£38k savings - should I buy a flat or keep saving?

weehev

Hi there,

I think you should hold onto your money until you get back into employment, that way you have a healthy deposit to put down on a nice place to live.

Believe me when I say there are reasons the flats are so cheap - although i don't know paisley well, i work in a very similar area and it is not the kinda place you want to be living in - and not just on a fri/sat nite.

best of luck with your decision

xx

the_3rd_dynasty

weehev wrote: »

Hi there,

I think you should hold onto your money until you get back into employment, that way you have a healthy deposit to put down on a nice place to live.

Believe me when I say there are reasons the flats are so cheap - although i don't know paisley well, i work in a very similar area and it is not the kinda place you want to be living in - and not just on a fri/sat nite.

best of luck with your decision

xx

Ok thanks for your feedback and I may end up going down this route.

Here's another angle though. Taking the property at 5 Espedair Street as an example (http://www.futurepropertyauctions.co.uk/property_details.asp?id=13209), then if you look at the data on Nethouseprices.com then you can see that this property has been bought and sold quite a lot recently. In fact someone bought it at the end of April '10, for £14,500 then sold it barely a month later for £20,500. Is that not a tidy profit for whoever it was?

So imagine you bought it in it's current state, renovated it and then re-sold 2 months later, wouldn't that yield a profit? Flat number 4 sold for £40k earlier in June this year so I thought that may be an indicator of potential for number 5.

Nethouseprices data:

http://www.nethouseprices.com/index.php?con=sold_prices_street_detail&locality=&town=PAISLEY&street=ESPEDAIR+STREET&year=All&house_style=All&house_age=All&house_type=All&search_radius=15&northingToSearch=66320&eastingToSearch=24830&cCode=SC&outcode=PA2&incode=6NT&order=&start_limit=0&curPage=1

mynameisdave

You'd need to know what number 4 is/was. Is it a 1 bedroom flat? Because number 5 is only a studio flat with living room, beedroom and kitchen all in one room.

The fact that someone sold in June for 6k for than they bought in April is a red herring to be honest. The property sold for 25k in Jan. and 14.5K in April.

£22K in June 2009
£19K in November
25K in January 2010
14.5K in April
20.5K in June

They can't all be renovating it and selling it on so why is it changing hands so much?

the_3rd_dynasty

mynameisdave wrote: »

You'd need to know what number 4 is/was. Is it a 1 bedroom flat? Because number 5 is only a studio flat with living room, beedroom and kitchen all in one room.

The fact that someone sold in June for 6k for than they bought in April is a red herring to be honest. The property sold for 25k in Jan. and 14.5K in April.

£22K in June 2009
£19K in November
25K in January 2010
14.5K in April
20.5K in June

They can't all be renovating it and selling it on so why is it changing hands so much?

Yes, good points. I expect number 4 won't be a studio flat in that case. It's something I'd obvioulsy reasearch more should I choose to go down this route which at the moment is looking unlikely...

Guitar

Running_Horse wrote: »

You can get a flat in Washington for around £10,000 in a "gated community".

http://www.rightmove.co.uk/property-for-sale/property-30538379.html

Does gated mean a prison?

I grew up in Washington! My ex-girlfriend lived in that complex. I thought she was joking about the used needles in the starwells until I saw them myself.

googler

the_3rd_dynasty wrote: »

So imagine you bought it in it's current state, renovated it and then re-sold 2 months later, wouldn't that yield a profit?

You need to be aware that some lenders are becoming picky about not lending where the current owner has owned for less than 6 months - apparently linked to the money-laundering regs.

If you can refurb and sell in two months to a cash buyer, all good and well. But your audience who can get a mortgage may well be a limited audience....

Bubblyblue

How did your friend get on then i.e. did he make a profit/break even/lose money? Yes they made a good profit but remember this was in a rising market when anything would sell and they would also have made a profit without doing anything to the property, very different from the current climate.
Do not just jump in to this look at all options and do your research. Would you be happy to live there if you could not rent it out or sell it and had to wait a few years to break even or make a profit? Look at all angles. Also check if there is a factors and security entry for the building as I know not having this will put a lot of people off. If there is a factors check with them that there is not any outstanding bills or work due to be done etc.

<sebb>

I don't see where you have factored in the costs of buying and selling into the equation. You seem certain that prices won't fall, but if they just stay the same or only rise by a small amount, then you will still have lost out due to the fees payable.

puddy

how keen would you be to live there. i dont know the area but people must live there and make their lives there espcially if there is an infant school nearby.

if you cant get interest on that amount without it being eaten by inflation, that is another consideration, its a gamble to take if the property goes up or down, compared to whether the money in your account goes up or down due to inflation

if you live there, you will then be entitled to jsa/is because you wont have too much money to discount you from entitlement. if you dont, you have too many savings to claim unemployment benefits

if you dont live there, you have to either stay with your parents, or rent somewhere else, you wouldnt be entitled to housing benefits because you own your own property and the income would count as income for unemployment purposes.

if you dont buy it, or do buy it and dont live there, how comfortale are you to continue living with your parents?

for me, its not just about the money, what you would lose or gain depending on the house price situation, but its also about what bests suits your needs

the_3rd_dynasty

Well I think I've more or less concluded my thoughts on this for the moment anyway.

Fristly, if it were definitely a rising market then I'd be more inclined to go with it but there still seems to be a lot of uncertainty about which direction house prices are going which is making it sound risky. Not to mention whether there is a strong buyers market at the moment or in the near future too.

Secondly, I'd be better off finding work first as I don't know where I could end up geographically in the new role and should it be a long distance away, managing the property could become tricky.

The idea for this was mainly born out of the desire to own a property outright with no mortgage and interest payments. I think this is so attractive to me because the industry I work in can be quite volatile i.e. one minute things are going fine, then next minute they aren't and before you know it you're out of work. So I'll give it a few weeks/months and see what happens but it's certainly been worth inverstigating and getting a few opinions/thoughts on the matter.