Buying house but may not stay in the area

Discussion in 'General Property Investment Discussion' started by steveburns, Sep 25, 2018.

  1. steveburns

    steveburns New Member

    I am thinking of buying a house in the area where I currently work. I have a 4 year contract and have enough money for the house deposit whilst keeping a considerable amount in my savings. Unfortunately I am not sure wether it is a good idea as I may quit the job within the next year and may leave the area. I have already delayed buying a house for a year due to being unsure about the job and now just want to buy somewhere to get on the ladder. If I left the job I would be likely to move to London where I would not be able to afford a house anyway and therefore I want to do something with my savings.

    I would only want to buy the house in this area if I can rent the rooms out to lodgers. Whilst I live in it this would be easy, however If I left I am not sure what would happen with the mortgage if I left and continued to rent the rooms out (apart from my own). If I left my job it would be in the next year, and my plan would be to keep one of the rooms as mine and rent the other two out on Spareroom. I would then use the house on the odd weekend as I would still have my room.

    My question is, would I still be able to count the people renting the rooms as lodgers rather than tenants if I am not at the house much? I would not be buying elsewhere and would look to turn the mortgage to buy to let as soon as possible, as in a few of years I would hopefully have enough to buy somewhere else. I heard you need to wait a couple of years before turning it into buy to let if you left the area. The house is in a very good location and a place thats easy to rent (centre of a major UK city). It is worth currently around 130k so it is not a huge risk as an investment even if I did leave and need to sell it in a few years and has 3 rooms so I would rent out 2 (each for £350 including bills).
     
  2. diyhelp

    diyhelp Active Member

    There are a number of questions you need to ask yourself:-

    - Would any "lodger" pay rent without some kind of agreement - I dont think so
    - How would you manage the property if you moved? Letting agents - then there are fees to consider
    - How would you fund your accommodation if you moved to a different area for your job?
    - I am pretty certain you would need to tell your mortgage company if you took in tenants - but worth checking out

    Until your own career/working path is clearer I would be inclined to hold back. Also, with Brexit I dont think we are likely to see a boom over the next year - if you life path becomes clearer within this period - so house prices are not likely to be significantly higher.
     
  3. steveburns

    steveburns New Member

    The only issue is I have not bought a house in any area because of having to move around for jobs. I finally have this job with a 4 year contract, and there is a chance I will stay the whole time, but i am just not sure at the moment. I want to invest my money somewhere and since the area I am in is low risk due to general low prices of houses I thought it won't be a big risk.

    However your point about Brexit makes sense. I would try and manage it remotely and when I am there fore the odd weekend.
     
  4. Adam Chapman

    Adam Chapman New Member

    I'd agree with DIY help - until you have a clearer picture of the career path before making a cement decision. Brexit is likely to make the road rockier, in nothing else but uncertainty.
     
  5. nmb

    nmb Well-Known Member

    While your £130k should be relatively secure looking to the longer term, the short term might be a little rocky. Personally I would hold off until you know what you are doing - you may also find that Brexit concerns might knock a few extra pounds off the value of property in the short term. Do you really want the hassle of managing a buy to let property from potentially hundreds of miles away?
     
  6. Longterminvestor

    Longterminvestor Administrator

    You might need to check your mortgage to see any conditions about lodgers/tenants. Certainly an interesting subject and one which more and more people will be encountering as the employment market does go more "mobile".
     
  7. michael1978

    michael1978 Member

    I agree also, if you are aware of the fact that you should be at the house than maybe it's wise to wait and see where your next job will take you.
     
  8. Longterminvestor

    Longterminvestor Administrator

    I think the government will look to tighten the regulations for private rental and bring in more tax. Thats all it seems to be about these days, not necessarily improving the lives of tenants or landlords but just money money money!
     
  9. ibuyhousesfast

    ibuyhousesfast New Member

    That could be a great move for a short-time as you have already planning to sell a property in the coming years. So, making some bucks by renting it out definitely a go...
     
  10. diyhelp

    diyhelp Active Member

    Just wondering how you got on with this one? This is probably a scenario that many people will be faced with in years to come.
     
  11. Farm201

    Farm201 New Member

    if you are aware of the fact that you should be at the house than maybe it is wise to wait and see where your next job will take you. What would happen if you sell now and in a few months your work is very close to the area, wait a prudent time would be fine
     
  12. Karen R

    Karen R New Member

    If you are already renting now why not just continue renting as you are but buy a property in the area and let it? if you buy it from day one as a buy to let and let it out you are on the property ladder and if you have a hefty deposit you are also potentially generating a monthly income for yourself over and above the costs for fees for a managing agent and repairs etc which will be in place over and above the mortgage repayments (which will be covered by rental income), you council tax and bills will be payable by the tenant and you can insure against non payment of rent to ensure your mortgage payments will be covered irrelevant and then should you decide to move you already have an up and running buy to let that you can potentially remortgage or sell should you need to move and release funds in the future when you eventually decide to buy a main residence.
     
  13. FWL

    FWL Member

    There is always the option of selling the property when your current employment contract comes to a close or you may well decide to retain it and rent it out. Interest rates at the moment are extremely low as are mortgage rates and there are some very attractive fixed rates.
     
  14. steveburns

    steveburns New Member

    Only just saw these recent replies. I decided against buying the property at the time, although it was more that I didn't make a decision and the property went. I am still in the job but again could leave at any point. I think buying makes sense as I am still here and could have been living in my own house by now! The property I will buy is in an area that will go up in value (centre of big city).
     
  15. steveburns

    steveburns New Member

    Regardless with what happens I will post with a follow up of how things have been, hopefully that will help people in a similar situation to me. Its very frustrating having the money to buy a property but having indecision with work! Renting all this time feels like a waste and it has not been comfortable at all.
     
  16. steveburns

    steveburns New Member

    The property I intend to buy is a bungalow but it is right in the city centre and will be easy to rent out if I leave.
     
  17. Longterminvestor

    Longterminvestor Administrator

    @steveburns Dont let the money burn a hole in your pocket - Brexit will dampen house prices in the short term and cash is always king. There could be some great bargains out there.
     
  18. ritabos

    ritabos New Member

    it will be beneficial for you to take advice from a real estate agent who is having a better knowledge of the things area, market price, and all so that you will get proper knowledge of the situation you are asking for
     
  19. Longterminvestor

    Longterminvestor Administrator

    Many inner city property markets seem to be benefiting from the partial flow of property funds from London into the regional markets. Places like Manchester, Liverpool, Birmingham and Leeds have done particularly well and seem to thriving at the moment.
     
  20. Longterminvestor

    Longterminvestor Administrator

    While there is still some uncertainty about a Brexit deal in the short term there are some very attractive properties out there offering relatively high rental yields. Might be worth taking a look and trying to cherry pick the best on offer?
     
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