Good buying property advisor

foxrabbit

Hi,

My bf and myself went sale agreed on an apartment near Smithfield (close to the square/luas). The initial exicement has started fading away and now we are worried if we made the right decision to buy now, especially after seeing the recent property stats (flatline / downward sloping) in the news.

Are there any good property advisors that we can speak to? We were thinking of going to a different property agent, but they might not help much if we went sale agreed with their competitor?

We are currently both renting and paying "market rent". For us, the plan is to live in this apartment, save the rent money, and then upgrade to a house in a couple of years' time. All of our savings are going into the apartment plus a hefty mortgage from the bank. It's scary to think if a crash is coming and we could be left with negative equity for the next whatever number of years!

Another worrying thing was that we were the only bidder for the property at the time. We bid below the ask price and below the level where other apartments in the development were sold per PPR. The other apartment in the development (better presented / better condition) for sale at the same time movely very quickly. Another buyer we met at a viewing mentioned that some big investors were snapping up the apartments in the development. So maybe investors don't find our apartment attractive due to RPZ cheap rent and families don't like it due to its location?

Anyway it's time for us to get professional advices. Any suggestions of good advisors would be appreciated!

Bigmac1euro

IMO purchasing now is not a good time. It feels like there is a lot of uncertainty of how things will go for the next few years. Especially with brexit etc. The market seems to be at tipping point and we seem to be hitting the ceilings in terms of price but this is mainly because people can’t afford the property they want and this is due to the central bank rules of 3.5x which is a good thing.
We will either sit like this for the next few years or start slowly going back down. I can’t see the prices going up any further but again I could be wrong I’ve just being watching closely for the last 2 years but also doing my research as well.

The important thing is, is the right time for you ? Are your mortgage payments affordable ?
Is the mortgage much less than the rent ?

You only get 1 shot at being a FTB with the 10% so maybe hold out until you have more money saved and look at a more foreverish place to buy.

I wouldn’t dream of buying an apartment unless I was single. Again this is just my own thing.

Hope it all works out whatever you do.

Wexforllion

foxrabbit wrote: »

Hi,

My bf and myself went sale agreed on an apartment near Smithfield (close to the square/luas). The initial exicement has started fading away and now we are worried if we made the right decision to buy now, especially after seeing the recent property stats (flatline / downward sloping) in the news.

Are there any good property advisors that we can speak to? We were thinking of going to a different property agent, but they might not help much if we went sale agreed with their competitor?

We are currently both renting and paying "market rent". For us, the plan is to live in this apartment, save the rent money, and then upgrade to a house in a couple of years' time. All of our savings are going into the apartment plus a hefty mortgage from the bank. It's scary to think if a crash is coming and we could be left with negative equity for the next whatever number of years!

Another worrying thing was that we were the only bidder for the property at the time. We bid below the ask price and below the level where other apartments in the development were sold per PPR. The other apartment in the development (better presented / better condition) for sale at the same time movely very quickly. Another buyer we met at a viewing mentioned that some big investors were snapping up the apartments in the development. So maybe investors don't find our apartment attractive due to RPZ cheap rent and families don't like it due to its location?

Anyway it's time for us to get professional advices. Any suggestions of good advisors would be appreciated!

Is it a two or three bed?
Is it a duplex?
How much did you pay?
Is your alternative to rent?
Any kids soon?

Wexforllion

In this game one professional advisor will tell you one thing, another the opposite.

No harm to chat but I think ultimately you need to come to your own conclusions.

stdidit

How much are you going to save each month by doing this? If you're really thinking of buying a house in two years, then you have to do the maths and see if the saving is significant enough to make it worth putting all your savings into.
It sounds risky to me, especially if you are intent on buying again in a couple of years, not to mention the hassle of buying, selling and buying again.
Are there any other less risky ways you can save money for a couple of years like moving further out to reduce rent and commute or sell a car or lifestyle adjustments?

foxrabbit

Bigmac1euro wrote: »

IMO purchasing now is not a good time. It feels like there is a lot of uncertainty of how things will go for the next few years. Especially with brexit etc. The market seems to be at tipping point and we seem to be hitting the ceilings in terms of price but this is mainly because people can’t afford the property they want and this is due to the central bank rules of 3.5x which is a good thing.
We will either sit like this for the next few years or start slowly going back down. I can’t see the prices going up any further but again I could be wrong I’ve just being watching closely for the last 2 years but also doing my research as well.

