Buy outright and remortgage, or mortgage first?

worried_mummy_4

My theory is that if we had a further 10% drop in the market (Kev - even you thought that was a bit harsh a prediction?) and if she could get it @ £75K it would still look to be a good long term investment. A basic refurb - nothing over the top, a spend of around £15K and a lot of time and effort by family and friends! it should still stack up?

Worst case scenario - she buys and refurbs for around £90 - £95K tops. Struggles and has to move back home and rent it out at £75 per bedroom x 3 to nurses (still cheap rental for the location) - and OK it's not the prettiest of houses, no kerb appeal at all, but it has gardens, parking, a reasonable estate location and convenient for everything - that would bring in around £975 pcm which would cover her costs and mortgage easily. Plus when the market starts to recover - I think it's going to be a better investment long term for her than leaving it in a non performing account, or blowing part of it on travel. She's not that kind of a girl anyway & life has sadly taught her very hard lessons!

This is her 'mind set' after being asked what she wants to do to celebrate her 21st - holiday, spa break, party? Her reply is - If I buy a house and spent money that I needed in order to do it - I would be absolutely kicking myself! Plus if I do get it - I'll need domestic things that I'll put on my 'wish list' - can't fault the logic?

She's not a party animal/wild child. For 20 years old, she's probably got more common sense than most 40 year olds.

puddy

sounds good, kerb appeal can be developed and she can have her wild years when she's old enough to appreciate them!!

Kev09

worried_mummy wrote: »

Worst case scenario - she buys and refurbs for around £90 - £95K tops. Struggles and has to move back home and rent it out at £75 per bedroom x 3 to nurses (still cheap rental for the location) - and OK it's not the prettiest of houses, no kerb appeal at all, but it has gardens, parking, a reasonable estate location and convenient for everything - that would bring in around £975 pcm which would cover her costs and mortgage easily. .

Where is it again? I might bid myself on that kind of yield, its not as easy as that!!!!!!!!!!!!!!!

Its my opinion not to buy at the moment for an investment, If she really wants to buy a house to live in then, then its a different question, eventually prices will come back, so if she doesn't want to sell quick then I suppose why not, I think the main point is just because the money is there doesn't mean you should use it.

There is not the same frenzy there was before with people all desperate to get on the ladder, in 6 months time there may be better chances!

then again I could be wrong I after all bought shares in RBS!!!!!!!!!!!!

worried_mummy_4

I'm still waiting for mine second time around Jenner!

ess0two

What car does she drive,35 miles a day and spending £350 per month on fuel.

worried_mummy_4

Kev - do you really think I would tell you??? This is my baby trying to buy!

There are enough investors sniffing around and making low offers - but it does have a natural ceiling point whereby beyond that, you/I wouldn't look at it. I think £75K is plenty enough.

Yes she does ultimately want to buy it to live in it. The yield is there as a back up - should she lose her job etc, etc. But knowing my daughter she would take on any job to pay her way!

I think the way property/interest rates are going - there will be more people looking for more long term investments & prepared to gamble?

I would just be very uncomfortable for her to go over the £75K knowing what needs to be done.

geoffky

a6windows wrote: »

if your daughter can save £200 on her travel expenses a month then that is her mortgage paid if only borrowing as you say 30k .personnally i take no notice of the doom and gloomers who say property prices will drop further the only reason they will is because every body is talking about it and i would say the majority of people saying such things dont own there own house.if your daughter is planning to stay there for some time she wont lose over all after all if she left home and rented that would be dead money anyway.

so if we don't talk about christmas it wont come? another hugging fool...but i bet she can get it far cheaper next year....

Doozergirl

geoffky wrote: »

so if we don't talk about christmas it wont come? another hugging fool...but i bet she can get it far cheaper next year....

Can you not simply comprehend that for some people security is more important than waiting for every single property to be available at the bottom of the market? Or that the impact that life has on some people means certain moves are good for them.

There's a strong allusion to the fact that this girl hasn't had the best of times, wants a bit of security and if she can get a property at a well researched, good price now that theoretically insulates her against further price drops and this buy is for the medium term, then perhaps this is just the right thing to do?

If some can turn a profit in a stagnant market, some still turn a profit in a falling one then some people are also capable of making good purchases for their homes and others simply satisfactory ones. The OP thinks this is a good buy, if it turns out to be a satisfactory one, who cares? Fact is, she'll have a property, paid for virtually outright which, if she had to let it out (why would she, other than out of choice) will turn a profit for her better than a bank account and more than any monthly fall in property prices and if it is a bit of a bargain then, hey, we might have mitigated any drops in value at all!

Well done mum for wanting to help set your girl up for the future and for instilling the values in her that make her want to do the same. My mum didn't get the chance to help me but the values were instilled

Robert_Sterling_3

Cash is king.
A cash offer, early exchange of contracts, i.e. Weeks not months, lengthy period before the completion date if that is what the vendor wants. Estate agents dream.
Substantial discount on price. I have been there :j

poppysarah

Robert_Sterling wrote: »

Cash is king.
A cash offer, early exchange of contracts, i.e. Weeks not months, lengthy period before the completion date if that is what the vendor wants. Estate agents dream.
Substantial discount on price. I have been there :j

What decade?