Should I buy or keep saving?

A

allenk

Registered User
Messages
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Hi all,

It is my first time posting so in advance I would like to thank you all for any advise.

Just a brief summary of my current life/financial details.

I was lucky enough when I left college after 6 years that I landed myself a pretty good job in the engineering world (15 months ago). I'm 26 and from Cork. I started working in Doha, Qatar (Tax free) for around 32k/year. I have now got myself a position in a pretty remote place in the world also tax free on 43k. I have saved 20k in my first 15 months and I plan on saving 30k in the next year (fingers crossed). I have put 7k so far into 2 BOI savings accounts and I am waiting for the exchange rate to go my way and I will send the remaining money in the Qatar bank home to the green isle.

So here is my query, I was thinking in a year of buying a house for aroung 150-200k in around the Douglas area in Cork. If I do this I would like to have the mortgage paid off in around 6-8 years to avoid paying the banks massive amounts of interest. My sister is currently renting with one of her friends and will be for the forseen future so I can give her my place at a good rate and having family staying there will be convenient.

1. If I pump my own cash along with some of the rent into the mortgage it should be paid off in a pretty short time frame. The rent itself will cover the interest and if I put a bit aside monthly I will cover maintanance etc.

2. Should I hang on and wait untill I have the cash in hand to buy the house outright and take the risk that the housing market will not start to rise again.

Any advice will be greatly appreciated.

Kind Regards,

Allenk
 
why do you want to buy a house that you dont intend living in? Investment?
You would be completly and utterly mad.
Keep saving your money and get some financial advice or do some research about investing etc.
 
I would keep saving and monitor the situation with house prices. When you are buying I would buy one that you will intend or want to live in when you return to Ire if you ever do.
 
Regular savings to get mortgage approval

I have briefly looked into other investments such as bonds, savings accounts etc. but I think this will be my best option as I could in the next few years move back to Ireland and this is why I am choosing the location before picking the right house.

Another reason is that I can guarentee my sister a house at a reasonable rent that she could call hers if I never move back. I'd have a nice asset under my belt and also a regular income I could fall back on if things went bad.

Further Query: To have any chance of getting a mortgage should I be putting in regular savings or will I be ok to put in lump sums every 2-3 months?

Cheers again for the feedback.
 
It's generally not a good idea to buy a house unless you plan to live there.

From time to time, there are advantages for first time buyers and you would forfeit those if you buy an investment property.

if you want to buy a house somewhere else, the fact that you have already got a mortgage would be a disadvantage.

Brendan
 
Brendan,

Say for example I am def going to buy a house in Ireland. What would you recommend then?

If I have a house or a plan to buy a house in the near future it will prevent me from spending foolishly over the next few years. Another thing is that I would rather have my money in something I can physically see and monitor rather than shares or something that could potentially collapse.

Regards,

Ken
 
Well I don't think you are wrong in considering buying a house.
Whether you would get a mortgage based on a foreign income is probably your stumbling block.

The people same people who rushed to buy property at the top are now advising shying away from it in the valley. We are in a more reasonable place price wise, although it still has bit to fall before it reaches 1996 levels when I bought my first property. You are young so you are likely to benefit from some capital appreciation in the long term.(say 20 years)

There is still alot of uncertainty in the property market.
But as Warren Buffet says "you pay a high price for certainty."
 
Mommah said:
The people same people who rushed to buy property at the top are now advising shying away from it in the valley."
Click to expand...

Im advising against it and I did not buy at the top of the market. In his circumstances I think it would be a really bad idea.

Point made re loosing first time buyer status is important.

Also the house he buys now will certainly not be the house he wants to settle down in with kids etc later on. having an "investment property" might be like a noose around his neck in years to come when trying to secure another mortgage.
 
allenk said:
Brendan,
Another thing is that I would rather have my money in something I can physically see and monitor rather than shares or something that could potentially collapse.
Click to expand...

How long have you been out of this country again?
 
Hi Lionstour,

I've been living abroad for 15 months.

I will potentially live in the house that I purchase but it will depend if I return to Ireland or not.
 