The important thing is, is the right time for you ? Are your mortgage payments affordable ?
Is the mortgage much less than the rent ?

You only get 1 shot at being a FTB with the 10% so maybe hold out until you have more money saved and look at a more foreverish place to buy.

I wouldn’t dream of buying an apartment unless I was single. Again this is just my own thing.

Hope it all works out whatever you do.

Yeah the mortgage is affordable & cheaper than rent, that's why we wanted to move from renting to buying.

I'm certainly not looking for a capital gain from the purchase (not at this time!), but just hoping the price doesn't drop by more than 15% in the next ~5 years such that we'll at least break-even (fingers crossed!)

Bigmac1euro

foxrabbit wrote: »

Yeah the mortgage is affordable & cheaper than rent, that's why we wanted to move from renting to buying.

I'm certainly not looking for a capital gain from the purchase (not at this time!), but just hoping the price doesn't drop by more than 15% in the next ~5 years such that we'll at least break-even (fingers crossed!)

If it was me I wouldn’t take the risk. It seems like a risky time to buy although when isn’t ??
I’d rather put my risk into a house rather than an apartment with the intention of moving from apartment to house in a few years as someone already said you could get stuck with the apartment though in Smithfield this is probably unlikely. It’s a tough decision to make OP.
I wouldn’t if I was in your shoes though. Just my two cents.

foxrabbit

stdidit wrote: »

How much are you going to save each month by doing this? If you're really thinking of buying a house in two years, then you have to do the maths and see if the saving is significant enough to make it worth putting all your savings into.
It sounds risky to me, especially if you are intent on buying again in a couple of years, not to mention the hassle of buying, selling and buying again.
Are there any other less risky ways you can save money for a couple of years like moving further out to reduce rent and commute or sell a car or lifestyle adjustments?

It's a large 2 bed 2 bath. We'll be renting out the 2nd bedroom (ensuite) to the friend who I'm currently renting with. Her rent will pay off the mortgage interet / management fees / property tax. This should give us an extra saving of over 10k per year which is good.

We've invested in stocks / ETFs, but without actively managing the portfolio the return isn't much.

Changing job(s) might be something we could look at. There are better paid roles in the same profession but the work would not be as interesting. It's still something to consider though.

riclad

Advisers cannot see the future, what will happen with brexit,
will interest rates go up.will the housing crisis slow down the economy.?
IF i had a mortage of 1200 a month, i try and pay 1500 per month,
pay it off a bit early.Rather than spending money on stock investments .

In a few years interest rates could rise ,making your mortgage more expensive.



https://www.irishexaminer.com/breakingnews/ireland/house-prices-jumped-by-almost-3-in-2019-report-914441.html

IF i was buying now i,d buy maybe a 2 bed house,
theres no service charges on house,s .
theres property tax and basic maintenance .
If you buy a house ,there wont be anyone living above you,
or below you.
i dont see any sign of houe prices,in ireland falling at the moment.
When you buy property you have to think in terms of 10- 20 years .
Its a long term investment .

wally79

foxrabbit wrote: »

It's a large 2 bed 2 bath. We'll be renting out the 2nd bedroom (ensuite) to the friend who I'm currently renting with. Her rent will pay off the mortgage interet / management fees / property tax. This should give us an extra saving of over 10k per year which is good.

We've invested in stocks / ETFs, but without actively managing the portfolio the return isn't much.

Changing job(s) might be something we could look at. There are better paid roles in the same profession but the work would not be as interesting. It's still something to consider though.

I may have read incorrectly but are you and boyfriend currently renting separately?

Wouldn’t renting 1 place with boyfriend and current flat mate give you the same or similar saving potential but without the commitment?

riclad

whether you buy a house or an apartment is up to you,
its better to buy something,
I know a friend she had money to buy an apartment,
waited 3 years, now she cant buy one ,as prices went up beyond her
ability to buy one.
At least in the area where she wanted to live.

