Chalet as an investment

oldbob

I have a long term plan to emigrate to Bulgaria when i retire in ten years. I live in a council flat and spend too much on rent. I recently had a win on the horses and with my Axa fifteen year savings plan about to pay out i can raise about £40,000. I have an idea to buy a chalet or other low cost residential property on the Isle of Wight. My intention is to live there for ten years then sell it and emigrate. I know most people would think it is madness to give up a council property but the rent is taking up 40% of my income and i would prefer to save that money for my retirement. There is no way i could possibly afford a real house and i would not want to buy anything in Portsmouth where i live now. So my question is what are the pros and cons of this idea? Will a chalet increase in value? Is this the best way to avoid paying rent for the next ten years? Any advice or opinions appreciated.

maninthestreet

Chalets often have restrictions on the occupancy e.g you can only live in them for 11 months a year.

Jonbvn

Sorry but the plan is flawed. You will not be allowed to live in a chalet on the IOW on a permanent basis.

Oldernotwiser

Where will you work even if you could live in a chalet? Unemployment was high on the IOW even before the recession and wages are incredibly low for the south east.

Just read that you currently live in Pompey so presumably work there. Have you looked at the price of ferry fares? You need to budget for over £100 per month to cross fromthe Island.

PasturesNew

Chalets have other problems apart from the issue over not being able to live in it as a permanent home. e.g. there's often a £2000-3000/year service charge/rent on the land (chalets are just there on a license, not even a lease). You are renting the land it stands on and can be given notice to quit for many reasons. Once given notice to quit it's worth nothing and your only option is to start again.

You can't receive mail there either - and broadband might be an issue. Both these problems are because you can't live in them full-time.

A lot of sites will want you to prove you have a "real permanent address" and to provide this information on a yearly basis.

When you do leave the site, because it's shut down, all the services tend to be cut off entirely - and you have to drain down any systems, then fill them up again when the site's open again.

If you want to live cheaply, why not just live somewhere where you can buy a place for £40k (they do exist).

Jowo_2

Are you working or on benefits? Are there any restrictions in where you want to live in the UK?

A High proportion of income spent on rent would not tempt me to give up security of tenure of social housing to live in a tin box for a decade, then become sick and infirm in a poor eastern european country miles with rubbish infrastructure away from family and friends.

Other things to consider -

Increase your income or decrease your living expenses (plenty of advice on the forum how to do this).

Mutual exchange - find a cheaper social housing property.

Review your benefit entitlements, now, and when you retire to get an idea of your safety net.

Look into co-housing and housing cooperatives.

The Shelter website has information on living in caravans/mobile homes so you can understand the problems in that area.

oldbob

I work a few minutes away from where i live. I have worked there for twenty years and i usually work at home two days a week as the job is basically just pottering about on a computer. This could be extended to three or possibly even four days, so i really only need to go in once a week. I was hoping to buy somewhere on the IOW with the intention of living rent free then selling at a profit. I already have a plot of land in Bulgaria. I bought it for just £3000 a few years ago and it is now worth £8000. I wanted to retire at 55 but i am 53 now and there is no way i will be able to afford it. I would prefer to stay in the south, with the IOW my first choice, but if i could find a cheap home in a nice area i would consider anywhere. I have been on the homeswapper site for two years and nobody has shown any interest. This is a very rough area and it is getting worse. There is a lot to consider and i will have to think carefully about a few points mentioned on here, especially the site fees and permanent residency problem.
Thanks for all the help

Running_Horse

oldbob wrote: »

I live in a council flat and spend too much on rent.

You want to try private renting!

oldbob

Running_Horse wrote: »

You want to try private renting!

I did that for fifteen years before the council gave me a flat. The council rents are still cheaper than private, but they are catching up. I pay £90 a week for a one bedroom flat with needles under the stairs and bars on the windows to keep the junkies out.

SouthCoast

I recall reading that mile for mile the IOW ferry crossing was the most expensive in the world.

Fire_Fox

Why don't you buy your council flat, house prices have dropped and you'd get a discount?