Is this a silly idea?

Slacky000

Bit of background info, for the last year or two I've been tempted to buy a 2 bed apartment somewhere that isn't too much of a commute from city centre of Dublin. The plan was to rent out a room to help me pay towards the mortgage.

I'm young enough (mid 20s)and have a decent deposit saved up. For the last few years I've been doing a fairly crazy commute and want to stop doing such long commutes in the near future.

I've started to realise that it's nearly impossible to get a 2 bed that'll give me a short commute (under 30 mins preferably to city centre) and now starting to think of getting a small 1 bed.

Benefits:

- since I have a savings, I'd only need to borrow a smallish amount and it'd mean my mortgage would be about 500 a month

- really short commute, could get somewhere in fairview for example

- maybe I could still get 2k or so cashback which wouldn't be bad if I only have to get a small enough mortgage (I'm sure the banks have this sussed out though)

Negatives:

- Not exactly future proof but I've no plans to have kids etc in the short to medium term.

- Can't take advantage of the rent a room scheme.

- Living by myself could be potentially lonely 😅

- I'm sure there's more such as losing some first time buyer reliefs but there doesn't seem to be much?

Is there anything else I'm missing out on do you think? I know it's a highly personal situation but maybe some people on here have done something similar. The way I'm starting to look at it is - 500 odd euro a month is very little so I think I should at least consider it.

airportgirl83

Why do you think it's nearly impossible to find a 2 bed with 30min commute?

Slacky000

airportgirl83 wrote: »

Why do you think it's nearly impossible to find a 2 bed with 30min commute?

Sorry I should have mentioned that I meant with 1 wage and looking for an apartment that's in a nice area / in decent nick.

how.gareth

Unless you have a rather large deposit or a rather good paying job I reckon you’ll struggle to get a mortgage for anything in Dublin!

Slacky000

how.gareth wrote: »

Unless you have a rather large deposit or a rather good paying job I reckon you’ll struggle to get a mortgage for anything in Dublin!

True. I've a large deposit and a relatively well paid job although I still feel fairly limited

how.gareth

Slacky000 wrote: »

True. I've a large deposit and a relatively well paid job although I still feel fairly limited

2 bed house goes in my estate for under €200k. In Blanchardstown , you would easily rent out our a room for €800 a month

Slacky000

I just realised I could get it down to 300 a month for this one bed by going 30 years rather than 20. It's almost like a most people's car loan then.

Mad_maxx

Slacky000 wrote: »

Bit of background info, for the last year or two I've been tempted to buy a 2 bed apartment somewhere that isn't too much of a commute from city centre of Dublin. The plan was to rent out a room to help me pay towards the mortgage.

I'm young enough (mid 20s)and have a decent deposit saved up. For the last few years I've been doing a fairly crazy commute and want to stop doing such long commutes in the near future.

I've started to realise that it's nearly impossible to get a 2 bed that'll give me a short commute (under 30 mins preferably to city centre) and now starting to think of getting a small 1 bed.

Benefits:

- since I have a savings, I'd only need to borrow a smallish amount and it'd mean my mortgage would be about 500 a month

- really short commute, could get somewhere in fairview for example

- maybe I could still get 2k or so cashback which wouldn't be bad if I only have to get a small enough mortgage (I'm sure the banks have this sussed out though)

Negatives:

- Not exactly future proof but I've no plans to have kids etc in the short to medium term.

- Can't take advantage of the rent a room scheme.

- Living by myself could be potentially lonely ��

- I'm sure there's more such as losing some first time buyer reliefs but there doesn't seem to be much?

Is there anything else I'm missing out on do you think? I know it's a highly personal situation but maybe some people on here have done something similar. The way I'm starting to look at it is - 500 odd euro a month is very little so I think I should at least consider it.

Provided it's not in an area with high levels of crime, I don't see anything wrong with it at all, what's your budget

Slacky000

Mad_maxx wrote: »

Provided it's not in an area with high levels of crime, I don't see anything wrong with it at all, what's your budget

I've seen one place for 135k which got me thinking about this idea

drunkmonkey

If you want to be near the city centre just buy in the city centre, cuts out commuting costs and should be easy rent in the future.

