First time buyer of property from grandparents

jimbog

Ba aware that the ceiling price of the street is £90K.

If, by any which means, you buy it for £60K (you would obviously not want to pay them less than its market value) then take off the fees etc and renovation costs (sounds much more than £10K) - any 'profit' from those many months of hard graft (and stress) you might make more money working at McDonalds. TV programmes like Homes Under the Hammer conveniently forget to take into account time/labour.

Help your grandparents to sell it through an estate agent or if it is in dire condition through an auction

[Deleted User]

If your grandparents are so desperate to get rid of it then let them sell it at market value, then if they wish they can gift you the amount difference that they would have sold it to you (e.g. if it sells for 60k, and they would have sold you it for 50k, then they give you 10k).

Saves faffing about with all this renovation nonsense which no offence but you don't really seem to understand how much time and money it will require.

You will also keep all of your first time buyer incentives for when you come to buy a property to live in later in life.

BoGoF

Another thing to bear in mind is your grandparents may incur a Capital Gains liability on the sale to you. This will be based on market value and not what they agree to sell it to you for.

But as others have said, this seems like a bad idea for several reasons.

fairy_lights

If you only earn 15k, how are you going to be able to pay your mortgage and rent on somewhere to live while you do it up?
If your savings are going to be used as the deposit, where will you get the money to do the house up?

davidmcn

fairy_lights wrote: »

If you only earn 15k, how are you going to be able to pay your mortgage and rent on somewhere to live while you do it up?

How are they even going to qualify for a mortgage in the first place? Standard residential mortgages are for properties you're going to live in, not refurbishment projects. I doubt development finance is readily available for those with no property of their own, no credit history, low income and no experience.

quantumlobster

ElliottW wrote: »

Hi all,

I’m 20 years old, I live in the East Midlands and I am looking to buy my first property (off of my grandparents). This is primarily for short term profit, I have no intention of living in the house, only to renovate and sell on.

My grandparents are desperate to get rid of the property as council taxes are soon to be rising for people who own more than one property...

Therefore, this seems like the perfect opportunity for me to make some money and get on the property ladder.

Now I must add that the house is in need of desperate repair and months of grafting, but I see the light at the end of the tunnel!

So, I ask for advice from people who are understanding of this particular subject or have experienced this themselves

E.g. what would be the best way to approach this situation being a first time buyer with no credit history?

I would appreciate any feedback on this,

Thanks

Here are the negatives to your idea:

1. You are going to struggle to obtain a mortgage of any kind
2. Even if you did, your salary is not going to give you much if any room to fund the renovations
3. You are going to burn all your FTB advantages
4. You or you grandparents or both could be looking at additional SDLT and CGT liabilities
5. £10K is a vanishingly small amount to spend on a property that requires renovation. A modern kitchen including removal of the old one, redecoration, and flooring will eat all of that, assuming all goes to plan and there aren't any gas/electrical/plumbing horrors

lincroft1710

If your grandparents are "desperate to get rid of the property" then they should either market it via a local estate agent at a realistic price or put it into an "old fashioned" auction with a low reserve. You are in no position to be able to buy and renovate this house.

ElliottW

I appreciate all responses and considering what you’ve all said, this seems like a downhill task right from the start so I’ll re think my situation and carry on from there!

I think naivety got ahead of me and I saw the light before the tunnel...

Once again, thanks all for teaching me a lesson in property :rotfl: