Should I sell and rent for a while ? (05-06-2008)

Kemo_Sabe

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241
Re: Should I sell and rent for a while ?

Update : house sold for 2% below asking. Contracts have been exchanged and move day has been set. The rental prop works out about E300 less than current mortgage so hopefully I'll be in a good position when we decide to get back onto the ladder. At the moment we feel that this time next year will be when we do.
the very best of luck with this sangster, my only advice would be that you may need to move your timeframe outwards to achieve the maximum financial benefit (housing markets are slow moving creatures and I don't think the crash will have bottomed by this time next year)
 

Sangster

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32
Re: Should I sell and rent for a while ?

the very best of luck with this sangster, my only advice would be that you may need to move your timeframe outwards to achieve the maximum financial benefit (housing markets are slow moving creatures and I don't think the crash will have bottomed by this time next year)

Thanks Kemo Sabe, the thing is that I am not trying to find the bottom. I agree with you that the bottom will be beyond '09 but I don't want to be renting for too long. I think I will save anywhere between 50 and 100k between waiting for the year and being a 'cash' buyer when the time comes. That will be well worthwhile. And before anyone says it I know its a gamble but it's one I feel comfortable with.
 

Kemo_Sabe

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241
Re: Should I sell and rent for a while ?

Thanks Kemo Sabe, the thing is that I am not trying to find the bottom. I agree with you that the bottom will be beyond '09 but I don't want to be renting for too long. I think I will save anywhere between 50 and 100k between waiting for the year and being a 'cash' buyer when the time comes. That will be well worthwhile.
personally I think you are setting your sights too low with this

look at the panic and desperation out there at present - emergency budget, tax take 6bn behind, uneployment skyrocketing. The artifical level of current asking prices has a long, long way to fall and someone in your position is perfectly placed to benefit - wait it out!
 

Sangster

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32
Re: Should I sell and rent for a while ?

My question is not about the house but I figured I'd keep it in the same thread. Is any one else worried that their money may not be entirely safe in the banks ? We lodged our 'profit' into one of the banks covered by the government guarantee. With all the banking shenanigans, is the money still safe ?
 

paddyd

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486
Re: Should I sell and rent for a while ?

We lodged our 'profit' into one of the banks covered by the government guarantee. With all the banking shenanigans, is the money still safe ?
you've answered your own question. Its covered by the Government guarantee, 100%.
 

Bronte

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13,241
Re: Should I sell and rent for a while ?

you've answered your own question. Its covered by the Government guarantee, 100%.
Not if it's 100K lodged in one bank. I recommend a mix of banks under different schemes because we live in strange times. Also prize bonds and the post office are different options to consider.
 

Kemo_Sabe

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Messages
241
Re: Should I sell and rent for a while ?

My question is not about the house but I figured I'd keep it in the same thread. Is any one else worried that their money may not be entirely safe in the banks ? We lodged our 'profit' into one of the banks covered by the government guarantee. With all the banking shenanigans, is the money still safe ?
as long as the government is solvent, you're OK

what's your mindset towards waiting out this collapse now I wonder? property is now toxic here - I think winter 2010 will see the return of value to Irish property. Will you wait that long? Are you looking now? Can you afford to commit to a new mortgage if your job is looking shaky?

would be interested to hear your responses
 

paddyd

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Messages
486
Re: Should I sell and rent for a while ?

Not if it's 100K lodged in one bank. I recommend a mix of banks under different schemes because we live in strange times. Also prize bonds and the post office are different options to consider.
didn't the Gov guarantee trump the incvrease of deposit cover to 100k?
 

Kemo_Sabe

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Messages
241
Re: Should I sell and rent for a while ?

didn't the Gov guarantee trump the incvrease of deposit cover to 100k?
they 100% guaranteed all of the bank's liabilities

that includes all deposits

now the key is whether you believe they have they have the wherewithal (i.e. the borrowing capacity) to make good on that guarantee? :eek:
 

Sangster

Registered User
Messages
32
Re: Should I sell and rent for a while ?

KemoSabe,
I am delighted/relieved to be in the situation I'm in at the moment. I am more than happy to wait this one out. I didn't foresee the speed of the collapse in the market and I had no idea the banks were in so much trouble. I think by the end of the year a sub €500k 3/4 bed nice semi will be a reality in Dalkey/Killiney/Glenageary. If this is the case I will be looking at a smaller mortgage than I had in Rathfarnham. I initially was reluctant to rent for too long but with the way things are going I'll bide my time.

My problem when the time comes will be getting the mortgage. I was mortgage approved for €460k back in June of last year so even if I can only get half that I am still ok.

