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Does this make sense?

  • 05-09-2022 7:55pm
    Registered Users Posts: 945 ✭✭✭

    My partner and I are talking about moving in together somewhere on the commuter belt. Looking at rental prices though and it's gotten me thinking of buying instead.

    We have 70k in savings. If one of us was to just buy an apartment for lets say 220k we would only have a mortgage of 150k.

    If we were to rent for the next 5 years we could easily pay close to 100k in rent. If we were to live in it until we had the mortgage paid off could that property be used as collateral on another property down the line? We could rent out the apartment then..

    What are the downfalls of this?


  • Registered Users Posts: 5,994 ✭✭✭Ubbquittious

    The downside is that things could start recessing but its hard to know who to believe. The people who have bought into property recently will talk up the boom long past the crash and the people wanting a crash will be saying it's going to happen any minute

  • Registered Users Posts: 3,421 ✭✭✭RichardAnd

    Commuter belt apartments tend to be Celtic tiger builds, and they tend to have a quality that, shall we say, lacking. I saw an apartment in City West last year that was going for 230k. The apartment itself was well furnished, but the building itself did not look great.

    The problem with apartments is that you are at the mercy of whoever maintains the building. If a serious problem in construction is discovered, you are in trouble. I know someone who was landed with a 25k bill to fix the roof of the building a few years ago.

    That said, I do believe that renting is dead money. In your shoes, I'd probably buy the apartment. It's a risk, but if one takes no chances, they will make no gains.

  • Registered Users Posts: 4,242 ✭✭✭brokenangel

    Lots of top quality available as well, just because you seen one apartment which is suspect not sure why you would say all are the same

    If built during the Celtic tiger it is very easy to find out if problems. If built since the best is to check the company and see then. An estate close to me is built and going for years, was slowly built to make sure the company didn’t go bang, but the quality is good, high energy rating and in the budget of the person. They have 21 available to buy now. Should be in budget.

    The “I know someone” is fired out all the time but in reality these cases are few and far between. Normally the value massively exaggerated as well. 25k for a roof? Was it a house or apartment block? If apartment then everyone paid 25k? Expensive roof

    If the crash happens the crash happens but if you are looking to keep the property long term it won’t make a difference as the money you will invest is never gone

  • Registered Users Posts: 3,421 ✭✭✭RichardAnd

    I know someone who knows someone who says otherwise.... ;)

    Don't misunderstand me. Not all Celtic Tiger apartments are cardboard, but I've just personally had a lot of bad experience, so I will have a jaded opinion. I'd take an apartment over renting any day, but there are manifest issues with apartments that one should be aware of before buying one.

  • Registered Users Posts: 4,126 ✭✭✭Deeec

    I agree with RichardAnds comments re apartments - they are usually poorly built, badly planned and horrible to live in. Apartments are poor value for the money you spend. In an apartment block owner occupiers are in the minority.

    If you are prepared to move to Louth, Meath, Kildare etc you would be able to buy a small house for that money. A house is always a better investment and offers a better standard of living than an apartment.

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  • Registered Users Posts: 667 ✭✭✭you2008

  • Registered Users Posts: 8,144 ✭✭✭Ray Palmer

    OP. You could end up in negative equity is the danger. There is also the prospect of laws changing about rentals to make it difficult to sell and or make a profit on a sale of a rental. There is a reason landlords are running for the hills. All things being equal it makes sense but things aren't all equal

  • Registered Users Posts: 3,421 ✭✭✭RichardAnd

    If one can be found. Virtually all new builds are rental-only.

  • Registered Users Posts: 209 ✭✭Mr Hindley

    I would say buy the apartment, as long as you're happy to live there for at least a few years. Even if prices drop some, that's likely to be outweighed by the rent you would have spent. But I wouldn't build any plans around renting it out - as others say, small landlords are fleeing the sector in droves. Be prepared that you would sell it and use it to buy your next property. It's the plain old fashioned concept of the property ladder, which is what people have been doing for generations.

  • Registered Users Posts: 1,228 ✭✭✭The Mighty Quinn

    One thing to consider, as obvious as it may sound, unless you plan on a variable rate mortgage, you won't just be able to make 100K of payments towards the mortgage in 5 years (assuming you're planning on trying to just keep up the rent-type payment amounts to quickly pay down the mortgage). And even if you do, that won't be 100K off what you borrowed.

