What would you do?

solidpro

Hi All

Looking for some positive views...

I am a single father with two young boys, who runs a successful business. In the last few years I have saved up around £100,000 which is for buying a house. To my mind, I have two options:

1) There is a great house next door to my parents' house - wonderful location, 60s bungalow which has never been touched. Lots of scope for development, perfectly placed in the centre of a large garden. The perfect place to raise two boys. I have the opportunity to buy it privately from the old chap who owns it for £300k, and have a mortgage available. My plan was to buy it, live as is, and then save for another £100,000 to redevelop it as a new, larger home.

2) I could use the £100k to buy a small two bedroom apartment in a prestigious part of town. It may cost around £150k total, so I would have to pay off a small mortgage, which I could do in about 2-3 years. I would then own that outright, and could reasonably soon save another £50-£100k to buy a second place and rent out the first. I would pursue a similar plan to 1) but I would lose that 'perfect' house as the seller won't wait beyond next spring. However, it's far from the kind of place I would like to raise my two boys for a few years. We have a wonderful rented cottage in the country, and spend a lot of time outdoors. This would be more difficult in a flat.

Both to me have advantages....and disadvantages

1 enables me to buy a larger appreciating asset, which, with £100k spent on it, may quickly realise £500k in value. I would have great help from my parents and all being so close together (which I have no problem with) improves all our lives as a family. However, I would be taking on a £200k mortgage, which would make it more difficult to raise the redevelopment money. I would also be paying a large amount of interest, which I hate.

2 enables me to not throw money away in interest, and reasonably quickly own an asset which generates good money on a monthly basis through rental. It's 30 minutes from my parents, will only be leasehold (which I always find an uncomfortable compromise) and I will be in a rabbit hutch amongst rabbit hutches.

Which way around would you do it?

HelenDaveKids

Personally if could afford, the first one, as parents nearby must be a huge bonus if single parent plus the cost of buying selling then buying again, with the cost of move etc seems a waste of money so if could be avoided I would. Sure the cost of that could be factored in towards interest costs.
Good luck

KolaKube

Snap HDK - parents nearby is a winner! Thats one of the reasons we moved back from England to NI xx

solidpro

Ok, but both those views are, I would said biased because of my parents. I would consider this a financial decision rather than a family one. I've raised both boys for 2 years since I was alone with very little help from anyone. My parents are lovely but fairly uninvolved.

Its really just because they talk to their neighbour that I know about the house, rather than specifically trying to find somewhere nearby.

I have trouble getting my head around a mortgage which I will end up paying £20k a year and £15k of it being interest....

tootoo

Parents aside, I would go for the first property. I'm guessing the price is good for the property and as you say it has plenty of scope.
Children don't need a prestigious part of town. But a garden for them is fab.

jewelly

I'd go for the first option. Taking on a mortgage and paying interest is the only option for most people. If your business is successful, and continues to be so, you could overpay the mortgage/reduce the term and save on some interest.

EchoDelta

tootoo wrote: »

Parents aside, I would go for the first property. I'm guessing the price is good for the property and as you say it has plenty of scope.
Children don't need a prestigious part of town. But a garden for them is fab.

I agree with this.

jackieblack

solidpro wrote: »

Ok, but both those views are, I would said biased because of my parents. I would consider this a financial decision rather than a family one. I've raised both boys for 2 years since I was alone with very little help from anyone. My parents are lovely but fairly uninvolved.

Its really just because they talk to their neighbour that I know about the house, rather than specifically trying to find somewhere nearby.

I have trouble getting my head around a mortgage which I will end up paying £20k a year and £15k of it being interest....

If you can afford it then I would go for the first option because this is the best option for the children, great house, nice garden, grandparents close by if needed.
That would be far more important to me than any financial benefit you think you might get from your second plan.
I would put the children first, before financial advantage.
You will be amazed how quickly childhood passes.

solidpro

You will be amazed how quickly childhood passes.

Since hearing that phrase so many times in my life, along with reading an article about the top 5 regrets people speak about (not spending enough time with kids/working too hard) I firmly decided to take as much time as the courts would allow to be with the boys.

But the sentiments are right generally, cooping them up in a flat for a few years (the best years) isn't what life is about.

Arkers

Sounds to me as if you've already made up your mind. We have done something similar with our bungalow, and when I look out over the field from my kitchen window I don't have one single regret. Good Luck!:D

gallygirl

I agree with the others, the first seems the best option and if you hate paying interest then get over on the MFW board and get inspired to get rid of it .

How old are the boys? If young they'll love the excitement of diggers, mixers etc being around. If older they can have input into the plans and would love to see the house they planned come to fruition.

Good luck.