Planning ahead

Mad_maxx

Hi there

Currently live in a house worth circa 230 k, it's in a rural location but is close to a commuter town for Galway, hope to move to the city in five years time and sell current residence, have 150 k in cash and would be hoping to borrow 250 k, for specific family reasons, cannot move for now

Can't help but wonder however if where we live has hit a ceiling and the gulf between here and the city will widen as time passes, as such we were thinking of buying in town now and just letting out for a number of years, risk of course is that if a sharp correction occurs, you still have a mortgage but also a rural property you might struggle to shift due to reduced demand and lending

I guess what I'm wondering is if you should only sell today if you plan to buy tomorrow?, is anything else speculation about forces beyond your control?

Where we currently live has excellent rental demand but that's purely down to the city being chronically short

JJJackal

Mad_maxx wrote: »

Hi there

Currently live in a house worth circa 230 k, it's in a rural location but is close to a commuter town for Galway, hope to move to the city in five years time and sell current residence, have 150 k in cash and would be hoping to borrow 250 k, for specific family reasons, cannot move for now

Can't help but wonder however if where we live has hit a ceiling and the gulf between here and the city will widen as time passes, as such we were thinking of buying in town now and just letting out for a number of years, risk of course is that if a sharp correction occurs, you still have a mortgage but also a rural property you might struggle to shift due to reduced demand and lending

I guess what I'm wondering is if you should only sell today if you plan to buy tomorrow?, is anything else speculation about forces beyond your control?

Where we currently live has excellent rental demand but that's purely down to the city being chronically short

Is the 150k cash coming from the sale of the 230k house? If you fully own the 230k house and have 150k cash getting a mortgage now does not sound like a bad idea. You could do the rent a room in your new city home (even if you or a member of your family only stayed there a few nights a week) and occupy a room in the house - which will prevent anyone destroying/overholding ... your house

Edit - 400k will give you a good selection of houses you could buy in Galway City

Mad_maxx

JJJackal wrote: »

Is the 150k cash coming from the sale of the 230k house? If you fully own the 230k house and have 150k cash getting a mortgage now does not sound like a bad idea. You could do the rent a room in your new city home (even if you or a member of your family only stayed there a few nights a week) and occupy a room in the house - which will prevent anyone destroying/overholding ... your house

We own the house we currently live in debt free and also have 150 k in cash

Very interesting idea re_ rent a room

JJJackal

Mad_maxx wrote: »

We own the house we currently live in debt free and also have 150 k in cash

Very interesting idea re_ rent a room

You could apply for your mortgage now and start looking. If you have 5 years you can wait until the house you want in the place you want becomes available - however that house might be available today and not again over the next 5 years (lets say you wanted to buy in only one small estate in Salthill as an example).

Worth getting wheels in motion IMO.

Nobody knows if house prices will rise or fall or stay the same. The only evidence is if you own a house long enough it will be worth more than you paid for it.

voluntary

Consider getting a mortgage for a new house, buy it, move to the new home and put the old one on sale immediatelly, sell it ASAP to minimize the risk of the market crashing in the meantime and to minimize the risk of getting stuck with unsellable second property. Pay the mortgage for 1-2 years term of fixed rates and then pay off the mortgage from the sale preceedings as soon as the bank lets you do so without imposing a penalty for quitting early.

Or.. if the rents in your area are low, just rent a place for a year or so, sell the house and start hunting with cash for a new one living in a rented accomodation. Move to your own place as soon as you buy it.

antiskeptic

I definitely wouldn't recommend speculating on houses. So wouldn't have two at the same time. A mate bought for 2 mill at peak and expected to get 1.5 for his other house. Bridging loan for the interim. He sold for 1.25mil - driven by the cost of the bridging loan into selling quickly. Lucky for him - if he hadn't he'd have been on the hook all the way down.


Your out of town house might well be appreciating faster than the city since price flattening, due to lending restrictions occurs in prime areas first. Witness negative growth in SCD for instance. As folk are forced out, prices in outlying areas rise whilst inner areas stagnate. Eventually equilibrium will occur. You'd have to research / talk to agents / track asking vs. obtained prices

We are also a good deal beyond due date for the next recession. We're at 9 years of growth when 7 years is the typical time between recessions. And winds of recession are there globally. The chances that you'll dodge a recession in the coming years is low: which will not only effect the sale value of your existing home but it's rentability.

Sell today / buy tomorrow is the way to go with your own home. Not speculation.