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Renting Versus Buying

What if I told you that you could save between €300 and €350 per month on your rent and have an investment from this saving for the future? Well that’s the case in Waterford’s property market today.

There is a severe shortage of family homes in the Waterford rental market and this shortage of supplies has resulted in sizeable increases in rental prices over the past 2-3 years. In 2012 you would have found a 3 bedroom semi-detached property for rent in a good family area in Waterford city for between €650 and €700 per month, currently on Daft there are 2 such houses available; priced at €800 and €1,000 per month. Although I don’t have a crystal ball to see into the future, what I can tell you is that both sales prices and rent prices are on the way up, banks are lending and mortgage rates are low. This is an excellent time to buy in Waterford. If you are considering purchasing your first home then now is the time to do it; while sales prices haven’t taken off and there is still value in the market.

So, back to my original statement, how can you save that amount every month? The answer is simple; it’s the difference between monthly mortgage payments and monthly rent on the same similar houses. To check this out we need to select some property for sale, for example we have some excellent value townhouses for sale in Christendom Square which come painted, floored and with a modern fitted kitchen. When fully furnished this property would rent for €750 or more per month, however with their price of only €99,950 you could pay your 10% deposit and by taking out a 30 year mortgage you would pay a monthly payment of only €389.03 per month, as shown in the graph below taken from mortgages.ie. (Obviously you would need the initial deposit of €9,995 and some money to buy appliances and beds, couches etc. but this is a great way to both save and invest all in one go)

mortgage cost christendom

You might think that this is a one off, so let’s compare another, this time let’s take the larger A rated homes we have for sale in Fox Wood. These beautiful properties are brand new and are available for €165,000. There is one currently for rent on Daft at €1,000 per month. However if you paid a 10 % deposit and had some money for furnishing you could take out a 30 year mortgage and only pay €679.33 per month in repayments (see graph below), saving €320 on the current rental price.

Foxwood Mortgage comparison

Of course having your own home comes with some additional costs, such as; insurance, property tax, maintenance etc. but all the money spent is going into maintaining your asset. I see it as an investment in the future. The way things stand in the current rental and sales market in Waterford my advice would be buy now as property prices are on the rise.

Cormac Finlay

Auctioneer

Liberty Blue Estate Agents,

36 Parnell street,

Waterford

051 85 81 82

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