Seems I've saved myself 7000 Euro by renting.

Seems I’ve saved myself 7000 Euro by renting.
I pay 1,500 per month from Jan 2007 to Oct 2007 which = 15,000.
If I had bought I would have lost 22,000 Euros on average.
That makes me a cool 7000 Euros while people like 2Gaffs cover the fall for me.
Thanks 2Gaffs. :smiley:

Don’t forget that if you had bought you would have paid 5% interest on the €400k price, €20,000.

So you saved €22,000+€20,000-€15,000=€27,000

And even that ignores the SD.

So, do you plan to throw us a party?

Only if 2Gaffs bought at the top of the market.

Only about 5% of property changes hands every year, so if prices are down 8% or whatever, only the people who bought in the previous 12 months are impacted, and even then only if they need to sell.

What happens to interest rates is more important to investors than what happens to prices…

27,000 buys a lot of party. :smiley:

€400k ??? I will be buying a 4 bed in Dublin South or Bray/Greystones area. 400K is way too much, I’m not paying any more than 200K.

I just used Dublin average.

well done for your restraint in not buying!! The VIs will keep the party going for a good while yet but once all the builders/ land holders have managed to zip themselves back up supports will diminish and ordinary working people will have 35 years to pay for the party

A bit like the old marriage saying … marry in haste, repent at your leisure

I would caution against reading too much into averages and I dont think you made 7000 as you said near the end of your piece you **saved **7000

Is there a difference?? I think so. I could be wrong.

Anyone long or short property is affected by current prices - the only people who can claim immunity to current prices are those who currently own the correct amount of houses for their needs - usually either one or zero.

By not selling at the peak, investors have foregone a potential profit, which is in effect the same as a loss.

Nope - 2gaffs could sell up and put the proceeds elsewhere, yielding a higher return. Since he chooses to forego that extra yield, he is therefore subsidising his tenants.

Assuming there is a higher yielding investment readily available elsewhere. And the yield is totally dependent on when he bought in.

You also have to consider the high entry and exit costs to property, and the low liquidity of the asset.

Property has got to be a medium to long term investment. Anyone investing in property with less than a 5 year time horizon needs their head examined.

That being said I wouldn’t touch Irish property with your bargepole.

I don’t believe it, DD telling people Not to buy property. I can’t access this link. Can anybody here?

It’s to the right…

Can’t wait for 2gaff’s response, he’ll have a coronary…

It’s in America. How are Bank of Ireland going to make money out of you buying property in America?

You’d be far better off snapping up a few 100% LTV shoeboxes in Dunshaughlin now, wouldn’t you?

Actually its even more than that. As an own occupier Bertie would have to pay for buildings insurance, maintenance and repairs. So the actual saving is probably closer to €28,000.

wow , this is cool 8)
you saved yourself 7k.
i made money out of renting the gaffs to people like you => everyones a winner … excellent.

anyone else out there who wants me to “cover their fall” just let me know …

No Gaffs. You didn’t cover your cost of capital. You LOST money. :unamused:

This thread reminds me of a letter I wrote to Jill Kerby back in May 2006. I didn’t know at the time that it was the top of the market.

Wrong there xman - yield is basd on the current value of the asset, not the price paid for it. It’s useless as a comparative measure otherwise - if I buy 2gaffs house from him then the yield, by your definition, falls from (15/200*100) 7.5% to (15/500 *100) 3% just because it changed hands.

2gaffs has a choice - keep the house and rent it out, yielding 3%. Or sell it and find another investment, like lodging it in a deposit account yielding 4.5%, or maybe stocks yielding maybe 8-10% on average over a similar term.

ladies and gentlemen - the moment you have all been waiting for … 2 gaffs response …

as i have said before - the price of the gaffs at the moment are irrelevant to me since i will not be selling at all.
well thats the plan anyway.
i will be using at least one of the gaffs i have at the moment as a pension.
therefore as someone said ealier , the only thing that matters to me is that my rental income covers my mortgage , and only 2 things can affect that – the rental amounts i can charge , and the interest rates.
the actual price of the gaff is irrelevant.

the only reason i even mention the price of the gaff at the moment is to show up the ludicris position of the bears in here who think it was a bad idea to buy in 2001 ( i bought before that , but just to give them an idea ).

however if i NEEDED to sell , then i could sell and still in todays deflated market make a couple of 100k on the deal.

I didnt cover it , you are right .
if by “cover” you mean pay for it.
the tenants rental “covered” the entire mortgage (including principal portion).
given that no money from my pocket or bank account actually went into the gaff , can you explain how i lost money?

Thats a very good article pity young people aren’t told this before they jump on the ladder. I wonder if we’ll see more of these kinda articles now that things are going off the boil.