NSAman

drunkmonkey wrote: »

If you want to be near the city centre just buy in the city centre, cuts out commuting costs and should be easy rent in the future.

Errghhhh you have seen the prices in the city center? He isn’t a millionaire !

drunkmonkey

NSAman wrote: »

Errghhhh you have seen the prices in the city center? He isn’t a millionaire !

2 bed mountjoy square 200k. 1 bed Adelaide road 150k, that's not bad considering location.

Dolbhad

Because of the harder resale value of 1 bed apartments some banks require 20% deposit so worth bearing that in mind for your financing

Slacky000

Dolbhad wrote: »

Because of the harder resale value of 1 bed apartments some banks require 20% deposit so worth bearing that in mind for your financing

Yep I have that together. Have around 40% for a cheap 1 bed studio

Del2005

Slacky000 wrote: »

Bit of background info, for the last year or two I've been tempted to buy a 2 bed apartment somewhere that isn't too much of a commute from city centre of Dublin. The plan was to rent out a room to help me pay towards the mortgage.

I'm young enough (mid 20s)and have a decent deposit saved up. For the last few years I've been doing a fairly crazy commute and want to stop doing such long commutes in the near future.

I've started to realise that it's nearly impossible to get a 2 bed that'll give me a short commute (under 30 mins preferably to city centre) and now starting to think of getting a small 1 bed.

Benefits:

- since I have a savings, I'd only need to borrow a smallish amount and it'd mean my mortgage would be about 500 a month

- really short commute, could get somewhere in fairview for example

- maybe I could still get 2k or so cashback which wouldn't be bad if I only have to get a small enough mortgage (I'm sure the banks have this sussed out though)

Negatives:

- Not exactly future proof but I've no plans to have kids etc in the short to medium term.

- Can't take advantage of the rent a room scheme.

- Living by myself could be potentially lonely 😅

- I'm sure there's more such as losing some first time buyer reliefs but there doesn't seem to be much?

Is there anything else I'm missing out on do you think? I know it's a highly personal situation but maybe some people on here have done something similar. The way I'm starting to look at it is - 500 odd euro a month is very little so I think I should at least consider it.

How are you commuting? If you get a motorbike then loads of places are 30 minutes from the city center, even a pedal assisted bicycle would give you a bigger range to choose from.

I'd avoid the 1 bed if possible, even though you have no plans now there is plenty of people stuck in homes they thought would be fine until they suddenly find out that its not.

gar32

I done what you suggesting 12 years ago. Got a small 1 bed near the city which at the time was crazy money.

Fast forward 5 years later lost job and use redundancy to cut mortgage to €50k

2 years later married and moved to Germany.

Now renting out Dublin apartment to a couple paying 20% tax as I am a non resident.

Just finished mortgage and the rent I get covers my rent here in Germany.

I suggest going for it if you can.


Good luck.

handlemaster

OP , look around the Dublin 15 area in blanchardstown etc, you should be able to pick up a place for the lower end of prices

Slacky000

gar32 wrote: »

I done what you suggesting 12 years ago. Got a small 1 bed near the city which at the time was crazy money.

Fast forward 5 years later lost job and use redundancy to cut mortgage to €50k

2 years later married and moved to Germany.

Now renting out Dublin apartment to a couple paying 20% tax as I am a non resident.

Just finished mortgage and the rent I get covers my rent here in Germany.

I suggest going for it if you can.


Good luck.

Glad it worked out for you. Yeah I was thinking that even if I do need to get a better place in 5 or 10 years, I could probably have a decent amount of savings again (assuming the mortgage for the 1 bed will be only a few hundred a month) and potentially rent out the 1 bed.

Slacky000

Del2005 wrote: »

How are you commuting? If you get a motorbike then loads of places are 30 minutes from the city center, even a pedal assisted bicycle would give you a bigger range to choose from.

I'd avoid the 1 bed if possible, even though you have no plans now there is plenty of people stuck in homes they thought would be fine until they suddenly find out that its not.