There was a thread here somewhere from a person in a similar situation - wanting to get a mortgage to buy a property in Ireland while she was still living abroad. She got absolutely nowhere with mortgages and in the end decided to buy a cheaper property outright.

So I think you might have no choice but to keep saving until you can buy outright.

In general, I think your idea to buy a property in Ireland that will be available to you if you return and that will provide rental income until you do, is a good one.
 
Guys,

Thank you for all you advice.

Going back to main question. Assume that no matter what I am going to purchase a house. Wether I am going to live in it or not is irelevant. Do you think I should by early if I have a guarenteed renter or hang on for a few years and try to buy one outright but take the risk of property prices going back up?

I suppose no one can predict property prices going back up or not but if I could earn a few extra euros towards the mortgage I think its not a bad idea but I've no experience in property. I do know that there is a 100 and 1 things to take into consideration such as refuse charges, tax, what if things break etc. but I can cross that road when and if I come to it.

Regards,

Allen
 

I think house price speculation in not allowed on this site. Go ahead buy that house now use all your savings in the process, let your sister benefit from the "investment" and you can pick up the pieces when you come back to Ireland.

It will be a costly lesson for you. But I suppose you can cross that bridge when you come to it,
 
'Fraid I agree with lionstour - i detect a young man getting his hands on a few (well-earned) quid but just a little too eager to have 'something to show' for it. I also get the feeling that he is too long out of the country to be aware of exactly what's been going on here (he didn't get lion's irony back there!). His thinking reminds me of all the nervous hype a few short years ago about getting a foot on the property ladder at whatever cost, and my god, what a cost that turned out to be...
Keep your money allenk - wait till you can buy something nearly outright - meantime relax and enjoy yourself...
 
Fair point, and I think you are all right. I'm just trying to look at my option for 12 months down the line.

I appreciate all the input, cheers.
 
Allenk, I suggest you begin by asking a few banks for a mortgage, while you are out of Ireland. See how far you get, no point wondering if you should buy now or not if you can't get a mortgage.

If - by any chance - you find a bank willing to give you a mortgage, then go ahead and buy. Otherwise keep saving and buy when you have saved enough to buy outright.
 
Greta said:
If - by any chance - you find a bank willing to give you a mortgage, then go ahead and buy. Otherwise keep saving and buy when you have saved enough to buy outright.
Click to expand...

I think your idea to buy a property in Ireland that will be available to you if you return and that will provide rental income until you do, is a good one.
Click to expand...

What evidence do you have for making the above comments and advice?
 
I think you should leave your sister out of the equation. Do your sums on the assumption that you'll be renting the property on the open market, with 1 or 2 vacant months each year, and a property agent to pay to look after the property.

Your sister has her own life to live, and may well have a relationship change or a job change or have a child on a schedule that doesn't suit your rental arrangements. Family and business don't mix well.
 


If he had a guaranteed rent to cover the interest (though heed the advice about making sure the rental yield would be realistic on the open market), a sizeable deposit and a definite plan to return to live in the house, I see nothing wrong with what he is suggesting.

First time buyer status isn't what it used to be and probably won't be anything at all in a couple of years so losing it is no big deal.

And you can't just assume from now on that everyone who buys a house will be faced with a negative equity trap if they try sell it.

You can't project the realities of a 2003-2008 buyer onto the purchaser of today. His decision should not be based on the fact we have had a property crash.

Despite all this I'd advise against buying yet as you're very young, haven't been working long and have no guarantee of a job to come back for.
 
lionstour said:
What evidence do you have for making the above comments and advice?
Click to expand...

I wrote that I think that it's a good idea to buy a property that will be available to OP, that is, it's my personal opinion, I don't need to "have evidence" to prove an opinion, do I?

As to the advice to "go ahead and buy" if OP can secure a mortgage now, I was being a bit ironic, considering the fact that he seems to be ignoring the fact that it's extremely difficult or impossible to get a mortgage while he is abroad!

Really what he needs to do is find out IF he can buy now (i.e. IF he can get a mortgage), then take it from there, hence my advice to go find a mortgage first It's pointless wondering about to buy or not to buy if he just can't buy (at least not for a while, until he saves enough to buy outright).
 
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