Silly idea or good investment?

burnoutbabe

i would say NO

you say its only an extra £100 a month OVER the current mortgage Plus all your expensive loans. Well why have you got all these extra loans? are you spending too much? won't a 7 bed house need a ton of extra furniture stuff.

If you just paid off the loans with the inheritance, and use the rest to pay off the mortgage, save (i can't see that you have any savings), that would make you much more financially secure than you are now. Covering risks of redundancy or sickness in the future.

buying a massive house just seems silly when it will squander all your inheritance and leave you no better off each month.

and not sure you can rent out as a seperate dwelling a granny flat - it would be part of your house, not got seperate water/council tax etc. So would only have a limited market of people who'd be interested.

Pee

CH27 wrote: »

You say you want to rent the granny flats or rooms.
How will you ensure your children's safety?

To be fair, this is probably the same as having neighbours who you can't vet or move on.

Person_one

I'm just imagining how much of a nightmare it would be to keep a 7 bedroom house and huge garden clean and well maintained! Can you afford a cleaner and a gardener? Would you have an emergency fund in case the roof needs replacing or the whole place needs rewiring within the next 5 years or so?

Brighton_belle

If you go ahead with this, then you absolutely must prioritise life insurance that covers diagnosis of a 'dread disease' as well as death of one of you.
You never know what health problems are around the corner in life and the stress of losing your home because your finances collapse when your wife/husband unexpectedly dies or been diagnosed with cancer or a multitude of other conditions and can no longer work would be horrendous.

Ideally, anyone with dependent and a mortgage should already have this in place.

Jesswithwings

burnoutbabe wrote: »

i would say NO

you say its only an extra £100 a month OVER the current mortgage Plus all your expensive loans. Well why have you got all these extra loans? are you spending too much? won't a 7 bed house need a ton of extra furniture stuff.

If you just paid off the loans with the inheritance, and use the rest to pay off the mortgage, save (i can't see that you have any savings), that would make you much more financially secure than you are now. Covering risks of redundancy or sickness in the future.

buying a massive house just seems silly when it will squander all your inheritance and leave you no better off each month.

and not sure you can rent out as a seperate dwelling a granny flat - it would be part of your house, not got seperate water/council tax etc. So would only have a limited market of people who'd be interested.

Thank you. To clarify... we would be clearing ALL our loans -whether we stay at this property or move to the big property, with the inheritance money. The new mortgage would then be, at most, £100 more than we are paying now (considering we are currently paying for high interest loans and we won't be in a month or so) - for a property 3 x the size of the one we are currently in, in a better area and one which we could potentially make money from by renting out to foreign students (and I doubt any mortgage company would have a problem with that as half the town does that in their standard 3 bed semi's) we can afford the extra £100 by not needlessly spending, and cutting back on luxuries like sky televison etc. PLUS if we do have students / travellers there is the addional income that this provides.

WRT furniture, the current tennants are downsizing and have said there is plenty of furniture that they will be leaving should we need- (for example they intend on "getting rid" of a lot of bedroom furniture amongst other stuff).... or they will freecycle. If there is anything we DO need (and dont forget that we already have a 4 bed house, so not lacking in lounge/kitchen/dining room furniture...) we can always search gumtree and freecycle for furniture should we find we are lacking. I do not intend on going to John Lewis and manically spending!!

WRT our savings, well... you are right. They are not plentiful and this is a consideration. However, I have not long gone back to work after maternity leave and this is the reason they have depleated. I dont think another baby is on the cards for our family and therefore, this situation will improve.

Our life insurance is certainly something that we need to look into. Currently we have life insurance on this property plus we both have life insurance with our employer... but I will look into whether this will be enough - thank you

and as an aside.. is it really "squandering" our inheritance or is it "investing" out inheritance? I have always been told the best investment you can make is in property - and I would never squander such a precious gift on shoes or holidays etc and I am now concerned that buying this house would be a very iresonsible way of spending Grandad's money.

Jesswithwings

Person_one wrote: »

I'm just imagining how much of a nightmare it would be to keep a 7 bedroom house and huge garden clean and well maintained! Can you afford a cleaner and a gardener? Would you have an emergency fund in case the roof needs replacing or the whole place needs rewiring within the next 5 years or so?

I feel I may have implied somewhere along the line that it is a stately home, with acres upon acres of gardens?! it really is not. Certainly the house is no more than I can handle cleaning in a day and the garden, while bigger than we currently have, is very managable - its all on 1 level and very grassy. I have a decent lawn mower, and a husband with a passion for weeding so I dont feel that I will need a gardener (we really are not talking acres here...) and DH actually helped replace the whole roof 5 years ago, so it should be good for another 70 years.

Pee

How do the rest of the family feel about maybe doing without SKY to afford the new house?

That could be a problem.

If you invest in the stock market, that could go up or down. If you put the money in the bank and get 3% interest, inflation could be 5% and effectively devalue your inheritance. At least with the house you'll have plenty of additional space as a family.

Jesswithwings

Pee wrote: »

How do the rest of the family feel about maybe doing without SKY to afford the new house?

That could be a problem.

If you invest in the stock market, that could go up or down. If you put the money in the bank and get 3% interest, inflation could be 5% and effectively devalue your inheritance. At least with the house you'll have plenty of additional space as a family.

I wont lie to you Pee, the thought of living without SKY is scary for me!! It keeps me sane!! there are a lot of freeview channels available though and we have increasing concern about the amount of TV the children watch as it is. The kids watch their programmes, and DH watches a lot of sport (currently he is boring the pants off me with some grand prix stuff he has recorded!!) but he is happy to get rid of it. I dont really watch telly, but I think the children will be a bit disappointed that they won't be able to watch Mickey Mouse Clubhouse on demand but SKY is about £50 extra a month, and even if we stay in our current house - I suspect we will be dropping SKY .... it is a LOT of money to pay to sit in front of a box.

meritaten

you say its only an extra £100 a month more than you are paying now? and it has a rentable 'granny flat' and extra bedrooms (lodgers who would probably make up that shortfall?). its a risk yes - but if the house is in good condition and you have a good prospect of getting tenants/lodgers and you dont mind sharing the house - then go for it.
everything in life is a risk and if you want that house and its the only way of getting it - at least try! otherwise you will spend the rest of your life thinking 'if only we had ...............'

Jesswithwings

meritaten wrote: »

you say its only an extra £100 a month more than you are paying now? and it has a rentable 'granny flat' and extra bedrooms (lodgers who would probably make up that shortfall?). its a risk yes - but if the house is in good condition and you have a good prospect of getting tenants/lodgers and you dont mind sharing the house - then go for it.
everything in life is a risk and if you want that house and its the only way of getting it - at least try! otherwise you will spend the rest of your life thinking 'if only we had ...............'

Thank you. I am an extremely cautious person - the polar opposite of my husband! I'm trying to balance getting our dream house with all the scary stuff that comes with it. It should be quite affordable, and one website I found (to rent out to travelling students and tourists) I could earn £1500-£2000 a month - during peak times (tax free until £4K or so) which would cover the excess mortgage, provide some savings and probably fund the extra luxuries like SKY if the kids are mourning the loss of Mickey.... and I might even have some left for a cleaner so I can come on here and drink coffee while someone else cleans my house :rotfl:although I'm one of those freakish people who find cleaning thearpeutic

S