36 year old, decent savings, buy a house?

Discussion in 'Money makeover' started by Panthera Tigri, 28 Dec 2018.

  1. Panthera Tigri

    Panthera Tigri Registered User

    Posts:
    14
    Age: 36
    Spouse’s/Partner's age: None

    Annual gross income from employment or profession: 58k
    Annual gross income of spouse: N/A

    Monthly take-home pay : 3400

    Type of employment: Permanent

    In general are you:
    (a) spending more than you earn, or
    (b) saving?
    Saving

    Rough estimate of value of home N/A
    Amount outstanding on your mortgage: N/A
    What interest rate are you paying? N/A

    Other borrowings – car loans/personal loans etc
    None

    Do you pay off your full credit card balance each month? Only Debit card
    If not, what is the balance on your credit card? N/A

    Savings and investments: 250,000 spread around different accounts

    Do you have a pension scheme? Yes, not sure whats in there.

    Do you own any investment or other property? No

    Ages of children: N/A

    Life insurance: No


    I am considering buying a house but dont know if its a good time. Currently renting, 700 euro per month and sick of sharing with people.
    I would be looking for a house in and around Dublin or in some of the commuter towns. Should I be putting all savings into house?. I was looking at spending around 250 - 400k. The problem is there isn't really suitable houses for single people.
    Also is it a risky time to buy?
    Right now my money isnt doing much work for me as I have been lazy and there is not much options.
     
  2. Brendan Burgess

    Brendan Burgess Founder

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    37,071
    Hi Panthera

    We do not allow speculation about house prices on Askaboutmoney so posts which tell you "prices are due to rise/fall" will be deleted.

    When you are ready to buy a house and can afford to do so, you should buy a house.

    It is a super investment
    • Renting money is much cheaper than renting property
    • Any increase in value is tax-free
    • If you ever need social welfare, the value of the property is ignore in any means test.
    So, yes, you should buy now.

    And, yes, you should be putting all your savings into the property.

    With an income of €60k , you should be able to borrow around €200k. With €250k cash, it means that you can look at buying a house for €450k.

    You don't really need to buy a house suitable for a single person. Buy the type of house you want in the location you want. For the first few years, rent out a room. Again, subject to certain limits, it's tax-free. When you have the mortgage down to a more comfortable level, then you can stop renting out a room.

    Brendan
     
    cremeegg likes this.
  3. cremeegg

    cremeegg Frequent Poster

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    2,696
    This is not a relevant question. If you find a house that you want to live in and can afford, what's the risk.

    If you mean would it be cheaper next year, who knows, aside from such speculation being disallowed on AAM, its a fools game. Once you buy unless you want to move what difference does the resale price make.
     
    PGF2016 likes this.
  4. gravitygirl

    gravitygirl Frequent Poster

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    432
    With rental prices so high and with your significant savings I agree that buying property makes sense.

    An apartment is also an option especially if you are planning on staying single/not having children - some people can be very negative about them, and I can understand this in some cases, but if you do your homework and buy one in a well managed development, they can work well. Low maintenance, and allow you to live in a location where you would perhaps not be able to afford a house. It depends on your goals and what you are willing to trade off / compromise on e.g. better location/less commute vs a garden etc.
     
  5. Panthera Tigri

    Panthera Tigri Registered User

    Posts:
    14
    "This is not a relevant question. If you find a house that you want to live in and can afford, what's the risk.

    Mainly I could buy something better next year."
     
    moneymakeover likes this.
  6. gravitygirl

    gravitygirl Frequent Poster

    Posts:
    432
    And what about the year after that? And the year after that? You might never end up buying somewhere at that rate as the fear of something possibly better would always put you off.

    Even if house prices were to fall 10% next year (this is not a discussion of house prices, just speaking 100% hypothetically!), you may not get finance as banks may reduce lending, supply may fall back even further, so you may not even find a property you like! Life is short, sometimes it is important to think about the "Now" as well as the future.