As for my job, I think I'm as safe as anyone in the private sector at the moment.
 

Kemo_Sabe

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Messages
241
good to hear sangster

please do not be tempted by dead cat bounces, a temptation to compare current asking to 2006 and conclude 'value!', the 'need' to own your own home (rents are also dropping fast) or any other spurious factors that may arise.

wait this one out and you could well be in the house of your dreams and mortgage free

please report back with progress!
 
B

Buggy

Guest
Re: Should I sell and rent for a while ?

My question is not about the house but I figured I'd keep it in the same thread. Is any one else worried that their money may not be entirely safe in the banks ? We lodged our 'profit' into one of the banks covered by the government guarantee. With all the banking shenanigans, is the money still safe ?

Sangster

I'm wondering if you have heard anything to make you feel any better about the safety of your profit?

I have been saving a deposit while watching and waiting for some time now. I would be very happy to continue waiting but I'm now worried my deposit might disappear into a black hole some time soon!
 

Tuttlinghorn

Registered User
Messages
25
Similar scenario to KenoSabe but a few months later. Advice needed and couple of specific questions :


  • We need to move - garden space for kids is main priority and don't want to live so close to city
  • I'm sensing a buyer is getting cold feet and need to consider what to do in the event of sale falling through !

Options:
1) Cross fingers and push to exchange contracts on house we are in (sale price minus mortgage leaves 150k, sale agreed)
  • Rent for a year, try out a new area, longer commute, hope to buy there, as cash buyers & with 'blood on the streets' (I don't think we are really there yet).
2) Hang on to current house, put on rental market, go and rent somewhere else.
  • Likely to have to pay 5-800 premium per month to do so (assuming we can rent current house, no idea what local market is like though we're D8 and good access to city.)
Questions :
A)
All things being equal (property prices continuing to fall, credit crunch notwithstanding)
Would a lending institution normally lend their max multiple of earnings PLUS any equity in an existing property ?

i.e. in scenario 2 above, if there's any equity left in our house in 12 months time and we want to buy, will we be able to use this equity plus the max the bank will give based on my earnings (plus savings).
OR will bank typically just not go above their earnings ratio ?

B) Am I nuts even posting this and thinking about not ditching an ever depreciating asset ? My reason for considering holding on to it is that it could someday be a uni crash pad for kids, and ultimately a nest egg (probably for the kids when we croak from the stress of servicing 2 mortgages).

C) what other glaringly obvious things am I forgetting to consider??


Mods, pls advise if this should be a new thread and I'll re-post. Comments on this thread & elsewhere have been valuable but I dont think these specific questions addressed ? esp regarding my sanity.

Thanks for reading & answering - longer post than I intended.
 

Kemo_Sabe

Frequent Poster
Messages
241
Similar scenario to KenoSabe but a few months later. Advice needed and couple of specific questions :


  • We need to move - garden space for kids is main priority and don't want to live so close to city
  • I'm sensing a buyer is getting cold feet and need to consider what to do in the event of sale falling through !
Options:

1) Cross fingers and push to exchange contracts on house we are in (sale price minus mortgage leaves 150k, sale agreed)
  • Rent for a year, try out a new area, longer commute, hope to buy there, as cash buyers & with 'blood on the streets' (I don't think we are really there yet).
2) Hang on to current house, put on rental market, go and rent somewhere else.
  • Likely to have to pay 5-800 premium per month to do so (assuming we can rent current house, no idea what local market is like though we're D8 and good access to city.)
Questions :
A)
All things being equal (property prices continuing to fall, credit crunch notwithstanding)
Would a lending institution normally lend their max multiple of earnings PLUS any equity in an existing property ?

i.e. in scenario 2 above, if there's any equity left in our house in 12 months time and we want to buy, will we be able to use this equity plus the max the bank will give based on my earnings (plus savings).
OR will bank typically just not go above their earnings ratio ?

B) Am I nuts even posting this and thinking about not ditching an ever depreciating asset ? My reason for considering holding on to it is that it could someday be a uni crash pad for kids, and ultimately a nest egg (probably for the kids when we croak from the stress of servicing 2 mortgages).

C) what other glaringly obvious things am I forgetting to consider??


Mods, pls advise if this should be a new thread and I'll re-post. Comments on this thread & elsewhere have been valuable but I dont think these specific questions addressed ? esp regarding my sanity.

Thanks for reading & answering - longer post than I intended.
complete the sale, thank your lucky stars, stick your 150k in the bank and rent a nice place in the area that you eventually would like to buy in(driving a very hard bargain with the LL!)
 
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