Rent out or save then buy outright?

Farcasting

Hey everyone, so pretty much im in the processing of sorting myself out and clearing my debt. atm i have a salary of about £24500 + Overtime

i owe about 11k which i will be paying off in full in about 6 months.

after im debt free i want to actually do something with my money rather than just waste it every month. i've been working for 5 years since i was 17 and dont really have anything to show for it.

anyways im 22 and I'm quite fortunate i live 2 mins walk away from work and i live at home with my mam dad and brother. i dont pay any board as i do all the cooking and cleaning for everyone.

i thinking about saving up a deposit for a house. im just wondering what other people have done or what they would have done being in my position.

should i save like £15000 and then get a mortgage on a house or would it be better to just save for like 4 years and buy a house outright?

i kinda want something to save for so i dont fall back into the trap or going out every weekend and then gambling during the week.

hope this makes sense

needhouseadvice

Farcasting wrote: »

Hey everyone, so pretty much im in the processing of sorting myself out and clearing my debt. atm i have a salary of about £24500 + Overtime

i owe about 11k which i will be paying off in full in about 6 months.

after im debt free i want to actually do something with my money rather than just waste it every month. i've been working for 5 years since i was 17 and dont really have anything to show for it.

anyways im 22 and I'm quite fortunate i live 2 mins walk away from work and i live at home with my mam dad and brother. i dont pay any board as i do all the cooking and cleaning for everyone.

i thinking about saving up a deposit for a house. im just wondering what other people have done or what they would have done being in my position.

should i save like £15000 and then get a mortgage on a house or would it be better to just save for like 4 years and buy a house outright?

i kinda want something to save for so i dont fall back into the trap or going out every weekend and then gambling during the week.

hope this makes sense

Wow, you can buy a house outright in 4 year? I'm so jealous! If it only takes such a short amount of time, I'd save and buy in a few years. You're only 22! You might as well enjoy a few years of living rent free without any responsibilities at home.

Farcasting

needhouseadvice wrote: »

Wow, you can buy a house outright in 4 year? I'm so jealous! If it only takes such a short amount of time, I'd save and buy in a few years. You're only 22! You might as well enjoy a few years of living rent free without any responsibilities at home.

Yeah I live in the north east houses are quite cheap up here a 3 bedroom semi detached in a decent area range between £100k -£110k.


with living at home my bills are literally nothing and I don't really go out much anymore as drinking usually ends up with me in the casino throwing my money away.
so I can save about £2k a month comfortably

Pixie5740

You must be doing a lot of overtime if you can comfortably afford to save £2k a month with an income of £24,500.

You're 22, there's no need to live like a hermit. Fair enough you don't want to go out drinking anymore and you certainly want to avoid the casino but find something you enjoy doing. I wouldn't worry too much about whether to buy outright or with a mortgage at the moment. Just get into good financial habits and saving. Find the balance between enjoying your youth and being sensible with money. Then in a couple of years decide what you want to do.

always_sunny

Farcasting wrote: »

Hey everyone, so pretty much im in the processing of sorting myself out and clearing my debt. atm i have a salary of about £24500 + Overtime

i owe about 11k which i will be paying off in full in about 6 months.

after im debt free i want to actually do something with my money rather than just waste it every month. i've been working for 5 years since i was 17 and dont really have anything to show for it.

anyways im 22 and I'm quite fortunate i live 2 mins walk away from work and i live at home with my mam dad and brother. i dont pay any board as i do all the cooking and cleaning for everyone.

i thinking about saving up a deposit for a house. im just wondering what other people have done or what they would have done being in my position.

should i save like £15000 and then get a mortgage on a house or would it be better to just save for like 4 years and buy a house outright?

i kinda want something to save for so i dont fall back into the trap or going out every weekend and then gambling during the week.

hope this makes sense

It doesn't... I am puzzled. If net, £24.5k/12=£2041, so basically you'd live off overtime? If gross, must be hell of a overtime!

If you're on a secured income that is eligible for a mortgage, interest rates are so low that makes more sense. You'd be mortgage free in your early 40's.
You can always extinguish the mortgage quicker if you have the spare dough.

You mention gambling and owe £11k, I hope these two are not related and if they are best first of all to get into a saving discipline!

tlc678910

If you are happy living at home then once you have paid your debt off start saving for your own place. As long as you remain happy at home keep saving. When you start to feel like you can't wait to get into your own place you will be ready to start looking. Living alone is expensive so the more deposit you have to reduce your mortgage the better.