    Sure, everyone always wants more/better but sometimes "enough" is plenty.
     
  7. Panthera Tigri

    Panthera Tigri Registered User

    Posts:
    14
    I did think about apartments. But the problem is any cheap ones are pretty bleak.
    Any expensive ones I could afford to buy a house for similar so wants the point.

    Also no plans on children one way or another.
     
  8. gravitygirl

    gravitygirl Frequent Poster

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    432
    There are a lot of nice apartments for 350k-400k in areas where a small house would cost maybe 500k+. Again it depends on your personal priorities.
     
  9. Panthera Tigri

    Panthera Tigri Registered User

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    14
    Thanks, good response.
     
  10. Sarenco

    Sarenco Frequent Poster

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    5,317
    In the current market, €250k would buy a decent one-bed apartment in most Dublin neighborhoods.

    To own a mortgage-free home in a location of your choosing at 36 would be pretty impressive but as @gravitygirl says it’s all about your personal priorities...
     
  11. Gordon Gekko

    Gordon Gekko Frequent Poster

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    3,444
    It would, but personally I’d be very wary of buying a one-bed apartment. They’re harder to sell on the basis that banks don’t like them and impose lending restrictions in relation to them. Plus they’re suitable for a smaller target market. Plus it’s generally good to have a spare bedroom for your own excess stuff (and possibly a desk) or guests from time to time. And it’s helpful to have somewhere to dry clothes that isn’t in plain sight or in your own bedroom (for health reasons).
     
  12. Thirsty

    Thirsty Frequent Poster

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    1,925
    I would avoid apartments completely.

    Look for a house that's run down and needs modernising so you can add value.

    Rent out rooms to maximise your tax free income (think the limit is €14k per annum).

    I do understand the irritations of sharing but

    a) you get to choose your tenants
    b) its the equivalent of a €28k salary rise!
     
    PGF2016 and PaddyBloggit like this.
  13. galway_blow_in

    galway_blow_in Frequent Poster

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    If you can get a mortgage for a one bed apartment in a decent location, I would see little wrong with it, tradesmen are charging 2006 prices today but worse still they are near impossible to get so buying something which needs work is not always the discount purchase it might first appear
     
    Coldwarrior likes this.
  14. gravitygirl

    gravitygirl Frequent Poster

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    432
    I would echo the point re the spare bedroom being handy for storage and all sorts, as well as the resale element. Taking on a small mortgage of 100k would still be reasonable and would open up the option of a 2 bed.

    Some people are fine with sharing, in which case the rent a room scheme is definitely financially very beneficial. However, for others, having the freedom to live on your own in your own place is worth foregoing the 14k!! It's a personal choice.
     
  15. Brendan Burgess

    Brendan Burgess Founder

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    37,071
    Agree fully. But it's not a permanent decision. He can buy a bigger house and rent out the spare room for a few years until he has the mortgage reduced. He can get rid of the tenant then.

    And if he hits financial difficulty in the future, he can rent out the spare room again.

    brendan
     
  16. cremeegg

    cremeegg Frequent Poster

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    2,696
    Last edited: 31 Dec 2018
    Not to be binarist about it, (see todays RO'CK) but I will bet you 50cent that our OP is a she.
     
    Last edited: 31 Dec 2018
  17. Panthera Tigri

    Panthera Tigri Registered User

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    14
    Ill settle the bet, I'm a he.

    I put some thought into an apartment and decided they just are not for me.
    Better value in a house and I dont like to be on top of people.
     
  18. PaddyBloggit

    PaddyBloggit Frequent Poster

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    3,263
    And here I was thinking that this was a forum to ask about money! :rolleyes:
     
  19. galway_blow_in

    galway_blow_in Frequent Poster

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    Apartments are better value on the face of it
     
  20. Panthera Tigri

    Panthera Tigri Registered User

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    How do you figure that?