Property Market 2020

JJJackal

Claw Hammer wrote: »

Property investment makes more sense if you borrow. I was in an apartment this morning. The owner bought it in 1997 for about £80,000 roughly €100,000. He borrowed £86,000 so the entire purchase including fit out was funded from borrowed money. He qualified for section 23 relief of £64,000 saving himself about £30,000 in tax. The rent covered the interest payments on the apartment and it when cash flow positive after three years. It went cash flow negative for three years around 2010. Now the loan is paid off and the apartment is bringing in about €1600 month. For no cash at all, the owner has acquired an asset worth over €200,000 and apart from service charge and some maintenance has an income of €19,200 per annum.

Property investment makes no sense if you borrow. I was in an apartment this morning. The owner bought it in 2007 for about €500,000 roughly €500,000. He borrowed €450,000 so the entire purchase including fit out was funded from borrowed money. He qualified for very little tax relief of €30,000 saving himself about €14,000 in tax. The rent did not cover the interest payments on the apartment and it when cash flow negative after three months. It went cash flow positive for three years around 2019. Now the loan is €460,000 (had to halt payments for a while as tenants refused to pay) and the apartment is bringing in about €2500 month. For no cash at all, the owner has acquired an asset worth over €450,000 and apart from service charge and some maintenance has an income of €30,000 per annum which just now covers the mortgage.

Learning point - timing is everything

PommieBast

OttoPilot wrote: »

How do you avoid or reduce paying rent? 800 in dublin is fairly standard.

€800 sounds incredibly low for somewhere "quite close" to the city centre. Guessing it is either on top of the €380 HAP and/or it is her share of the rent..

hurikane

Wonder what happened to auctioneera, did they see sense?

Pivot Eoin

hurikane wrote: »

Wonder what happened to auctioneera, did they see sense?

You cant click into their Profile anymore. Maybe got the boot or just decided they would be better off de-activating...

Was fun while it lasted! But yeah, they were very much dictating the flow of this thread 1 way or another.

I didn't mind them being here, won't lose any sleep with them gone!

OttoPilot

Mic 1972 wrote: »

best option is to move in with partner who already own a house, in case she has one ;-)
or she can rent a smaller room outside dublin for 500 and commute to town by bus, a car is expensive to maintain on top of the monthly loan

Great idea. Move out of the apartment she has lived in for 12 years and is only paying 500 for, to another place where she will have to pay current market rates plus commuting costs. And possibly have to rent two rooms for her and her nephew. If you had bothered to read it, you would see she lives close to city centre so commuting costs are minimal.

IAmTheReign

combat14 wrote: »

how does anyone in dublin buy a house if this is indicative:

43 Female, Software Technician on 35000 euro
saving <100 euro a month .......

http://jrnl.ie/5102325f

Honestly it seems like she's just bad with her money, which she admits herself. She makes 2350 a month net and only has about 1000 a month in expenses when you factor in her receiving 420 in HAP payments. If she's only saving 100 a month she's burning through 300 a week on things she doesn't need. She could easily save a grand a month if she really wanted to.

TheSheriff

IAmTheReign wrote: »

Honestly it seems like she's just bad with her money, which she admits herself. She makes 2350 a month net and only has about 1000 a month in expenses when you factor in her receiving 420 in HAP payments. If she's only saving 100 a month she's burning through 300 a week on things she doesn't need. She could easily save a grand a month if she really wanted to.

Thought the same when i read that the other day !

Markitron

IAmTheReign wrote: »

Honestly it seems like she's just bad with her money, which she admits herself. She makes 2350 a month net and only has about 1000 a month in expenses when you factor in her receiving 420 in HAP payments. If she's only saving 100 a month she's burning through 300 a week on things she doesn't need. She could easily save a grand a month if she really wanted to.

TheSheriff wrote: »

Thought the same when i read that the other day !

I was probably even worse than her, I was paid a good bit more but my expenses were pretty much the same. Did not realise how bad I was with my money until I decided to save for a deposit, when you tell yourself that you can't ever buy a house its like a mental license to be an idiot with your money.

Ush1

Potential landmark case here:

https://www.swissinfo.ch/eng/court-decision_companies-must-pay-share-of-rent-for-employees-working-from-home/45781126

Companies could do a very quick U-turn on WFH.

Graham

Ush1 wrote: »

Potential landmark case here:

For the Swiss

L1011

Ush1 wrote: »

Potential landmark case here:

https://www.swissinfo.ch/eng/court-decision_companies-must-pay-share-of-rent-for-employees-working-from-home/45781126

Companies could do a very quick U-turn on WFH.

In a legal system that we do not take precedent from and is not in the EU.

Graham

Even then, the contribution is €145/month and it's not due to employees that requested to WFH.