Jack_92

I'm in a similar position as you. Purchasing a two bed apartment in D8. Although there is a risk associated with the purchase in the end of the day I'll be better off paying off my mortgage than someone else's. I have been renting a place for 1200 a month for three years. That's 36k. Now even if hypothetically the property's value dropped by 30%, if I kept paying my mortgage repayments for the next 10 years nearly half of it would be paid off and only 12 years of mortgage repayments would be left and presuming no negative equity at that point (hopefully). Or else I can keep paying my rent and hoping the prices will drop in 1, 2, 3 or more years. There is a lot of negative views here. There is many factors needed to be cosdered while purchasing in today's market and in my case it was paying high rent for a long time as well as location that made my mind up. Similar to you I'm planning to rent a room to balance the finances for the first couple of years. I don't think you should be worried too much if the prices drop. You won't have any and I mean any problems renting your place if it's in Smithfield. If you wanted to move abroad for a while it's also easier to rent an apartment than a house and it requires less maintenance. Regarding management fees: you will always encounter costs associated with owning a property whether it's a monthly payment or a lump sum once in 5 years. There is a lot negativity about buying a property yet two years ago people here were also advising to wait and the prices went up... No one know how the market continue , if you are able to afford repayments, place is in a good location and if you are planning to keep it for a couple of years then go for it

mickdw

I would advise anyone to go for a house if at all possible.
Apartments are messy with the way the title is. You have management fees and no control over the structure of the building you have just bought.
You can quickly outgrow an apartment and if the market took a downturn you would find yourself stuck there. With a house, even if you bought a small house, you could always look at a small extension or attic conversion. You just have more options.

foxrabbit

foxrabbit wrote: »

Yeah the mortgage is affordable & cheaper than rent, that's why we wanted to move from renting to buying.

I'm certainly not looking for a capital gain from the purchase (not at this time!), but just hoping the price doesn't drop by more than 15% in the next ~5 years such that we'll at least break-even (fingers crossed!)

Nobody can tell you if this will or won't happen, and anyone who tries with any certainty should not be listened to under any circumstances.

Lumen

Put the different scenarios into a spreadsheet and figure out the probability of each one.

Example...

Target house currently costs 500k.

Apartment bought for 300k with 270k mortgage. Average interest over 5 years is 700/mo compared to 1700 rent, so have gained 60k equity (90k total).

Market drops 20%, apartment worth 240k. Still have 30k equity but no FTB exemption, but house is now 400k.

Are you much worse off? Not really.

Now run it with a 20% market rise...

Baby01032012

My background is an accountant, I’m also work in the property business.

Based on what you said OP I would hold off buying and hold out for that long term home in a couple of years. If you’re buying the apartment as your forever home go ahead as the ups and downs of the market will not impact you in the long term.
However if your buying as a stepping ladder in hope that you will gain some appreciation in value in hope that paying off mortgage v renting will give you some leverage when you go to buy that forever home - it’s a large risk. No advisor can predict how the economy or property will perform in the short term. There are big risks out there globally and with brexit which are an unknown. I Personally think the property market has reached its height with CBI lending and supply coming on board you will not see values increasing above inflation in the next few years. As frustrating as it is paying rent and unlike property prices rent will continue to increase significantly I would hold off purchasing.

riclad

That advice makes no sense to me, unless you believe house prices will
fall in the next 3 years .
He says he thinks house prices will go up in line with inflation.
say you wait 2 years to buy ,
that means 2 years of renting,cost maybe 20k,
My advice is buy this year .
buy a house or apartment at a reasonable price.
the banks have strict rules on lending .
I think in dublin we are close to the peak of house prices,
but prices could still rise by 3-4 per cent per year .
if you can afford to buy now and are in long term employment
you should buy this year.

Baby01032012

riclad wrote: »

That advice makes no sense to me, unless you believe house prices will
fall in the next 3 years .
He says he thinks house prices will go up in line with inflation.
say you wait 2 years to buy ,
that means 2 years of renting,cost maybe 20k,
My advice is buy this year .
buy a house or apartment at a reasonable price.
the banks have strict rules on lending .
I think in dublin we are close to the peak of house prices,
but prices could still rise by 3-4 per cent per year .
if you can afford to buy now and are in long term employment
you should buy this year.

I don’t know who HE is. Anyway, So what basis do you have for your opinion? Just curious based on your experience etc..

Why should someone buy in at the top of the market to a property they have no intention of living in long term? It’s a huge risk on such a large investment which it is when it’s not a forever home, where the market will go over next few years.

