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    • WestMid Mum
    • By WestMid Mum 2nd Oct 17, 8:53 PM
    • 1Posts
    • 0Thanks
    WestMid Mum
    To Buy or To Bank, thoughts please!
    • #1
    • 2nd Oct 17, 8:53 PM
    To Buy or To Bank, thoughts please! 2nd Oct 17 at 8:53 PM
    Hello all. I would please like some thoughts/comments/suggestions on my current situation.

    So I am a single mum working part time on supermarket wages. I am renting a house for 750 per month but I am also lucky enough to have funds to start looking to buy a house outright. I would love to stay where we are because of the school but unfortunately, houses in my price range rarely come up and when they do, they don't even get to the open house stage they get snapped up that quickly!

    This made me think about buying in the cheaper part of town and renting out the property. The rent from there wouldn't completely cover my rent but at least I wouldn't be shaving off 750 a month from my "house" money.

    At the moment, the money is sitting in the bank not doing very much and I know I need to at least talk to an adviser to see what my options are. I am not very financially literate though and I did find this site trying to read about investing. At the very least, I want a return that will cover my rent.

    So I guess I'm asking for thoughts and opinions on whether my 180,000 would be better off in bricks and mortar or entrusted to some suit to make me enough to cover my rent for now and maybe buy me more bricks and mortar in the future. Also wondering if I should post this in the Savings and Investment thread... Thank you for reading.
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    • Tiners
    • By Tiners 3rd Oct 17, 6:46 AM
    • 223 Posts
    • 223 Thanks
    • #2
    • 3rd Oct 17, 6:46 AM
    • #2
    • 3rd Oct 17, 6:46 AM
    Isn't taking on a small mortgage (of maybe around 30k?) to up your budget an option?
    Wouldn't that then give you enough to buy in your preferred area?

    When I first bought I easily managed a 30k mortgage on a single, part time, unskilled wage and that was when interest rates were >5%

    Seems far more straight forward and less hassle than the whole being a landlord whist renting option.
    • Lioness Twinkletoes
    • By Lioness Twinkletoes 3rd Oct 17, 6:57 AM
    • 1,299 Posts
    • 4,633 Thanks
    Lioness Twinkletoes
    • #3
    • 3rd Oct 17, 6:57 AM
    • #3
    • 3rd Oct 17, 6:57 AM
    Being a landlord is not an easy option. There are rules and regulations you have to abide by, such as ensuring the gas service and electrical surveys are done every year, that the tenant's deposit is secured. Notices have to be served in an appropriate way. You will be responsible for all repairs to the property - and they need to be carried out in a timely manner.

    Also, how would you cope, both financially and emotionally if you get a tenant that doesn't pay the rent? Court action costs a lot of money and takes time. Realistically, you could be 6 months without a rental income and end up spending thousands on courts and bailiffs with no realistic prospect of getting it back.

    How will you cope if your tenant trashes the place? I've seen situations where landlords have spent thousands in redecoration and repair.

    You'll need to check whether you need to pay tax on your earnings - in short, being a landlord is not for everyone and it's not easy or a quick way to make money. You could find yourself out of pocket. If you aren't financially savvy you might struggle even harder.

    Buy something to live in - with or without a small mortgage. You'll just have to cut your cloth accordingly.
    • agrinnall
    • By agrinnall 3rd Oct 17, 8:59 AM
    • 20,345 Posts
    • 16,121 Thanks
    • #4
    • 3rd Oct 17, 8:59 AM
    • #4
    • 3rd Oct 17, 8:59 AM
    I agree with Tiners, if you're currently able to pay out 750 a month in rent then surely you can afford to pay a lower amount on a mortgage so that your budget is more in line with house prices in your chosen area?
    • Rambosmum
    • By Rambosmum 3rd Oct 17, 9:27 AM
    • 1,725 Posts
    • 2,240 Thanks
    • #5
    • 3rd Oct 17, 9:27 AM
    • #5
    • 3rd Oct 17, 9:27 AM
    I'd do two things:

    1. talk to local agents, give proof of funds and ask them to contact you with any houses in your price range. They'll like a cash buyer and may have a seller willing to forego the open market for a quick sale.

    2. Consider a mortgage. What would a small mortgage cost? How much of a mortgage would you need to buy in your preferred area?

    Being a landlord isn't easy, the money isn't guaranteed and the stress can be high.
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