Either way it would represent a significant saving compared to the cost of a desk in your average Dublin office.

Padre_Pio

Graham wrote: »

Even then, the contribution is €145/month and it's not due to employees that requested to WFH.

Either way it would represent a significant saving compared to the cost of a desk in your average Dublin office.

There would probably be some sort of wage adjustment instead.
Either way, I would imagine most people's commuting costs are more than 145 pm.

coolshannagh28

Graham wrote: »

Even then, the contribution is €145/month and it's not due to employees that requested to WFH.

Either way it would represent a significant saving compared to the cost of a desk in your average Dublin office.

How would it stack up against a desk in India ?

ELM327

combat14 wrote: »

how does anyone in dublin buy a house if this is indicative:

43 Female, Software Technician on 35000 euro
saving <100 euro a month .......

http://jrnl.ie/5102325f

How does someone on 35k get hap?


"Rent: €800 (I get €380 HAP)"

OttoPilot

coolshannagh28 wrote: »

How would it stack up against a desk in India ?

Have you ever worked with a team outsourced to India?

ELM327

OttoPilot wrote: »

Have you ever worked with a team outsourced to India?

Yes
It's not something anyone but the most cost averse company will do.
Costs go down, but the quality of service goes even further down

coolshannagh28

OttoPilot wrote: »

Have you ever worked with a team outsourced to India?

I take the point but its inevitable over time that WFH will lead to outsourcing to cheaper locales as the connection between employer and employee is broken down.

Graham

coolshannagh28 wrote: »

How would it stack up against a desk in India ?

I'd imagine about the same as before the pandemic.

I don't buy the remote working means all jobs are going to India theory. There are a multitude of reasons why companies want/need an in-country presence.

If direct India/Irelend desk price comparisons were the main consideration we'd have lost all out white collar work way before the pandemic.

Probably veering a little off-topic for the Property forum though.

Graham

coolshannagh28 wrote: »

I take the point but its inevitable over time that WFH will lead to outsourcing to cheaper locales as the connection between employer and employee is broken down.

If that were the case, all Dublin based offices would have been replaced with Mumbai offices a long time ago.

Like I said, there's a multitude of reasons it hasn't happened and isn't likely to happen.

addaword

ELM327 wrote: »

Yes
It's not something anyone but the most cost averse company will do.
Costs go down, but the quality of service goes even further down

You would be surprised. Some Irish multinationals are outsourcing office work in India and are very happy.

Graham

Nobody said it didn't happen at all.

OttoPilot

coolshannagh28 wrote: »

I take the point but its inevitable over time that WFH will lead to outsourcing to cheaper locales as the connection between employer and employee is broken down.

Hard disagree. I work in audit and when I see the quality of 'work' being done by outsourced finance teams vs the local finance team, it's pretty clear they are only doing menial tasks that can and will be automated anyway. I would be more worried about the indian losing his work to automation than the irish guy losing his work to the indian guy.

I imagine it is similar in other areas of business.

addaword

Graham wrote: »

Nobody said it didn't happen at all.

It will happen more and more, just like manufacturing has largely being outsourced to China etc - even iPhones are made there.

Graham

Personally, I don't expect a sudden exodus of employees moving out of Dublin/Cork/Galway to WFH home from the 4 corners of Ireland.

I do expect some will relocate, maybe enough to start and move the needle slightly in terms of demand for property in some locations.

Hubertj

Graham wrote: »

If that were the case, all Dublin based offices would have been replaced with Mumbai offices a long time ago.

Like I said, there's a multitude of reasons it hasn't happened and isn't likely to happen.

its just a lazy throw away comment by someone that doesnt know what they are talking about.
If anything, this will result in jobs being reshored to Europe, Ireland, US etc. The pandemic has resulted in many MNCs identifying supply chain challenges.
Expect the likes of Apple to move some manufacturing out of China and back to US and Europe. Single source supply chains are done for many.

GreeBo

addaword wrote: »

It will happen more and more, just like manufacturing has largely being outsourced to China etc - even iPhones are made there.

But it did happen, 15 odd years ago and yet here we all still are.

So....property 2020 huh?

No reduction in price here.
https://www.myhome.ie/residential/brochure/10-crannagh-road-rathfarnham-dublin-14-d14dp94/4429783

Hubertj

addaword wrote: »

It will happen more and more, just like manufacturing has largely being outsourced to China etc - even iPhones are made there.

you really dont have a clue what you are talking about.

Mic 1972

coolshannagh28 wrote: »

I take the point but its inevitable over time that WFH will lead to outsourcing to cheaper locales as the connection between employer and employee is broken down.

you need to be eligible to work in ireland even if WFH for an irish compny

TheSheriff

Only 65k