Buying a house with a view to trading up after 3 years?

[redy38]

Hi

Family of 4, income of 40,000 (bonus included) - 1 income
rent 1200 a month until August - probably higher afterwards (moving out, landlord selling)
mortgage approval for 100k, savings of 70k, gift of up to 30k from parents possibility
planning to buy 2-3 bed apartment/house for up to 180-200k in and around Dublin for 3-5 years, then sell and buy something "for life"
does that make sense?

 

[Brendan Burgess]

It makes sense to buy a house if you can afford to buy a house which meets most of your needs. But your horizon should be longer than 5 years. The transaction costs and risks in buying and selling are large.

Brendan

 

[PGF2016]

Prepare for the worst. Buy a place that you could live in for 20 years if things turned bad. Many people are stuck in apartments and houses bought during the boom with the intention of trading up in a few years. The trading up never happened.

 

[redy38]

Hi Brendan

Thanks for reply.
House was an idea at the start, but in that price range all the houses we found need a significant investment which we wouldn't have.
I was counting with new rent of 1350 pm and mortgage repayments of around 500 pm which is a yearly difference of around 10k. I know there is other stuff to pay like management fee, lpt and maintenance, but it still allow us to save significantly. Plus the plan is for my wife to get a job in a year time, so that would put us in better position to get a bigger/better place.

We are counting that we will have to stay at that place for longer than 3-5 years as planned for whatever reason.

another question is (if we going to sell) - is it better to overpay the mortgage or save the cash?