Son starting college, should we rent or buy?

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Mrs Vimes said:
My parents had this dilemma in the 1990s, several offspring approaching college and they didn't live in a town with a university. they decided not to buy as they didn't want us all to be "forced" to go to a particular college and, importantly, realised that late-teenagers really aren't likely to be capable of living together without parent/referees. I love my brothers (now) but the idea of living with them without someone in charge

That said, they would have made money, but not necessarily had the family they have now.
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Good point, I hadn't thought about that.
 
To me this is the same class of conundrum as should I buy a holiday home or should I just rent somewhere as I need it. Usually the latter makes more sense unless there are other sound reasons to purchase an investment property in a particular location. I think that the Irish aversion to rent ("dead money" and all that) feeds into some atavistic need to "own" property rather than just pay as you go/need...
 
Renting for your child is going to be something like €5-6k a year for four years.


Alternatively you can rent €200k from a bank to buy an apartment. This will cost you €8-€9k a year for four years. Add to this stamp duty and EA fees, management charges, and maintenance. There is downside risk of capital loss, and any capital gain is taxed at 33%. You could make something by renting a room to another student for a (taxable) €5-€6k but you would be very lucky over four years to spend less than you would just renting as normal.


This can make sense in some circumstances of course. If you had €200k on deposit doing nothing it would be a good use of your wealth. Likewise if you lived in somewhere like Wicklow and had three kids headed to third level in Dublin with some certainty. But borrowing to make it happen doesn't stack up.
 
Laughahalla said:
What if your son decides he doesn't like Galway/College after a few months.
Managing property from an other county is a pain.

There is a few apartments for sale in Galway for less than 150k.
You don't have to buy for 300k
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Initially I was thinking house not apartment.
 
ATC110 said:
Let your son source his own accommodation through the numerous sites for this purpose and develop problem solving ability in the process
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Both my son and his cousin who is in a similar position have spent the last couple of months trying to rent. It really is a landlords market in Galway at the moment - they are looking for crazy money and/or 12 month leases.
 
Banner13 said:
they are looking for crazy money and/or 12 month leases.
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Brendan Burgess said:
3) Now, you need to crunch the numbers.
A: What rent will you be paying for your son?
B: How much will a similar property cost?
C: How much of a deposit do you have?
D: What will the interest rate be?
E: If you are buying a two bed apartment, will you be able to let one of the rooms to another tenant and how much rent will you get?
F: What will the transaction costs be?
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You should not base your decision on generalised advice such as "Buying property for the short term makes no sense."

You must crunch the numbers. They may well back up the generalised advice.

And now you have introduced a cousin, so you are now comparing the cost of renting money with the cost of two people's rent.

Brendan
 
Banner13 said:
Both my son and his cousin who is in a similar position have spent the last couple of months trying to rent. It really is a landlords market in Galway at the moment - they are looking for crazy money and/or 12 month leases.
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Of course they are looking for a 12 month lease. This isn't new. A landlord isn't going to rent it for 9 months of a year. The alternative is they will rent it for 9 months but increase the rent by 25% to make up for the lost months.
 
Someone might have had this idea before me but here goes and it is legal provided you tell the LL. Rent a house a cheap house with a lot of rooms then give it to your son and he rents out the rooms he does not use tax free
 
jeffery said:
Someone might have had this idea before me but here goes and it is legal provided you tell the LL. Rent a house a cheap house with a lot of rooms then give it to your son and he rents out the rooms he does not use tax free
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good idea if the landlord agreed and its only tax-free if the total from rent-a-room is 14k or less, otherwise tax is due.
 
Does rent a room apply here?

If I have €1,000 a month in rental income and I pay €1,200 a month in rent, then I am not making a profit, so there is no tax liability.

And Revenue is not interested in such schemes anyway. They would look at this as house sharing. Unless the guy is paying €1,200 in rent and receiving €2,000 a month in rent.

Brendan
 
A family member bought in Galway for their offspring when they went to college there. They held the property, a house, for several years after college was finished though, and I think that would need to be the plan, as you can’t assume any major capital gain.

Never an issue being rented, offspring will sort it with good eggs for their time there, and often those good eggs will sort out the years that follow.

In addition to financial sense it is nice to know every year that you don’t have to worry about the rat race to find a place, and that the place is safe and you won’t get stuck with some bad eggs partying/drugs/dirty etc

The house is very near the college and currently for sale. OP is correct with their 300k rough figure for a house close to a Uni.
 
Plenty of purpose built student accommodation showing on daft.
Yes it's a little on the pricy side, but it is inclusive of all the standard bills and it's rentable for 9 months.
You are looking at €8,000-€9,000 all in.

Stress free - and walking distance to the college
 
We did this 25 years ago when our kids were at college in Dublin. I'm not sure I'd do the same thing again though it has worked out quite well for our daughter who still lives there with her husband and children who will shortly be going to college.

You need to look at the long term. For us to sell or even give it to her we would be looking at a huge chunk of capital gains tax.

In the shorter term you would need to think about your kids sharing a house together. They may love each other but they may not love living together. They may want to expand their wings in different directions
 
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