Bus. It's currently an hour on the bus alone and walking around 30 mins on top each way.

sKeith

Del2005 wrote: »

How are you commuting? If you get a motorbike then loads of places are 30 minutes from the city center, even a pedal assisted bicycle would give you a bigger range to choose from.

I'd avoid the 1 bed if possible, even though you have no plans now there is plenty of people stuck in homes they thought would be fine until they suddenly find out that its not.

The people you say are stuck in 1 beds will remain stuck in them if people heeded this advise.


If everybody was to avoid 1 beds, then of course those people in one now would be forever stuck.

handlemaster

sKeith wrote: »

The people you say are stuck in 1 beds will remain stuck in them if people heeded this advise.


If everybody was to avoid 1 beds, then of course those people in one now would be forever stuck.

and ?

4ensic15

1 beds are very good from the point of view of rental. Most experienced landlords prefer them. Lettings are to couples who have two incomes, can afford the rent and generally take care of the place. If buying a 1 bed as an interim, the plan should be to save a deposit for the forever home and keep the 1 bed on as an investment. 300 a month repayments and about €150 a month service charge plus maintenance of apartment and appliances. The trick is to buy in a good block.

Del2005

Slacky000 wrote: »

Bus. It's currently an hour on the bus alone and walking around 30 mins on top each way.

You could cut that to about 20 minutes on motorbike. You can save more and afford better when you do buy

Slacky000

Del2005 wrote: »

You could cut that to about 20 minutes on motorbike. You can save more and afford better when you do buy

I'm not even in Dublin where I am now so there's no way it's 20 mins on a bike unfortunately.

I just realised the place that gave me this idea in the first place is a studio apartment that's 25m squared. Tiny tiny. Ouch

drunkmonkey

How much time and money are you spending on commuting? ie how much extra freetime you get a year and the cost of it. Is there a case for renting within waking distance to work?

Taylor365

I'm looking at this myself, aggressively paying off the one bed for 5 odd years then trying to trade up or possibly add a 2nd house.

Slim pickens though. I wouldn't go below 35sqm.

4ensic15

Taylor365 wrote: »

I'm looking at this myself, aggressively paying off the one bed for 5 odd years then trying to trade up or possibly add a 2nd house.

Slim pickens though. I wouldn't go below 35sqm.

It would be better to go for 45sqm. When the market goes soft the bigger unit will withstand the downturn better.

Slacky000

drunkmonkey wrote: »

How much time and money are you spending on commuting? ie how much extra freetime you get a year and the cost of it. Is there a case for renting within waking distance to work?

The cost isn't too bad in fairness but the time is a killer. 3 hours a day roughly. Could be, living at home with the parents at the minute. (which is why I've saved a lot, without that I'd be screwed)

drunkmonkey

If you had some way to get the cash together before getting the mortgage this could be worth looking at https://www.daft.ie/dublin/apartments-for-sale/dublin-8/15a-emmet-court-dublin-8-dublin-2031042
Looks like a bit of value size wise. Easy enough rent I'd assume.

4ensic15

drunkmonkey wrote: »

If you had some way to get the cash together before getting the mortgage this could be worth looking at https://www.daft.ie/dublin/apartments-for-sale/dublin-8/15a-emmet-court-dublin-8-dublin-2031042
Looks like a bit of value size wise. Easy enough rent I'd assume.

It is a tiny two bed. Anything would rent at the moment. When the market is soft it will be troublesome.

Rackstar

drunkmonkey wrote: »

If you had some way to get the cash together before getting the mortgage this could be worth looking at https://www.daft.ie/dublin/apartments-for-sale/dublin-8/15a-emmet-court-dublin-8-dublin-2031042
Looks like a bit of value size wise. Easy enough rent I'd assume.

You'd want to know why it's cash only. Will a bank not give a mortgage as there's problems with the apartment block?

copeyhagen

dont buy a one bed on a 30 year mortgage, you WILL meet someone eventually and everything wil lchange. and good luck getting a new mortgage when you have 25 years elft on a 1 bed place.