I agree that at your age it shouldn't all be about saving. Were you into any sports in the past? How about joining a club for cycling, climbing or something else that is social without excessive focus on drinking.

Tlc

micky2phones

Hi, With me i moved out at 16, moved to new area for workand starting to buy my house at 19.

So while everyone i knew was buying cars and out night clubbing, i was repairing and updating my house.

Now you to are young so would you miss going out with your friends etc ?

Farcasting

tlc678910 wrote: »

If you are happy living at home then once you have paid your debt off start saving for your own place. As long as you remain happy at home keep saving. When you start to feel like you can't wait to get into your own place you will be ready to start looking. Living alone is expensive so the more deposit you have to reduce your mortgage the better.

I agree that at your age it shouldn't all be about saving. Were you into any sports in the past? How about joining a club for cycling, climbing or something else that is social without excessive focus on drinking.

Tlc

I play golf and im a member of a golf club. but pretty much going for a round of golf ends up drinking in the golf club and then going into town.


im weird tho as soon as I have a few pints I just want to go out and get on it and don't really care about how much I spend so I'd rather just stay away haha

Farcasting

micky2phones wrote: »

Hi, With me i moved out at 16, moved to new area for workand starting to buy my house at 19.

So while everyone i knew was buying cars and out night clubbing, i was repairing and updating my house.

Now you to are young so would you miss going out with your friends etc ?

I don't really go out that much anyways, I play a lot of computer games and I work 8-8 Monday to Friday and 8-4 Saturday. so I don't really have time to do anything on Sunday im that nackered I just chill out catch up on the TV and watch football

anotheruser

Here's some things to think about:

A Girlfriend/Boyfriend?
The question is, if you live with your parents, that may put a potential partner off. If you live on your own, the partner won't feel like it's their home - no matter how much they change it. But then it'll show your stability.

I would save save save for a couple of years and see what happens.
Start looking at houses now. Look at streets or areas you'd like to live in; look at what houses are on offer.

Project what you'd save to get a good idea of what you could afford. Perhaps do an online checker with any old bank as a guide.

Remember to save about £2500 in fees (Solicitors, extra searches, removals) - DON'T think you can save £500 as you'd be moving yourself. Just reserve the £2500 to cover all bases - if there's any extra after you've moved, great.

Also reserve about £3000 for new things like sofas, TV, fridge/freezer, washing machine, occasional tables... Unless you want more expensive gadgets - again look online at prices as if you were buying today and round the value up to the nearest £500. Again, don't think you can save money by buying 2nd hand. If you only spent £2000 on new things, that leaves you with an extra £1k that could help cover other areas you didn't think of.

Are you going to get a pet? You'll have to factor in costs for this too.

Are you going to redecorate straight away? If so, think about costs for this too. If not, you'll have to think about the house you'd buy and if is livable.

Finally, remember you'll be responsible for all bills. Monthly, here's a quick guide (ex-mortgage):

£120 - Council Tax
£20 - Water
£100 - Electric/Gas
£50 - BB/TV
£100 - Food
£50 - Other things (like toilet bleach, oven gloves, tea towels)
£50 - Clothes

Yes, all of these are subjective but it's good to round up to what it could be regularly. Some things, like tea towels, you'll only buy once a year maybe. But the next month, it might be oven gloves, a new serving spoon or set of knives, the latest video game, bulbs... there's always something.

Also didn't factor in any sort of travel (Car, bus, train) or holidays. Something else to remember.

Think about any subscriptions you already have (like magazines or clubs, gyms).

When you have all these figures (it sounds complicated, but should take you less than an hour to work it all out), then you can see how long you will need to save for to be able to buy.

Lastly, remember to keep this thread updated

Farcasting

Pixie5740 wrote: »

You must be doing a lot of overtime if you can comfortably afford to save £2k a month with an income of £24,500.

You're 22, there's no need to live like a hermit. Fair enough you don't want to go out drinking anymore and you certainly want to avoid the casino but find something you enjoy doing. I wouldn't worry too much about whether to buy outright or with a mortgage at the moment. Just get into good financial habits and saving. Find the balance between enjoying your youth and being sensible with money. Then in a couple of years decide what you want to do.

my normal week is 37.5 hours I work 68 hours a week usually
8-8 Monday to Friday 8-4 on a Saturday so I get about £2500 a month after tax.


my outgoings are literally nothing I rarely spend money as I go to work then go home, no cost involved I take food to work