Short term property solution
Discussion
I need to get out of my current flat. My new place will not be finished until May '07, about 6 months later than my worst case scenario date. Do I rent in the short term (not ideal), or buy for a year and sell once it is time to pay for the new place?
Any advice appreciated! Cheers
edited for typo
>> Edited by miniandy on Thursday 5th January 13:15
Any advice appreciated! Cheers
edited for typo
>> Edited by miniandy on Thursday 5th January 13:15
egomeister said:
Surely a 6mth/1year rent would be cheaper and easier than buying and paying stamp duty/fees/surveys etc if you are only planning on keeping the property short term?
bloody hell for just one year the transaction costs would be brutal. What level of stamp duty would you pay? Plus the suverys and legal fees. Unless prices are rocketing where you live?
Too many unknowns to be able to give good advice.
Renting is not always throwing money away - if you need to raise a mortgage to buy a temporary place then you'll be paying interest on that - can you rent for a similar amount of money?
You have to pay that nice Mr Brown Stamp Duty on your new purchase you then have to pay the nice Estate Agent commission to flog it for you. Plus solicitors fees at either end of it.
What's the market like in your area?? The forecasts are for the market to stay fairly flat with perhaps a percent or two increase this year - if you're paying out interest on a mortgage and the property isn't increasing in value I'm not sure that there's a benefit in buying.
Plus of course if you buy and the central heating goes kaput next week etc. etc. you'll have to sort it - if you rent it's the landlord's problem.
Renting is not always throwing money away - if you need to raise a mortgage to buy a temporary place then you'll be paying interest on that - can you rent for a similar amount of money?
You have to pay that nice Mr Brown Stamp Duty on your new purchase you then have to pay the nice Estate Agent commission to flog it for you. Plus solicitors fees at either end of it.
What's the market like in your area?? The forecasts are for the market to stay fairly flat with perhaps a percent or two increase this year - if you're paying out interest on a mortgage and the property isn't increasing in value I'm not sure that there's a benefit in buying.
Plus of course if you buy and the central heating goes kaput next week etc. etc. you'll have to sort it - if you rent it's the landlord's problem.
minicity said:
Don't forget all the time and hassle of buying and selling.
In the scenario you describe, this would be my biggest worry - i.e. not being able to liquidate your cash in a hurry when the new pad finally becomes available (plus posibly handing over large amounts of cash to Gordie)
Thanks for the advice.
At the moment, renting seems the best bet, however I would be nervous about loosing money or not having enough for the new place when it is built. My concern with renting is that I don't have anything to show for the outlay over the last year. I think that if I were to buy again, I would at least have a house to sell, but I suppose even this has it's problems if the market were to dive or I was unable to recoup my money quick enough. Oh I don't know!
At the moment, renting seems the best bet, however I would be nervous about loosing money or not having enough for the new place when it is built. My concern with renting is that I don't have anything to show for the outlay over the last year. I think that if I were to buy again, I would at least have a house to sell, but I suppose even this has it's problems if the market were to dive or I was unable to recoup my money quick enough. Oh I don't know!
miniandy said:
My concern with renting is that I don't have anything to show for the outlay over the last year.
Other than not having to sleep in your car for a year!!!! it does make me laugh when people say renting is throwing money away.... you do actually get somthing for the money...
Cheers
Graham ( who lives in a mortgaged house
)miniandy said:
Thanks for the advice.
At the moment, renting seems the best bet, however I would be nervous about loosing money or not having enough for the new place when it is built. My concern with renting is that I don't have anything to show for the outlay over the last year. I think that if I were to buy again, I would at least have a house to sell, but I suppose even this has it's problems if the market were to dive or I was unable to recoup my money quick enough. Oh I don't know!
I presume that having sold house A. you will then have a large lump of cash in the bank for a year before you buy house B.
If you put that on deposit, say at 5% then your interest income will offset what you pay in rent. Effectively meaning that you can rent for free. Without the liquidity risk associated with buying another house/flat that you only want for one year which IMO would be crazy.
pdV6 said:
Don't forget all the time and hassle of buying and selling.
Another option would be to buy (and maybe sell) at Auction. Brown increased the threshold for Stamp Duty free property to £120k... Buy something under 120k at auction in your area... spend a little doing it up so that when your new place is ready, you can either sell quickly or rent out for additional income.
miniandy said:
Thanks for the advice.
At the moment, renting seems the best bet, however I would be nervous about loosing money or not having enough for the new place when it is built. My concern with renting is that I don't have anything to show for the outlay over the last year. I think that if I were to buy again, I would at least have a house to sell, but I suppose even this has it's problems if the market were to dive or I was unable to recoup my money quick enough. Oh I don't know!
you could take a punt on house prices via IG Index, though i think they only do Greater London(?) -which may not provide a good hedge in your neck of the woods!
mybrainhurts said:
Any caves nearby...?
Unfortunately not!
However here is another question for you all - the missives have been signed on my new place, but say I changed my mind due to the completion date having moved back another 6 months, how likely is it that I will be able to get out? Secondly, could I sell it back to the developer?
Cheers
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