Slacky000

drunkmonkey wrote: »

If you had some way to get the cash together before getting the mortgage this could be worth looking at https://www.daft.ie/dublin/apartments-for-sale/dublin-8/15a-emmet-court-dublin-8-dublin-2031042
Looks like a bit of value size wise. Easy enough rent I'd assume.

Looks decent alright. The cash only thing is bizarre.

4ensic15

Rackstar wrote: »

You'd want to know why it's cash only. Will a bank not give a mortgage as there's problems with the apartment block?

There is title trouble with that complex. One of the blocks sold on Bidx1 a few months ago.

douglashyde

I was literally in your situation 8 years ago.

Working a well paid job and in early 20s and looking but unable to afford a 2-bed in an area I liked.

I ended up purchasing a one-bed apartment in the centre of Rathmines (prices were about 30% lower then).

I'm personally glad I got the one-bed in a central/fun/nice area instead of going for the economical option of a 2-bed.

Living alone was a lot of fun and it's likely the only time you'll ever get to do it, enjoy it.

You've done the math, it's affordable, you get one go around so buy somewhere you'll enjoy living and won't leave you spending half your day commuting.

Fast forward 8 years, I've recently sold apartment and bought a house. I personally don't think directly owning investment property is a good investment v.s. other options (REITs). Point is, assuming there isn't a massive crash in prices, you can sell the 1-bed and upgrade in 5,10,15 years.

ArtyC

Slacky000 wrote: »

Looks decent alright. The cash only thing is bizarre.

This would be a nightmare to sell and you upgrade later
Most wil need a mortgage to buy

The_Conductor

gar32 wrote: »

I done what you suggesting 12 years ago. Got a small 1 bed near the city which at the time was crazy money.

Fast forward 5 years later lost job and use redundancy to cut mortgage to €50k

2 years later married and moved to Germany.

Now renting out Dublin apartment to a couple paying 20% tax as I am a non resident.

Just finished mortgage and the rent I get covers my rent here in Germany.

I suggest going for it if you can..

If you are 'ordinarily resident' in Germany, you are subject to unlimited tax liability and must pay tax on your worldwide income, including rental income there.

Ireland has a reciprochal tax agreement with Germany- whereby you can offset the tax due on your Irish rental income in Germany- by the amount of withholding tax paid on your Irish rental income- in Ireland.

You can't just use your Irish rental income to pay your rent in Germany- though it would be nice if you could.

If you have not approached a tax specialist in Germany yet- you really need to do so- as you have an undeclared liability.

Lux23

I wouldn't do this. Find a nice place to rent in the city centre and keep your savings for when you're ready to buy a house.

Slacky000

douglashyde wrote: »

I was literally in your situation 8 years ago.

Working a well paid job and in early 20s and looking but unable to afford a 2-bed in an area I liked.

I ended up purchasing a one-bed apartment in the centre of Rathmines (prices were about 30% lower then).

I'm personally glad I got the one-bed in a central/fun/nice area instead of going for the economical option of a 2-bed.

Living alone was a lot of fun and it's likely the only time you'll ever get to do it, enjoy it.

You've done the math, it's affordable, you get one go around so buy somewhere you'll enjoy living and won't leave you spending half your day commuting.

Fast forward 8 years, I've recently sold apartment and bought a house. I personally don't think directly owning investment property is a good investment v.s. other options (REITs). Point is, assuming there isn't a massive crash in prices, you can sell the 1-bed and upgrade in 5,10,15 years.

Interesting. Glad it worked out for you, your position is similar to mine alright. I agree about it being a poor enough investment but eventually I'll need a place. Have all my money in shares at the moment. Some people think that's too risky but it has done me very well over the years.

douglashyde

I honestly wouldn't worry to much about the growth potential of your residential property, if you can afford it (within a stress tested situation) then enjoy it.

However, if you were to consider this from a different angle (investment opps) - it's difficult to find high growth / low risk assets.

Why? We're in the longest bull run (equity market) in history and likely approaching an end, personally I am bearish about markets in short term and have moved my investments (not pension funds) into gold, bonds and crypto (crypto purely because of it's risk/reward ratio pay off, not because it's safe/prudent)