Buying a cheap house while renting

bigmaz

Annisele wrote: »

If you don't have any deposit, then your plan is just plain flat out impossible - sorry. Most BTL lenders require a deposit of around 25%. It can sometimes be slightly less than that, but it's never zero.

I'd also suggest that a flat worth only £30k has something wrong with it, and whatever is wrong might make it unmortgageable.

In addition, house prices don't all move in the same way, or in the same direction. It's quite possible for three bedroom semis to go up in value by 10%, and have one bedroom flats fall in value by 5% over the same period.

Sorry, I thought I had already said that I will be saving for the deposit first, I know I need that :P

Well isnt that the risk that anyone takes when buying property? It could go up or down in value.

You dont know if it is unmortgagable, you are just assuming, just because its cheap, some areas are just cheap, fair enough if there was other flats in the same area that were a lot more, but they are all the similar price.

Cautious_Optimist

bigmaz wrote: »

Thanks for your advice. At the start you say everything will be more expensive, so surely that means that the flat will be worth a lot more too.

.

If the flat has a short lease period, then it may drop in value.
But the house you wish to buy, will probably have increased in value.

bigmaz

Cautious_Optimist wrote: »

If the flat has a short lease period, then it may drop in value.
But the house you wish to buy, will probably have increased in value.

You seriously telling me it will drop in value after 10 years from £30k?

Cautious_Optimist

Can you post a link to the sale site for these flats?

Have you viewed them yet?

You need to find out the lease length.

Flats in a down market area will often be let out to DSS/LHA tenants.
Often drug and alcohol addicts and criminals being released from prison.
Working tenants will not want to live there.

The LLs are either social LLs or experienced private LLs, who operate on yield, rather than capital appreciation.

Alternatively, they are let out illegally to immigrants who overcrowd the property.

There are flats near me like this, for 40k.
I could buy them outright with cash, but I wouldn't, because it's a full time job for those who know what they are doing.

Before you do anything else, at least view the flats and knock on a few doors.
Get a feel for the place...

Cautious_Optimist

bigmaz wrote: »

You seriously telling me it will drop in value after 10 years from £30k?

Yes. It could do.
Especially if that 10 year period reduces the lease period below a certain threshold, for mortgage lending.
(eg from 65 to 55 years remaining).

bigmaz

Cautious_Optimist wrote: »

Can you post a link to the sale site for these flats?

Have you viewed them yet?

You need to find out the lease length.

Flats in a down market area will often be let out to DSS/LHA tenants.
Often drug and alcohol addicts and criminals being released from prison.
Working tenants will not want to live there.

The LLs are either social LLs or experienced private LLs, who operate on yield, rather than capital appreciation.

Alternatively, they are let out illegally to immigrants who overcrowd the property.

There are flats near me like this, for 40k.
I could buy them outright with cash, but I wouldn't, because it's a full time job for those who know what they are doing.

Before you do anything else, at least view the flats and knock on a few doors.
Get a feel for the place...

Absolutely, thats something I would do anyway. Its very early stages, as in, I have only just thought about it. So lots of homework still to do. I appreciate the kind of tennants it will attract, but hey, if thats where I have to start, I am more than happy to take the challenge. Its either that or do nothing....

bigmaz

Cautious_Optimist wrote: »

Yes. It could do.
Especially if that 10 year period reduces the lease period below a certain threshold, for mortgage lending.
(eg from 65 to 55 years remaining).

As I said, everyone who buys property takes a risk, not just me with this one flat, lol....

Cautious_Optimist

bigmaz wrote: »

, if thats where I have to start, I am more than happy to take the challenge. Its either that or do nothing....

You seem to be assuming that the only way to buy your own house, is to first become a LL...?

Most people in the UK do not become LLs.
They save up a deposit and get a residential mortgage on a home they want to live in.

You seem to be living a bit beyond your means at the moment.

Cautious_Optimist

bigmaz wrote: »

As I said, everyone who buys property takes a risk, not just me with this one flat, lol....

A 65 year lease reducing to a 55 year lease after 10 years, is a bit more than a "risk"...

bigmaz

Cautious_Optimist wrote: »

You seem to be assuming that the only way to buy your own house, is to first become a LL...?

Most people in the UK do not become LLs.
They save up a deposit and get a residential mortgage on a home they want to live in.

You seem to be living a bit beyond your means at the moment.

Where do you get that from? You are assuming an awful lot there..... I can perfectly afford my rent thank you. Please do not comment on things you do know nothing about.

And I am perfectly aware what people normally do, that is why I was asking to hear from anyone that has done this, not to get people to have a go at me because I am suggesting something out of the norm...... Not sure why you have such a problem with that?