Renting vs Buying Outright

SteveRadner

JimmyTheWig wrote: »

Buying yourself somewhere to live is generally a smart decision.
As well as being an investment, you've got somewhere to live.

Be sensible when looking for places to buy. Try to imagine what it will be like to sell the place in 5+ years time. E.g. if it's in a trendy area now (and so the price will be inflated), will the area still be trendy in 5 years time? If it's a new build you'll be paying a premium for being the first person to live there - but the person you sell to in 5 years time won't. If you like Victorian or older properties, remember that they may have Victorian or older electrics, plumbing, heating, etc which may need money spent on.

If in doubt, get other people's opinions. Ask people you know who have bought flats in the past what they think. Feel free to ask on here.

Get a survey done, even though you won't need one for a mortgage.

In some ways, being able to pay for the place outright makes it less of a risk than someone with a small deposit. May sound counter-intuitive as you will be stumping up more money than them but in both cases you become liable for the full property.
Imagine buying somewhere for £200k and finding that it's a bit of a dud and actually only worth £180k. If someone buys it with a 5% deposit and 95% mortgage they will be in negative equity - they'll owe £190k on a property worth £180k. But in your case you'll have just lost £20k (on paper) of the money that you had.
Obviously no-one wants to lose £20k (which is why I spent most of this post saying about being careful when you buy) but it isn't so harsh for someone who has got £20k than someone who hasn't.

Thanks! All great advice. Trying to find something affordable and ticking those kinds of boxes is the tricky bit. I'm hoping that me being a cash buyer might help me to get a good deal.

SteveRadner

needabed wrote: »

A couple of example properties:

http://www.zoopla.co.uk/for-sale/details/34417109 - Great 11% Rental Yield.

http://www.zoopla.co.uk/for-sale/details/34387956 - Being ideal for first time buyers and investors alike.

That first one is in a horrible but potentially 'up and coming' area but I'm not sure I can live in it and I won't have any money left to do it up straight away...

Thanks for the ideas though... and for linking through to Zoopla as I've only been using Right Move so far but should check them all out I think...

needabed

SteveRadner wrote: »

That first one is in a horrible but potentially 'up and coming' area but I'm not sure I can live in it and I won't have any money left to do it up straight away...

Was alright when I lived there, nice park nearby. 11% rental, so £20k income, current renters going in March 2015. By the time they've gone you would have enough saved to do it up.

JimmyTheWig

Are you the vendor, needabed?

SteveRadner

needabed wrote: »

Was alright when I lived there, nice park nearby. 11% rental, so £20k income, current renters going in March 2015. By the time they've gone you would have enough saved to do it up.

Do you mean you lived in this property or the area? I'm sure the area is okay, it's just the flat that needs a lot of work.

SteveRadner

JimmyTheWig wrote: »

Are you the vendor, needabed?

Good question!