Adult children at home? Tips to help YOU move out:
RTE2 THIS CROWDED HOUSE WITH BRENDAN COURTNEY can help!
The property market is in crisis. Every week the headlines are dominated by stories of rising house prices or people sleeping out overnight to buy a new build. Supply is simply not meeting demand. While house prices and rental prices go up, so do the numbers of people having to take a step back to move home with their parents.
This side effect of the ever-intensifying property market has seen 1 in 4 adults move home to their parents. Whether they have had to move to save for a deposit for a mortgage, or as a fall back due to lack of availability, many adults and their parents have found themselves in a situation they never planned for.
RTE2’s This Crowded House helps families to get their adult children on track to move out of home. Queues for properties that are for rent are long, landlords can afford to pick and choose the tenants they want. And if you want to buy, well house prices continue to rise and home ownerships is but a distant dream for many. It is not easy being a young adult in Ireland today, but for those living with their parents there are options and choices to be made. Brendan Courtney along with financial planner Eoin Mc Gee help people put their best foot forward. Although there is fierce competition, Eoin has some helpful starting points for renters and buyers:
“There are two areas you need to convince the bank/ landlord on, they are:
- That you will pay them back their money
- That you will protect their investment.
That you will pay them back their money:
Make yourself attractive, show them that you can handle your finances and you’re a good bet. Do this by:
- Spending less than you earn. Sounds simple but only people who have no credit card debt, personal loans or car loans can say they actually spend less than they earn. The rest of spend more than we earn.
- Avoid excessive debt- have you been carrying a credit card balance for ages? Do you use the credit card at the end of the month to “get you through” and then “forget” to clear it next month?
- Clear your loans; the landlord may not care too much about what loans you have although some may ask for a credit report, but you can be guaranteed the bank will find out.
- Give proof you can afford the repayments/rent on a consistent basis. Work out how much your future mortgage is going to be per month and save 1.2-1.3 times that amount. For example, if the mortgage repayment is €1000 per month you will be very attractive to a bank if you can show consistent savings per month of €1300. A landlord will react exactly the same.
- Don’t bet online – no landlord or bank wants to see that habit. Their attitude will be if they will gamble with their own money why won’t they gamble with mine?
That you will protect their investment:
- The bank need security. Banks only lend a maximum of 90% to first time buyers of the purchase price of a house. (there are some exceptions) This is because they want to ensure that if everything goes pear shaped and you stop paying the mortgage and they are forced to sell the house that they will recoup their money. In other words they build in a 10% buffer from the outset to protect themselves.
- Needing at least 10% also gives the bank comfort that you have ‘skin in the game’ – you have saved for this. You are more likely to look after a property you have money in, than one you have nothing to do with.
- Landlords are no different: they want to know that if you stop paying rent they can throw you out and you won’t have wrecked the place and they can rent it again. Convincing a prospective landlord of this is down to basics, do they think you seem like somebody who won’t wreck the place? Did you arrive to the viewing with a hangover? Did you bring “the lads” to see the place with you? Your landlord has loads of people to choose from, they will decide on you in the first few minutes – remember this and present yourself accordingly.
Whether looking to rent, buy or house share RTE2’s This Crowded House can help. If you or someone you know would like to find out more or apply to the programme click this link: https://bit.ly/2HLQdZb