be tied for months up by bank meetings? Are the management fees insane? The management fee has no relation to the apartment value. I've seen €120k apartments with €3k management fees.

But yes, I think in your case it's worth talking to a financial advisor and exploring your options.

Whatever you do, do not "borrow as much as they will give you". It was bad advice in 2006 and it's still bad advice now. Borrow the minimum that you need.

Always go for the longest term mortgage you can, 30 years or even 35 in the ops case is possible. You can overpay on that to a rate the would pay it off in 15 or 20 years but you always have the option to fall back on the lower repayment if required an option you don't have on a shorter term mortgage.

Also I'd be doing the calculation with keeping at least 20k of the savings if not more. Using up all your savings is a very bad idea.

Klonker

Wesser wrote:

I smell a rat here.

What do you mean by that?

Wesser

I think this OP has put up a similar post before. Maybe I'm wrong but that's my gut instinct.

BalHouseBuyer

Wesser wrote: »

I think this OP has put up a similar post before. Maybe I'm wrong but that's my gut instinct.

No, I haven't.

BalHouseBuyer

MrMorooka wrote: »

225 for a 2bed in Dublin seems really cheap, where is this?

seamus wrote: »

Normally my answer to these is "not in a million years sonny Jim", but in your case you seem to be in exceptionally good shape.

Let's split the difference and say you got it for €215k. €80k savings, means a mortgage of 135k. Get it over 20 years, and you're looking at ~€750/month repayments, which is about 23% of your take-home. Which is not too shabby. About half of what renting would cost.

The reason I typically say "no" to these things is because you're probably going to end up moving on from here in 3-5 years. You'll be surprised where life takes you. Chances are within five years you'll meet someone and be discussing marriage, and so thinking about a house with a garden and all that.
If you mortgage the sh1t out of yourself buying an apartment, then you find that you've actually paid off very little of the principle in five years and may not have the means to move on.
Or worse, as many people found, prices drop and you're badly stuck with an apartment you can't sell.

In your case, you can go for a 20 year mortgage (or even 15 years if you can get the apartment for €200k; lower LTV) and by the time you're thirty you'll owe about 100 grand on it. Worse case scenario, if prices dropped again by 40%, you'd still have €20k equity in the place to move onto something else. More likely scenario in the current climate is that the property will be worth €240k by 2020 and you'll have about €115k in equity.

The main thing to watch out for is why the apartment is still unsold. Are there title issues - e.g. management company struck off or in default? Are their structural issues like pyrite? Is the seller badly in negative equity and will the sale be tied for months up by bank meetings? Are the management fees insane? The management fee has no relation to the apartment value. I've seen €120k apartments with €3k management fees.

But yes, I think in your case it's worth talking to a financial advisor and exploring your options.

Whatever you do, do not "borrow as much as they will give you". It was bad advice in 2006 and it's still bad advice now. Borrow the minimum that you need.

LincolnHawk wrote: »

Why do you think you'll get it 20k under the asking?
How is the bidding going?

Claw Hammer wrote: »

Is there parking? A lift? what are the service charges like. Is there an efficient management agent?

Foster Witty Underpants wrote: »

Always go for the longest term mortgage you can, 30 years or even 35 in the ops case is possible. You can overpay on that to a rate the would pay it off in 15 or 20 years but you always have the option to fall back on the lower repayment if required an option you don't have on a shorter term mortgage.

Also I'd be doing the calculation with keeping at least 20k of the savings if not more. Using up all your savings is a very bad idea.

Thanks for the advice. I will take it on board.

I don't mind staying with my parents for another year or so. If i build up another chunk of savings, I will happy enough.

It doesn't have to be this apartment per say, but recently, plenty from this estate, and the adjoining estate have been listed.

Graham

Mod Note thread temporarily closed pending review.