Hypotehtical Question - £250,000. Home or Home plus Rental

[AdviceHunter]

Supposing you lived in rented accommodation and came into money; £250,000, which approach would you take and why? Assume a young couple with no kids, perhaps looking to grow the family in the coming years. Note: Proposed house prices are realistic for the area the couple live in.

Option 1) Purchase a generous three bedroom detached house with a reasonable garden in a sought after village for £250,000. The intention would be that this would be the family home for the medium to long term. No mortgage required.

Option 2) Purchase a smaller three bedroom semi-detached house with a small garden in a small pleasant town for £150,000. The intention would be that this would be the family home for the short to medium term. With remaining £100,000 purchase a small house / flat with the intention of renting this out long-term so that some of the capital is 'working'. No mortgages required.

Disclaimer - I haven't stumbled upon a quarter of a million, just trying to align my thinking to what makes sense in the housing market.

[BoRED S2upid]

If kids are imminent then option 1 bigger house bigger garden for the kids as they take up a lot of space! Both are mortgage free which is a huge bonus.

[Simpo Two]

I'd buy a £200K house and invest £50K wisely in the markets.

That way you get a better house than Plan A and less aggro than Plan B.

[K50 DEL]

If I emerge victorious from my current court case then this is almost exactly the situation I will find myself in....

My current thinking is to stay living where I am and use the £250k to buy, renovate and flip properties until I can buy a place I'm happy with outright, without touching the original funds.....Given some of the clowns you see making money on homes under the hammer, if they can do it then I'm sure I can!!

[Black_S3]

If one salary could service both mortgages if needed I'd go with something like A mortgaged approx 50k and B on an interest only btl mortgage (that can be overpaid) of 65kish with 15k left over for stamp duty/fees & emergency fund.

IMO it's not a good idea being mortgage free unless you're already in your forever home.

[dazwalsh]

K50 DEL said:

If I emerge victorious from my current court case then this is almost exactly the situation I will find myself in....

My current thinking is to stay living where I am and use the £250k to buy, renovate and flip properties until I can buy a place I'm happy with outright, without touching the original funds.....Given some of the clowns you see making money on homes under the hammer, if they can do it then I'm sure I can!!

Be wary of following what's been done on that show, they conveniently leave out all the legal costs and buying /selling fees to get to their profit figure, and it's not as easy as it appears, it's a real stressful ball buster way to make money.

3 days in to removing fking weapons grade Woodchip from every wall in the place and you will regret it

[K50 DEL]

dazwalsh said:

K50 DEL said:

If I emerge victorious from my current court case then this is almost exactly the situation I will find myself in....

My current thinking is to stay living where I am and use the £250k to buy, renovate and flip properties until I can buy a place I'm happy with outright, without touching the original funds.....Given some of the clowns you see making money on homes under the hammer, if they can do it then I'm sure I can!!

Be wary of following what's been done on that show, they conveniently leave out all the legal costs and buying /selling fees to get to their profit figure, and it's not as easy as it appears, it's a real stressful ball buster way to make money.

3 days in to removing fking weapons grade Woodchip from every wall in the place and you will regret it

Yep, I'm pretty aware of the ways they twist things on the show, and I've already done one renovation of my own and been involved with a couple more so I'd be going in with eyes wide open... fact remains though if you buy right you can make reasonable money.

[rich350z]

Option 3, a lovely £350k house with £250k deposit £100k mortgage?

[48Valves]

Buy the best detached house in the nicest location your money will get you.

[superlightr]

48Valves said:

Buy the best detached house in the nicest location your money will get you.

agreed.

would also add - don't buy a house with a shared driveway or shared anything,

[48Valves]

superlightr said:

48Valves said:

Buy the best detached house in the nicest location your money will get you.

agreed.

would also add - don't buy a house with a shared driveway or shared anything,

I would also agree with that

[Jaguar steve]

48Valves said:

superlightr said:

48Valves said:

Buy the best detached house in the nicest location your money will get you.

agreed.

would also add - don't buy a house with a shared driveway or shared anything,

I would also agree with that

I would too. We had the option of buying a rental outright when we downsized JS Towers a few years ago.

I've been refereeing between landlords and tenants before and know it rarely goes well because there are always deep conflicting interests bubbling away under the surface and it'll get a lot worse if either side kicks off litigation or starts generally behaving like a Cock.

Can't be arsed with any of that.