First time buyer help

joseph9a

Hi guys,

I have some savings tucked away and am planing on buying my own place hopefully in the next 18 months. I just wanted some help with morgatges. The aim for me when buying my first home is to hopefully buy the propperty spend 10-15 thousand on it and hopefully get back an extra 20-25 thousand on top of what I originally paid. So in effect id be making the money I paid back, the money I put in back and a small profit (which would probably be how much it would be to rent a place for a couple of years.)

So say I wanted to achieve all of this which mortgage would be best for me? Would an interest only morgatge be worthwhile or a mortgage where I buy it outright. I'm only planning on staying for a year then putting it up for sale and then it might take an extra year to sell, so I'm expecting to stay for 2 years. Can anyone offer me some advice as I'm a first time buyer and I could do with the book an idiots guide to mortgages to be honest haha

Thanks

Joe

somethingcorporate

How do you expect to make such a profit in a static / declining market?

If it was as easy as spend £10k to make £25k+ profit we'd all be property developers, unfortunately we are no longer in the market where just buying a house and holding on to it for 2 years would guarantee good capital growth.

If you did what you said I would expect you to break-even after considering all costs. Buying with a view to hold for such a short time unless you know what you are doing is a recipe for disaster.

joseph9a

I'd be prepared to stay there if there was no profit, but aslong as I broke even or only made a small loss, i'd probably just move onto something new. Can I just as for first time buyers what is usually the percentage for the deposit? Oh and by the way I'd be doing alot of the work myself so when I say spend £10-15 thousand it would probably cost £20,000 with a labourer so thic could be part of my profit

joseph9a

i've seen a property for £85,000 in a nice area that just needs a little TLC also there is space to add a garage, room above the garage and add a conservatory. If i put down a 15% deposit and lived there for lets say 3 years and sold it for £105,000. Can anyone tell me how much I'd get back roughly from different mortgages? I'm thinking I'd get my 15% deposit back plus probably an etra 10% for what i'd paid into the mortgages for the 3 years plus. So in that case 25% of the sale: £26,250

Am I way off here or does it work like that?

~Beanie~

What do you mean by Can anyone tell me how much I'd get back roughly from different mortgages?

In your example above, if you bought a house for 85,000 and put down a 15% (£12,750) deposit then you would need a mortgage for £72,250. If you then sold the house at a later date for £105,000 and repaid the mortgage (assuming it was interest only and you have paid nothing off the capital) then you would have £32,750.

You need to then take off the amount that you had spent doing it up, say £15,000, which would leave you with a profit of £17,750. Then you will have spent money on solicitors fees etc which I haven't accounted for. Is that amount of profit worth it as you would still need somewhere to live.

dimbo61

Unless you are a plumber with a brother an electrician, an uncle who is a builder then you need to pay for professional with the right qualifications part C, gas safety checked ETC
You cant buy a property ( unless paying cash ) without a kitchen, bathroom etc
Time is money in property development I know
So buy a property so you can live in it and dont pay rent to a landlord not as an investment in the current market.
Dont forget buying and selling costs

Caz3121

Look at the threads on this board with people trying to remortgage, it is just as likely in the current market that you buy for £85k, spend £15k doing it up and 3 years down the line it is worth £80k
...note that many of the property developer programs on TV are years old when it was a rising market, people do make losses too

joseph9a

dimbo61 wrote: »

Unless you are a plumber with a brother an electrician, an uncle who is a builder then you need to pay for professional with the right qualifications part C, gas safety checked ETC
You cant buy a property ( unless paying cash ) without a kitchen, bathroom etc
Time is money in property development I know
So buy a property so you can live in it and dont pay rent to a landlord not as an investment in the current market.
Dont forget buying and selling costs

Thanks to everyone for the advice. Just to add though, my girlfreinds dad and uncle are plasterers, my uncle is an engineer (Draws up plans for extensions etc.) I have a freind who is a tiler, and a roofer aswell, and I've done a bit of bricklaying myself. And my cousin is a fully qualified electrician.

I'm pretty good at DIY myself when I have the correct tools, and I have freinds I could call on.

Thrugelmir

joseph9a wrote: »

Oh and by the way I'd be doing alot of the work myself so when I say spend £10-15 thousand it would probably cost £20,000 with a labourer so thic could be part of my profit

£10,000 of labour?

Hard to see any value in that................

dimbo61

If you have the skills and friends/family with the skills then doing up an old property can still make money if you do it in the right way!
New wallpaper wont but a new extension adding extra bathroom / bedrooms will.
But as I said buying and selling costs can take alot of profit out of property development just take the " homes under the hammer programme "with a pinch of salt

brit1234

Its been widely reported that extensions, upgrades to houses in a falling market rarely recover there out lay. You could loose a lot of money for no benefit.