Prices may drop they may not be able to sell, you’ve got legal costs and stamp duty an need for an increased deposit of 20% as they will not be a first time buyer.

TheDalioLama

Jack_92 wrote: »

I'm in a similar position as you. Purchasing a two bed apartment in D8. Although there is a risk associated with the purchase in the end of the day I'll be better off paying off my mortgage than someone else's. I have been renting a place for 1200 a month for three years. That's 36k. Now even if hypothetically the property's value dropped by 30%, if I kept paying my mortgage repayments for the next 10 years nearly half of it would be paid off and only 12 years of mortgage repayments would be left and presuming no negative equity at that point (hopefully). Or else I can keep paying my rent and hoping the prices will drop in 1, 2, 3 or more years. There is a lot of negative views here. There is many factors needed to be cosdered while purchasing in today's market and in my case it was paying high rent for a long time as well as location that made my mind up. Similar to you I'm planning to rent a room to balance the finances for the first couple of years. I don't think you should be worried too much if the prices drop. You won't have any and I mean any problems renting your place if it's in Smithfield. If you wanted to move abroad for a while it's also easier to rent an apartment than a house and it requires less maintenance. Regarding management fees: you will always encounter costs associated with owning a property whether it's a monthly payment or a lump sum once in 5 years. There is a lot negativity about buying a property yet two years ago people here were also advising to wait and the prices went up... No one know how the market continue , if you are able to afford repayments, place is in a good location and if you are planning to keep it for a couple of years then go for it

I'm also in a similar position being sale agreed on a two bed two bath apartment and am thinking along the above lines.

OP- if you're ok with staying in the apartment up to 5 years, I don't believe the risk is that high. You'll have a much improved cashflow position from taking in rent tax free to pay the mortgage (allowing you to build up further savings) Vs continuing to pay rent. Also, the chances are that prices in a location like smithfield would be some of the first to rebound following a hypothetical crash.

SozBbz

TheDalioLama wrote: »

I'm also in a similar position being sale agreed on a two bed two bath apartment and am thinking along the above lines.

OP- if you're ok with staying in the apartment up to 5 years, I don't believe the risk is that high. You'll have a much improved cashflow position from taking in rent tax free to pay the mortgage (allowing you to build up further savings) Vs continuing to pay rent. Also, the chances are that prices in a location like smithfield would be some of the first to rebound following a hypothetical crash.

I might be a lone(ish) voice in saying this but I really don't see a crash coming.

I think our trouble is that many in Ireland of a certain age have only really ever experienced the property makert doing two things. Rapid Growth and Rapid Decline.

Neither of which are normal in my view. The growth can be attributed to our going from being a poor economy to a relatively rich one -Ireland saw prosperity from the late 90's until 2007. Thats a once off phenomenon.

Then we found ourselves hugely exposed to a world wide economic crash, due to the level of endebtedness of households. Prices tumbled, as jobs were lost and repayments became untennable. People saw negative equity for the first time in their lifetimes.

Then in recent years as the real economy recovered, inward investment and migration began to boom, the demand for housing soared. Plenty of pent up demand from Irish people who'd been reluctant to commit previously and we saw house price inflation again.

Some people now seem to think that this is how the market will behave in future, but I disagree. I think for the first time in forever, the market might actually start to behave somewhat normally. I caveat htis by sayign that his only applies if the Central Bank rules are maintainted. They're fantastic in my view and a welcome moderating factor in our housing market.

We still have a supply issue, new builds are not coming on stream fast enough. The economy is strong (Brexit aside) and demand for housing is strong as evidenced by the rental sector.

In my view what we're seeing now was inevitable. Prices were always going to ease off, maybe even drop a few %. Thats normal and not indicative of a massive 2008 style crash. People still want to buy property, theres just a limit to what they can pay. The fundamental demand factors are still strong, its not going to suddenly fall through the floor.

I agree with those saying to only buy something you could see yourself living in for 5 years or so.

I'm also currently in the process of buying, having first bought in 2015. The market is less crazy now but thats not a bad thing. The difference between us is that Im buying the forever home now, so once my repayments are reasonable (stress tested) then I'm happy to ride our the markets ups and downs.

Once you're not thinking too short term, and buying in an area where people will always want to live (Smithfield is desirable IMO) then I wouldnt be too worried. Don't do anything thats too short term, thats my only advice.