Is it the right time to buy??

missk_ensington

Sparkle- My personal plan (not saying its fool proof or ideal for everyone) is to sell my property (that Ive bought for 92k) for 110k or above, buy again for 110k (keeping my 82k mortgage the same, just putting more down) sell that for perhaps 130k after renovation- after this I can either downsize back to maybe 95k and the 35k (ish) I have pay off the mortgage. Or I could buy again at 130k and so the chain goes on...Hence how I will repay capital on IO.

I have a fixed rate for 2 years, so I'm keen to pay some off in case interest rates do increase. I can't overpay for 2 years as the rules state, but after that I will.

For 1000th time, I know it is a risk, apart from maye ISA's all investments carry an element of risk. Thought stamp duty was 120k??! Perhaps I've got my info wrong, I thought they'd doubled it from 60k? If its 125k threshold then even better!

I also live up north if that makes a difference, perhaps in London/down south it'd be much harder with FTB properties being so much more. Where I live I could get a 2 bed terrace for 70k, which you obviously couldn't do in London.

My mum has benefitted from price booms, however her company isn't just going to stop now! She's still buying up, although as Ive said, she's moving away from buy to let, and towards buying Freehold businesses as I mentioned earlier, and renting out the accomodation above, renting the business for 400-500 a month and selling the leases for 35k+ every 12 years. At some point, when convenient for her, I think she intends running a restaurant herself but at the mo she's not got enough time.

I think there is money to be made on property, but its not fool-proof, I'm not suggesting for one minute you can buy any old house, and oooh 12 months later you've made 20-30 grand! There are many more factors!

MORPH3US

Snow_Dog wrote:

But you don't want to hear that, just repeat after me :-

Get on that ladder,
houses only go up in value
there's no risk
no one ever loses

Ask a simple question..... :rolleyes: :rolleyes:

M

claz

lynzpower wrote:

I will have my work pension, maybe a state pension and other investments I expect. PLus Im likely to inherit my paretns house and possibly the inlaws house, so im not too stressed. i never said I would rent forever. but you said "you are never better renting" of which I replied, tripe, as I have shown yes in fact you are better off renting IN SOME CASES

Incidentally if you rent from a housing association or from the council, its the most secure tenancy you'll ever have, no one can take it away from you unless you make poor choices about your own behaviour whilst resident in the property.

you cannot depend on inheriting property as if your parents or in laws have to go into a residential home or a nursing home the goverment can make them sell the property to pay for it !!!

its sick i know, but it is the truth

missk_ensington

PS. My house price increases are not reliant on a national price boom, the houses I buy are grossly undervalued due to their state. You cant buy a house that just needs a lick of paint and some new carpet to get ££££'s. I'm talking full restoration! I look at what the rest of the street sells for using Land Reg data, and say they all go for a minimum of £120k then I look for one massively below that and checkit out, if its the same size, same number of beds, same location... etc I regard that a good investment.

meanmachine_2

Given how transparent the housing market is these days, I doubt you'll find any "grossly undervalued" properties. But good luck anyway.

I hope you've done more research into renovating than you have re: the finer points of government taxation.

I can't help feeling these come latelys are exactly the sort of people who, in 1994 would have been warning everyone away from property, as it "only goes down in value".

Still, the bouyancy of the market in the last two years has proved me wrong, so what do I know?

And property investment is classed as a high risk strategy because a) the market is volatile (although very slow to change, unlike the stock market) b) you're using someone else's borrowed money, and woe betide you if you start losing their money, and c) it's very hard to exit the market, when needed, due to low liquidity.

mystic_trev

What with higher IRs later this year, a record level of debt, BTL being this years "must have accessory" Then people flooding the market with property prior to the introdction of HIP's next June - I think we're nicely set up for a house price correction - sometime next year? - meanmachine

missk_ensington

meanmachine- "I hope you've done more research into renovating than you have re: the finer points of government taxation", what you on about?

I have found a property undervalued- all the rest selling between 115-155, I paid 92k. (Thats based on 13 propeties sold in the last 14 months, mid terrace, 3 bed on same street) Its nothing to do with property value across the board, its like anything, you have two identicle cars- one's been in a crash, the seats are stained, it needs new tyres and looks a mess, the other's had one careful owner who's really looked after it. It's nothing to do with what those type of cars are selling for, clearly one will be worth substantially more than the other.

missk_ensington

PS. I'm not buying to let, I'm buying so I have somewhere to live with my son! Come what may, I still need somewhere to live so to some degree its nesting, not just investing. If I were renting I'd probably be paying somewhere in the region on 500-600pcm for something half decent, so I'm saving money too cos my mortgage is 380 a month.

If the worst happens I'll just have to sit tight and stay in the same house for longer than I anticipated, maybe several years until the value increases enough to move again. Interest rates probably will go up, but a lot of places offer Fixed rates for 5 years

lynzpower

claz wrote:

you cannot depend on inheriting property as if your parents or in laws have to go into a residential home or a nursing home the goverment can make them sell the property to pay for it !!!

its sick i know, but it is the truth

I answered this point a few pages back

Arch-Angel

missk_ensington wrote:

PS. I'm not buying to let, I'm buying so I have somewhere to live with my son! Come what may, I still need somewhere to live so to some degree its nesting, not just investing. If I were renting I'd probably be paying somewhere in the region on 500-600pcm for something half decent, so I'm saving money too cos my mortgage is 380 a month.

If the worst happens I'll just have to sit tight and stay in the same house for longer than I anticipated, maybe several years until the value increases enough to move again. Interest rates probably will go up, but a lot of places offer Fixed rates for 5 years

But if you've living in the house whilst you renovate it - and this is a big assumption I admit - the work is probably taking a lot longer than it would if you were not living in it. Add to the fact that you have a son, in full-time uni (if I recall correctly from previous posts you have made) etc., and - well, what kind of life do you have? Don't mean to be critical, but your plan to renovate your way up the property ladder and be mortgage-free in 10 years seems to depend on everything going to plan.

As I posted before - the model of buy-renovate-sell does work and does generate profit; there are a lot of people who don't have the time (or simply can't be bothered with the hassle!) of renovating - they want to buy a house that's finished!!! However, I wonder if you are seeing the potential hidden costs - or are you dazzled by the profit your mother has made?

IMHO of course!