Better investment?

ADz_3

I'm 20, and need to make a big decision.. been hearing varying responses from family/friends so thought there may be some experts on here that can analyse the situation better than me!

I'll have approx £130k to buy with. 90k Mortgage, 45k cash deposit (5k spare for additional costs)

Now, decision is..

1. Buy in my local town, desirable area; recent years it's boomed and house prices have rocketed with lots of new properties developed. Very popular due to 2 excellent schools and a historic town.

Here i could manage a 2 bedroom (nice sizes) 1 bathroom etc studio/apartment (basically brand new but at the end of the day an apartment)

2. Buy in an adjacent town, much less desirable area, more in terms of property for your money in the sense that it would be a 2-3 bedroom place, 2 bathrooms and semi or terraced. (Would be an older property, less efficient in terms of heating etc) However more suitable for a wider market though as would appeal to families too?

I intend on getting a lodger in, so assuming property 1. would be advantageous for young professionals as it would be exemplary clean & modern. prop 2. has the spare bathroom which i suppose is a plus for a lodger

which has more potential for success in increasing it's value? A studio/apartment in a nice area or a terraced/semi detached house in an opposite end of the spectrum area?

and which would bring in more income through a lodger?

help!

MortgageMamma

It depends how undesirable the undesirable area is? To rent it would be useful to consider a property close to transport links and recreational facilities, not too far from the nearest major city or uni, and accessible parking and a nice looking area is essential.

As for increasing house prices, its like how long is a piece of string. I think a house would hold its value over a flat, and likewise be more marketable, and character always retains value and appeal over new builds, but character may not be in your price bracket, unless you look for an old terraced style building

ADz_3

It's liveable (if that's a word..!) where property 2 is..

I personally would just love a flat and would rather have one any day over a house! but deep down i know a house is probably the more sensible option. I mean the property 2. is by a huge train station, close to the town centre, close to a bus depot etc + less than 2 miles from the local uni & college. Only downside is parking is generally on the road fighting for spaces and rather 'same old' on the outside look about the place and reputation for being a bit rough..

MortgageMamma

Hmmm, but what you have to remember here Adz is this is predominantly YOUR HOME. Why buy a property specifically with a lodgers needs in mind? Your lodger could be there two months then gone. you will own that property a long time. I think you should stop thinking of the lodger and think of yourself. You wont have any problem getting a lodger for a flat (unless they want to bring pets perhaps), and it might not be the best idea for an investment, but if your planning to LIVE in it and not just sell it in two or three years then its important to get someting you are happy with!

Debt_Free_Chick

ADz wrote:

It's liveable (if that's a word..!) where property 2 is..

I personally would just love a flat and would rather have one any day over a house! but deep down i know a house is probably the more sensible option. I mean the property 2. is by a huge train station, close to the town centre, close to a bus depot etc + less than 2 miles from the local uni & college. Only downside is parking is generally on the road fighting for spaces and rather 'same old' on the outside look about the place and reputation for being a bit rough..

I'm confused as to whether you want a home or an investment .....

Are you clear on this? If you're not, then you'll end up buying for the wrong reasons. Not only will you end up miserable with your choice, but it could prove expensive to unravel!

If you've not done so already, then you simply must work out what you want, as a priority. So ... a home (with the option to allow a lodger to share it) or an investment (which you happen to share with your tenant).

Cheers

Debt_Free_Chick

MortgageMamma ... you posted as I typed. Spookily the same message though

ADz_3

That's very true!

But investment wise, you say it might not be the best for an investment.. that kind of thing worries me. I mean mortgages charge interest (lol stating the obvious eh!) but i mean if i buy, and this property breaks even in resale in 3-4 years time (when the likelyhood is i'd be selling up) then that would be a momentous blow and almost seemingly a waste of time through the money i've raked up in interest charges to date..

Can't see a straightforward way without comprimising in one way or another whether it be location or money.. eek.

so general consensus is: houses will generally and i say this loosely as obviously there's other factors that contribute, will offer a greater return on an investment as opposed to a studio/apartment in 3-4 years? and even 5-10..

ADz_3

My reply was a little late, internets so slow at work!!

I want this as my home for 3-4 years. I need a lodger if i want savings.. ie everything from the lodger into a savings account, everything else on the property and my lifestyle.

I want whatever i buy (as does everyone) to generate a nice return on re-sale, so choosing the right property, good location, best market etc is important i guess.. which is why i can't decide which is the worthier option as both have their advantages and disadvantages!

kiran413

anyway how much do you earn and which city are you buying your property in?how come you are able to get a huge amount of mortgage.what's the secret?what's the interest rate?
i am 22 and just got mortgage of £60000,savings of 30k and earn 15k.I am looking for a property around 800-900k pounds but looking for a property in london.

lynzpower

Adz,

It really depends where you are.

Is the "less desirable" area going up or down market, ie more or less crime? Is it bAD? Or just a bit tatty?

Personally, Ive got a flat & id give my eye teeth for a house, the noise in flats is just too much for me to bear ( new build, but im oversensitive)

However, If your propertybreaks even in 4 years when you come to sell, really, so what? Youd have to pay rent somewhere, so unless you have a mystery benefactor who would let you live somewhere for free for 4 years up your sleeve then whats the problem?