what to do??? property, buy for myself or buy to let????
Discussion
Hey there.
Basically i'm really unsure of what to do with some cash i have. i am only 20, but through saving hard all my life, generous grandparents and parents giving me what it cost to put my sis through uni, i have a nice lump saved (around 70k).
i am quite happy living at home atm, but have started looking for a house, based on a 40k deposit i could get a 105k mortage. @£500 a month over 25 years. i could just about afford to live on my own, on a wage of around 25k per year, but i wont be able to have the car (only a e36 328 or 200sx) and mountainbikes i want. ect
However i was thinking, should i buy a 1 bed flat to let, can pick a small flat up in a modern block for around , 65k with a rental income of around £425 a month. that's an income of 5100 before, tax and service charges ect and if the place was permanently occupied. so say i see 3k a year out of it, thats a 4.6% return. would you say that's worth it, for the hassle and responsibility of letting a place? with the property market as it is, i should imagen a should see a small return when/if i came to sell the flat.
can anyone impart any experience/thoughts?
Basically i'm really unsure of what to do with some cash i have. i am only 20, but through saving hard all my life, generous grandparents and parents giving me what it cost to put my sis through uni, i have a nice lump saved (around 70k).
i am quite happy living at home atm, but have started looking for a house, based on a 40k deposit i could get a 105k mortage. @£500 a month over 25 years. i could just about afford to live on my own, on a wage of around 25k per year, but i wont be able to have the car (only a e36 328 or 200sx) and mountainbikes i want. ect
However i was thinking, should i buy a 1 bed flat to let, can pick a small flat up in a modern block for around , 65k with a rental income of around £425 a month. that's an income of 5100 before, tax and service charges ect and if the place was permanently occupied. so say i see 3k a year out of it, thats a 4.6% return. would you say that's worth it, for the hassle and responsibility of letting a place? with the property market as it is, i should imagen a should see a small return when/if i came to sell the flat.
can anyone impart any experience/thoughts?
If you don't want to move out yet stick the money in a bond, let is earn you some cash and then think again in a few years.
If you buy something now and then decide to move out in a couple of years you'll want the money out of it for a deposit. By the time you'd paid selling fees, possible early redemption fees on the mortgage etc.. not to mention the hassle of selling it.
If you invest you earn a bit of cash but the money is still easily accessible.
If you buy something now and then decide to move out in a couple of years you'll want the money out of it for a deposit. By the time you'd paid selling fees, possible early redemption fees on the mortgage etc.. not to mention the hassle of selling it.
If you invest you earn a bit of cash but the money is still easily accessible.
Yeh, i see what you're saying.
If i stay at home for another two years, i recon, i could save 5k a year, plus the 10k i have left over, plus the potential 3k a year income on a flat. so in two years i'd have 26k, which would be enough for a deposit on my own 2/3 bed house with a garage i want. using the income off the flat to cover half of the mortgage.
thats just another way i've looked a it.
cheers.
If i stay at home for another two years, i recon, i could save 5k a year, plus the 10k i have left over, plus the potential 3k a year income on a flat. so in two years i'd have 26k, which would be enough for a deposit on my own 2/3 bed house with a garage i want. using the income off the flat to cover half of the mortgage.
thats just another way i've looked a it.
cheers.
Buy two! Rent them both out and if you want to move into one later you can while still retaining some income for the other.
I just don't see how there can be a better time to buy than now (well, maybe last week) but hurry before all the lenders put up their base rates!
I think you will look back at it in a few years as the best decision you have ever made......
I just don't see how there can be a better time to buy than now (well, maybe last week) but hurry before all the lenders put up their base rates!
I think you will look back at it in a few years as the best decision you have ever made......
wow hats off to you for being so sensible at your age, most would have gotten a 1 way ticket to vages and blown the lot on gambling,guns,drugs and hookers and not made it to there 21st birthday. now i am by no means an expert but here is an option.
use around 40k to buy a 1 bedroom flat in the local area, rent it out and ideally the rental charge will be more than your mortgage costs although would you have to go privately for this? as an agency will charge a fee per month for taking care of things for you
put 25k into premium bonds or a savings account. now its not 100% you will get anything with premium bonds but putting the max you can in leaves at a fairly good chance of atleast winning what you would make in interest, but ideally more. savings dont offer much at the moment but if its a 3-5 year one where you cant touch it an OK % of 25k may make it a worthwhile choice.
then 5k on something risky, shares,spread betting perhaps? yes its risky but you never know and you seem sensible enough not to get in a mess
stay at home until 25, aim to save 20k by then and sell your flat,cash in your savings/premium bonds and consider selling the shares if you havent already done so. who knows you may be looking at 100-110k in your back pocket depending how things go. you will then be able to buy your own place and be mortgage free by 50
use around 40k to buy a 1 bedroom flat in the local area, rent it out and ideally the rental charge will be more than your mortgage costs although would you have to go privately for this? as an agency will charge a fee per month for taking care of things for you
put 25k into premium bonds or a savings account. now its not 100% you will get anything with premium bonds but putting the max you can in leaves at a fairly good chance of atleast winning what you would make in interest, but ideally more. savings dont offer much at the moment but if its a 3-5 year one where you cant touch it an OK % of 25k may make it a worthwhile choice.
then 5k on something risky, shares,spread betting perhaps? yes its risky but you never know and you seem sensible enough not to get in a mess
stay at home until 25, aim to save 20k by then and sell your flat,cash in your savings/premium bonds and consider selling the shares if you havent already done so. who knows you may be looking at 100-110k in your back pocket depending how things go. you will then be able to buy your own place and be mortgage free by 50
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