Just Graduated, Started a company & am renting... good time to buy a house? :)

sirlambert209

Hello Money Savers :j
I was wondering if you could have a look at my situation and let me know what you think about buying a house with a friend.

We were thinking about moving into a new house share next year and I thought I'd consider a mortgage of some kind. This is because houses are so cheap at the moment, and we're renting, with no family, no obligations and still very much in student house mode.

I was thinking that we could buy a first time house between the two of us and have two friends (or non friends) move in, pay rent towards our mortgage and work on the house in our spare time.
We're both full time workers so this would be difficult, but I think it would be worth it.


So... It would be a shared mortgage between 2 good friends, lived in and and rented out to 2 other students. - So 4 persons all together living there.

Person #1
# 22 years old
# Recently graduated 2:1
# Started up a web design company which is doing pretty well (£12/yr take home)
# Currently renting in a low cost house (£62/wk shared between 6)
# £0 capital for a deposit, but could save a few thousand in a year

Person #2
# 22 years old
# Recently graduated 1st
# Started working for a company on £22,000 before tax
# Currently renting in a low cost house (£62/wk shared between 6)
# Could borrow £12,000 from a parent for a deposit.


THE IDEA:
Buy a decent, spacious, do up 3 bedroom house in Withington, Manchester for 4 people to live in. The mortgage would be taken on by 2 of the tennants while the other 2 rooms would be filled with student renters.

The house would be around £145,000 - £170,000
We would rent it out at about £270/month - £300/month per person (total income £550/month ish)


What do you think about this idea?
Any comments or advice would be much appreciated.

sirlambert209

by the way. we only need a 3 bedroom house because the back room could be converted into another bedroom. This is how we students live and we like it. :beer:

Wutang_2

you will need at least 10% deposit for a start

unite79

Nearer 25% in my opinion!

beecher

I'd keep renting and save up a deposit. I'm unsure in the point of buying though when you would be still doing the student flatshare thing. You're unlikely to make money out of and it would cost you more so what's the point?

Trying_to_be_good

I love the fact that you're so newly graduated you quote your degree class!

The advice here is good - you need to save for a deposit, plus recognise the costs that buying (and ultimately selling) incur, and how being on this mortgage would limit you when you would prefer later on to be buying either on your own or with a partner.

Keep renting (cheap) for now whilst you save for a deposit.

Pee

What will happen if you or the co-owner fall in love, get married, get pregnant/ get someone else pregant? You ned to have an agreement in place to cover this, but it is unlikely that the coowner could afford to buy that person out.

What happens if one or both of you lose your job/ business?

I bought a house two years after Uni, when I had just qualified, mainly because noone wanted to rent to smokers with a dog. I moved jobs 2 years later, and had I not bought when I did, I don't think I would have been able to buy my second house. However it was a long time selling, during which time I was paying rent and mortgage, which reduces the profit margin a bit.

In the long term, it's good to have the security owning a house gives you, but if you are renting a room, you have more flexibility.

It is nice being the landlord when it comes to the house arguments, though!!!