good time to buy an "investment" property?

[Rob13]

My wife has seen a house which needs a fair bit of work in an area we would aspire to live in. We have family and friends who could do the majority of the work so that wouldn't be an issue. The house itself is up for £185k when a finished example is fetching more than £220k along the street.

This would stretch our budgets as we only bought our first house 4 years ago so won't have a lot of equity in it. Mortgage is affordable.

Are we likely to see house prices fall further?

Can someone enlighten me to the hidden costs of house moves other than what you would usually have as a first time buyer?

[Globulator]

Stamp duty
Legal fees
Moving costs
Changes in drive to work distance/traffic
School catchment
Council tax bands and areas

Renovation costs - allow £40k+, there is a reason the houses already done up cost more

[Phooey]

Rob13 said:

Are we likely to see house prices fall further?

Personally imho i would be more surprised if house prices were to rise over the next few years than fall further

[BoRED S2upid]

Depends what type of renovations the property requires? are we talking new electrics, central heating, windows, plastering, decoration etc.... or just light renovations?

For comparisons a friend of mine has just finished a 2 bed semi throughout including dampcourse, new boiler, new elecs, plastering, decoration throughout, carpets, bathroom and he didn't get much change out of £10k so a 4 bed house double that at least.

[was8v]

I'm no expert, but:


185k, spend 3 months and 15k doing it up (how much work does it need?)

Advertise for 220k, sell for 215k solicitors and agents fees means 210k back.

Pay capital gains tax on the 30k capital gain.

Don't forget you have to make £500(?) mortgage payments every month whilst you refurb and sell it. You may have an exit fee from the mortgage.




Is it worth badgering your mates to work for free? Don't forget that as an amateur doing these things always takes longer than you expect.

[Rob13]

Well this house would be a longer term investment therefore I dont need to do everything straight away. Would need a survey but it looks mainly cosmetic.

I think I'm mainly worried about the % of mortgage in comparison to our monthly joint income. It would be below 30% but obviously needing to invest money to improve the property would be required too, whereas the one we are in at present was decent before we moved in.

The next house is where she wants to start a family, so more added cost!

[Simpo Two]

There are two factors here. One is improving the property so that it's worth more, the other is house prices moving. If markets fall you will buy it for less but sell it for less, so I don't see that as a factor unless you sit on it until markets increase.