Should I buy apartment for student son?

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desparate

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Hi our first son started college in Galway. We have 3 more to put through college no. 2 heading to Galway hopefully in 2yrs. We are a year mortgage free & earn €100,000 between husband & myself. No credit cards or debts. Never invested in anything before & don’t know where to start. But should we buy apartment in Galway- rather than rent. Any advice welcome.
 
What level of saving do you have?
What ages are you and your husband?
You will need a significant deposit, and the ability to pay back the full loan before 66 to even be considered for a loan.
The interest would probably be btl so higher than a ppp mortgage, boi say 5.8% on their website.

So a mortgage of €350K say with a deposit of €70K (20%), over a 17 year term, guessing age of 49, will give you repayments of €2K per month.

As well as the €70K, you will need to fees, etc on purchase, then furnish and fit it out, then cover utilities etc. and if you rent out other rooms you will need to pay tax etc..

So can you decide if you can afford it first.

Then if child 1 and 2 go to Galway, will child 3 & 4? Or will you have 2 in Galway, 1 in Sligo and 1 in Dublin?

So will you end up with added costs? And if you decide to sell in 6 or 8 years, will you loose money (house prices can go down too). Is it an investment at the end of the day or something nice to have - a family home for your children to live together during college?
 
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Clamball said:
What level of saving do you have?
What ages are you and your husband?
You will need a significant deposit, and the ability to pay back the full loan before 66 to even be considered for a loan.
The interest would probably be btl so higher than a ppp mortgage, boi say 5.8% on their website.

So a mortgage of €350K say with a deposit of €70K (20%), over a 17 year term, guessing age of 49, will give you repayments of €2K per month.

As well as the €70K, you will need to fees, etc on purchase, then furnish and fit it out, then cover utilities etc. and if you rent out other rooms you can only take in €14K per annum.

So can you decide if you can afford it first.

Then if child 1 and 2 go to Galway, will child 3 & 4? Or will you have 2 in Galway, 1 in Sligo and 1 in Dublin?

So will you end up with added costs? And if you decide to sell in 6 or 8 years, will you loose money (house prices can go down too). Is it an investment at the end of the day or something nice to have - a family home for your children to live together during college?
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Thank you I can tell we are clueless reading your reply ….we are 49yrs & 50yrs. Looking at apartments for around the €230 mark so we could meet the deposit requirements. Lot of info to take in thank you.
 
Hi, My youngest son went through college in Cork. He stayed in purpose built student accommodation. It was €238 for a room ensuite. Shared kitchen and living room. 24 hour heating and hot water. The academic year is 32 weeks approximately. Of all who started his course about one third did not complete or changed courses. If your combined income is €100,000 your son may be eligible for the SUSI grant.
 
desparate said:
But should we buy apartment in Galway- rather than rent.
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A back of the envelope calculation:

Buy
Mortgage interest of 6% on a €200k mortgage for ten years: €120k. Add maintenance costs and management fees to this. There is a risk that property prices might fall too. You could make extra money from renting it during the summer or when you have only have one kid in college in Galway. House prices might rise to hand you could make a profit which would be taxable.

Rent
Let’s say 10 years of paying €850 a month rent nine months a year for various kids: €76,500. The price is the price and there is little risk involved.

In your shoes I would buy the apartment if I had €200k sitting in the bank on deposit. If I had to borrow the same amount at 6% I probably wouldn’t take on the risk.
 
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Dr Strangelove said:
A back of the envelope calculation:

Buy
Mortgage interest of 6% on a €200k mortgage for ten years: €120k. Add maintenance costs and management fees to this. There is a risk that property prices might fall too. You could make extra money from renting it during the summer or when you have only have one kid in college in Galway. House prices might rise to hand you could make a profit which would be taxable.

Rent
Let’s say 10 years of paying €850 a month rent nine months a year for various kids: €76,500. The price is the price and there is little risk involved.

In your shoes I would buy the apartment if I had €200k sitting in the bank on deposit. If I had to borrow the same amount at 6% I probably wouldn’t take on the risk.
Click to expand...
Thank you very informative & helpful
 
Silversurfer said:
Hi, My youngest son went through college in Cork. He stayed in purpose built student accommodation. It was €238 for a room ensuite. Shared kitchen and living room. 24 hour heating and hot water. The academic year is 32 weeks approximately. Of all who started his course about one third did not complete or changed courses. If your combined income is €100,000 your son may be eligible for the SUSI grant.
Click to expand...
Only entitled to the €500 off fees
 
These are the rates for the most well known student accommodation in Galway.

Rates | University of Galway Student Residences

Academic year rates for University of Galway's on-campus student residences.
www.campusaccommodation.ie www.campusaccommodation.ie

These are a couple of houses available that is on the first page in Daft (I won't look at Irish apartments as they are badly built and have high management fees and problems)

www.daft.ie

22 Mullán Mór, Tuam Road, Tuam Road, Co. Galway, H91P93A is for sale on Daft.ie

22 Mullán Mór, Tuam Road, Tuam Road, Co. Galway, H91P93A a 3 Bed Terrace is now for sale by Gerry Mullin Auctioneers on Daft.ie with an asking price of €220,000
www.daft.ie www.daft.ie

www.daft.ie

41 Gort Gréine, Rahoon, Rahoon, Co. Galway, H91W0YX is for sale on Daft.ie

41 Gort Gréine, Rahoon, Rahoon, Co. Galway, H91W0YX a 3 Bed End of Terrace is now for sale by Gerry Mullin Auctioneers on Daft.ie with an asking price of €330,000
www.daft.ie www.daft.ie

This one has an excellent location, in between both colleges, and it's got a very high finish, not suitable for students who are notorious

www.daft.ie

131 College Road, Galway City Centre, H91AW0D is for sale on Daft.ie

131 College Road, Galway City Centre, H91AW0D a 3 Bed End of Terrace is now for sale by Dermot Gilchrest on Daft.ie with an asking price of €350,000
www.daft.ie www.daft.ie

www.daft.ie

60 Newcastle Road, Newcastle, Co. Galway, H91ECD0 is for sale on Daft.ie

60 Newcastle Road, Newcastle, Co. Galway, H91ECD0 a 4 Bed Semi-D is now for sale by Conor Brogan on Daft.ie with an asking price of €450,000
www.daft.ie www.daft.ie
 
Why would you want to take on this huge commitment and risk at this stage when you've gotten yourself debt free? What if your son drops out or changes course? What if other kids go elsewhere?
Also would your son be responsible for sourcing other tenants and policing their behaviour in the house, and ensuring its well maintained and rent paid? Remember as a landlord you wont be able to avail of rent a room.
Would it make more sense to support your son financially to some degree and that he gets part time work to cover remaining expenses? Even if he worked around 20 hours per week, he'd probably pull in close to a grand a month and could increase hours over the holiday periods and save. If youve more than one in the same location, they could house share and cover bulk of costs, maybe share a car. Push some of this responsibility onto their shoulders. You'd be taking on a huge amount of debt and hassle when any extra income you have could be getting pumped into your pensions.
 
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