Am i getting carried away ?

Messsiah

Heya guys !

I've been on the lookout for a house to buy for myself to live in. Having followed some of the great tips from Andy's post ( the sticky one ! ), I have kept a good raport with some select estate agents.

One of these informed me about a house for sale, which had come on the market, after a prolonged Probate dispute.

The house is in pretty bad nick, but on the market for £100k less than other houses on the same street ( which are in good condition ).

The house is going for £365k, which is about my MAXIMUM budget, but it needs work done on it. I have no building experience, and don't know any builders either...so I am likely to pay full whack for any renovation.

Given the potential profits, should I go for this, as an investment... and forget buying my own house, till I have renovated and sold this ?

Its a 5 bedroom property, and i don't need anything that big for myself !

BAsically..looking for some advice from any ppl here who are into renovating etc etc. Its a MASSIVE gamble for me to invest everything to go for this property. Is it better to start off with smaller properties ? Or should i just grab this, as the potential is so big ?

Any tips/advice is much appreciated

~M~

wecanhelpu

Where will you get the money for renovation?

tillboy

You say the price is at your maximum, what happens if (when) interest rates go up could you still afford it and renovate it

Messsiah

Northern Rock, do a mortgage scheme, where they can provide you with a loan of upto 5% of the property value, so i would have about £15k extra. This would essentially be the moeny for the renovations, and as for the rest..which there will inevitably be, i might consider further unsecured/secured loans.

I have no debts at all at present, and a good credit history.

~M~

wecanhelpu

15k won't go very far on a 5 bed house. From what you have said about the place, and depending on what needs doing, you're probably looking at anything from 30 to 50k

Have you got any savings?

Doozergirl

With something as big as a five bed, if it's in bad enough condition, it could cost you £100,000! Your repayments are going to be big, your Stamp Duty bill is going to be big, even before you start renovating. By the time you've done it and turned it round, I can almost guarantee that you will have spent £20,000 in fees alone. Once you have paid your building contractor directly and and very painfully through the nose, the potential profit is likely to be very small considering the outlay.

If it is an investment property and you don't move in to live in it, you will be also be liable for Capital Gains Tax. You would be far better off buying something under the £250,000 Stamp Duty threshold that you could live in for a while.

You have to learn somewhere and a five bed house probably isn't it, you stand to lose out big time if you don't manage this properly. Without experience, you will find it impossible to budget.

If it's on the internet, you can pm me a link and I'll let you know what I think. Don't worry, I won't buy it - all my money is tied up in a five bed house!