Better to buy a doer upper under budget or a house already done at max budget?

Dontpanic86

Hi there,

Just after some advice regarding house buying. My partner and I are FTB , we have about £60K for a deposit and can get about £230K mortgage. We were originally looking for a doer upper as my Dad is a builder (albeit he's 77, but still working) so he could help with the consultancy, getting materials and smaller jobs etc. And we've got money on top of the 60k deposit for renovation. However, now i'm thinking is it better financially to get a house that's done and pay more for the house and higher monthly costs etc and we could sublet straight away and don't have hassle of work etc. and the money we could have spent on renovation we can overpay on the mortgage each month whilst continuing to invest it (stocks and shares ISA) so hopefully grow it that way. 

I'm just a bit concerned about putting most of my savings into a property and then the cash isn't tangible. I know buying isn't really a great financial decision but we'd like to move to have autonomy over the space and bigger garden etc. But just wondering out of the two options, what  is best financially. I'm not expecting any inheritance so I want to make sure I can still save for my future after house buying...

Many thanks! 

MikeJXE

I have done both in my time as an ex builder and get more for you money if you do it yourself

If your dad is a builder and has contacts in the trade, materials and labour at mates rates thats the way I would go.

However it’s a long time since I did that and I know materials have sky rocketed 

dannim12345

It also depends what you want to do, adding a loft extension might be more than buying a house with an extra room already.  Your dad is probably a great person to give you an estimate of the cost the works you would want to carry out. 

If you have the skills (or your dad does), I think it’s cheaper to do yourself and you get everything to your taste.  

jonnydeppiwish!

What are you subletting?

dinosaur66

i would never have a lodger

but thats only me ,my mother told me she had 2 lodgers in the 60s and it was common and was fine

your dad is ideal man to ask for advice with what house to buy and any house you like bring him with you on your second viewing /he will see everything and tell you about money pits to avoid

old saying worst house in the best street from a money increase in value perspective

my advice / if you have a place to live and do not have to move in for say 4 months / buy the doer upper -

 do not buy a strip out as a first house /ie a house you have to take back to bare bones.

as to finance

depends where in the country you are but at 300k in 90% of the country you should expect that property you buy will be worth 600k in 20 years time

do not buy anything leasehold and if you chose to buy something all finished do not buy a brand new build -this is only my opinion of new builds i do not trust current state of there finishes .

imo they have premiums built in and are overpriced / 6 years and over and all the snags have /should have been found.

 

FreeBear

dinosaur66 said:  do not buy a strip out as a first house /ie a house you have to take back to bare bones.

And do not underestimate the length of time or the costs involved in doing up a renovation project.

I'm moving in to year 10 with my little pile, and ran out of money a long time ago.

Oh, and avoid anything a flipper has had their grubby little mitts on. Chances are, you will have to redo everything because of the bodges hidden under the fresh coat paint.

thegreenone

I know buying isn't really a great financial decision 

Erm...... since when? 

I think most people on here would recommend buying over renting, me included.  You can always downsize later in life.

Dontpanic86

Once interest rates/ maintenance / fees / furniture etc etc are taken into account then it isn't really much of an 'investment' but I think the emotional aspect outweighs that. Check out ramit sethi and diary of a CEO on youtube re. house buying. We've got a good rental deal and the landlord does everything, we don't deal with any house things and he's fairly efficient to replace and fix but I think we are lucky in that respect! But not being able to paint or have own furniture is becoming a bit annoying

FreeBear

thegreenone said:

I know buying isn't really a great financial decision 

Erm...... since when? 

I think most people on here would recommend buying over renting, me included.  You can always downsize later in life.

Once the final mortgage payment has been made, only ongoing maintenance costs need to be covered. If you are renting, that is an ongoing expense that needs to be covered until the day you die.

Cloysterpete

Dontpanic86 said:

Once interest rates/ maintenance / fees / furniture etc etc are taken into account then it isn't really much of an 'investment' but I think the emotional aspect outweighs that. Check out ramit sethi and diary of a CEO on youtube re. house buying. We've got a good rental deal and the landlord does everything, we don't deal with any house things and he's fairly efficient to replace and fix but I think we are lucky in that respect! But not being able to paint or have own furniture is becoming a bit annoying

Renting works well for some, I would find it very stressful not knowing if my rent is going to be hiked again next year, although I guess you would also have that concern with mortgage rates. I was fortunate enough to move straight from my parents into my own place, mortgage free, I’d still be living at home with my folks if I had to rent I’ve never seen that as good value for money. 

GDB2222

I think people generally underestimate the cost of doing up down at heel houses, and so they tend to overpay. 

If your dad is prepared to work for nothing doing the work for you, that obviously helps. But he could work for other people on a paid basis, and give you the money, so don’t overestimate that benefit.