    I'm about 5 years into a mortgage and have made about 50K in repayments, but only 20K has come off the principle. 30K of it was just paying interest!

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  • Registered Users Posts: 4,242 ✭✭✭brokenangel

    Nothing wrong with apartments, plenty of people buy and live in them. It’s the norm all over the World…

    You would be surprised how much a house in Meath /Kildare is now because everyone thought of that idea about 3 years ago.

    The best value for money is an apartment and if the owner plans on buying a house later they have an easy rental apartment, you don’t have to rent yourself and you will find companies set up to rent properties as LL don’t want to know anymore

  • Registered Users Posts: 4,126 ✭✭✭Deeec

  • Registered Users Posts: 12,581 ✭✭✭✭Geuze

    If the deposit is 70k, and the mortgage is 150k, for a 220k apartment, then negative equity is extremely unlikely.

    Apartment prices would have to fall by more than 32% very quickly, for negative equity to happen.

  • Registered Users Posts: 8,144 ✭✭✭Ray Palmer

    Not like it happened before🙄

    Did you miss the other factors in play? Rental property with low rent is worth less on the open market. Who know what legislation is coming that could tie property to being rented permenantly could easily devalue any property rented. Do forget when rents were falling the government reduced HAP and increased taxes and charges to landlords. Not as safe as you think

  • Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,816 Mod ✭✭✭✭pc7

    There are houses in the North Strand fairly cheap, could be better than an apartment, no management fees either.

  • Registered Users Posts: 4,242 ✭✭✭brokenangel

    Both are a significant commute from Dublin so the "savings" will just be spent on fuel trying to get in/out of Dublin.

    BER rating all below the Green mortgage clip so will cost you more on mortgage.

    Plus if a crash does happen you will see a more significant drop in property value outside the city than in the city.

    If you check in the likes of Clonee, Hollystown, Ashbourne, ect you should find good value. Also with Dublin bus connections or train connections. Like Clonee has a train down the road in Dunboyne(Dunboyne is crazy money because the train station is in the village)

    Look around, plenty of good value without spending the rest of your life in car

  • Registered Users Posts: 694 ✭✭✭JimmyMW

    I would also to strongly consider the purchase with a partner, ensure contributions by each are equal or if one is buying I would suggest a Cohabiting agreement with your partner, properly done through your solicitor, things do go wrong for people despite what you may think right now.

  • Registered Users Posts: 8,144 ✭✭✭Ray Palmer

    One of them is in East Wall not North Strand which is litteraly on the wrong side of the track. The "North Strand" property would be considered Ballybough by locals and part of a set of houses sold in bulk where the local residents protested and threatened anybody going to view them. Very small property and the streets there are constantly filled with rubbish from fly tippers and local residents. Wouldn't advise buying them as I know the area very well.

  • Registered Users Posts: 1,041 ✭✭✭JohnnyChimpo

    Also that North Strand house is 36sqm, which is stretching the definition of "house" somewhat

  • Registered Users Posts: 1,893 ✭✭✭kowloonkev

    To be fair though, just because they are for sale at 225,000 doesn't mean they will sell for that.

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  • Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,192 CMod ✭✭✭✭Pawwed Rig

    That area has a broken community. It is dangerous and the locals are not too welcoming. I wouldn't buy a property there for any money. There have been a number of murders within a small radius of both of those properties. You don't get walking distance to IFSC at that price without good reason.

  • Registered Users Posts: 8,144 ✭✭✭Ray Palmer

    They aren't in the same area and when it comes to inner city Dublin a short distance makes a massive difference. The North Strand community is quite strong and lots of professionals live there now. I wouldn't consider either of those houses part of that community nor part of the same community as each other.

    There is a lot of development coming to North Strand. They are finishing up the building by the bridge. The fire station is going and an apartment block there and the old cement factory. The red brick shops are going to have major work to be an apartment block as well. Interesting to see what that will do to the area. THe chipper is already gone and an nice samll resteraunt and there is a fancyish coffee shop. Not sure if it will continue to gentrify or flip back to a rough area. Only time will tell

  • Registered Users Posts: 8,184 ✭✭✭riclad

    My friend bought an apartment 12 years ago, nice to live in, no problems, cosy, ground floor, very good condition, built to a high standard, get a survey done if you are concerned. Some apartments have low quality sound insulation. You can hear neighbours talking on a phone. Every builder is different, try and view apartment after 6pm when the other people are home ftom work, check have you got a parking space , if you drive.