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Is this house a good investment?
WhisperingGhost
Posts: 4,762 Forum Member
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I'm just looking for some advice. I have seen this property & am wondering if people think it would be a good investment opportunity. I'm a first time buyer, so I'm a complete novice to all this.
http://www.propertypal.com/93-deerpark-road-oldpark-belfast/228074#
It's in a residential area with most houses on sale at the moment going for between £75k - £140k (which makes me wonder why it's going for such a cheap amount).
I only earn £15,500 p.a but I have some savings so would only need a mortgage for £36k. I also work for the bank that I would get the mortgage through so I know I would be approved as they usually lend 2 1/2 times annual salary.
Also, I live at home so wouldn't want to live in this house - it would be mainly as an investment. Over the years I would want to build a front wall, do the garden up and also do some home improvements (save more & do a small loft conversion maybe).
The only thing is, the windows have been previously smashed several times by protestants in a neighboring estate (as this used to be a predominantly protestant street but now is more like 55% Catholic), and this is being done around the 12th July each year & as it is the end house (so easy access?) and because Catholics keep moving in.
The reason I'm confused is, about 6 years ago the house facing this one was selling for £50k and I regret never having gone for it as that one is now valued at around £70k-£75k and I don't want to miss another opportunity.
I'm single, have no dependents or major bills (am able to save £500 per month comfortably as I still live at home), and don't go out drinking at weekends anymore.
Would you go for it?
http://www.propertypal.com/93-deerpark-road-oldpark-belfast/228074#
It's in a residential area with most houses on sale at the moment going for between £75k - £140k (which makes me wonder why it's going for such a cheap amount).
I only earn £15,500 p.a but I have some savings so would only need a mortgage for £36k. I also work for the bank that I would get the mortgage through so I know I would be approved as they usually lend 2 1/2 times annual salary.
Also, I live at home so wouldn't want to live in this house - it would be mainly as an investment. Over the years I would want to build a front wall, do the garden up and also do some home improvements (save more & do a small loft conversion maybe).
The only thing is, the windows have been previously smashed several times by protestants in a neighboring estate (as this used to be a predominantly protestant street but now is more like 55% Catholic), and this is being done around the 12th July each year & as it is the end house (so easy access?) and because Catholics keep moving in.
The reason I'm confused is, about 6 years ago the house facing this one was selling for £50k and I regret never having gone for it as that one is now valued at around £70k-£75k and I don't want to miss another opportunity.
I'm single, have no dependents or major bills (am able to save £500 per month comfortably as I still live at home), and don't go out drinking at weekends anymore.
Would you go for it?
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Comments
You could sell it for a higher price once it has been done up, but it depends on the housing market in that area of course.
I'm not at all sure that your employer will be willing to approve a mortgage loan on a property which you don't intend to occupy, so I suggest that you clarify this before going any further.
"Sadly the dwelling has suffered minor vandalism and will require improvement works"
added to which you seem to indicate that vandalism in the area is common and you are not going to live in the house.
Ask yourself this. How much would you have to spend on it to get it back in liveable condition, and how long would it stay in that state ?
If they are available I would look at local police statistics for the area to see if there is any indication of ongoing trouble \ potential trouble
Oh really? Ahh, see I said I was a novice
Live in it, do it up and rent it out, do it up and sell it, but don't leave it empty for years.
Work out how much you'll pay to the bank in total during the loan period.
Work out how much you'll pay out for renovation, repairs, council tax, insurance etc. during that period.
Then try to guess what the house might sell for at the end of that period.
If the value is less than you paid (or not very significantly more) it's not an investment - it's a money sink.
Without saying too much, the house is very near my own & it is generally a very quiet area occupied by mostly elderly & young families. It's only this one house which has been hit by valdalism in recent years and only on or around 12th July (marching season). But you're right, I guess. Would there be any point in buying it to constantly have to fix broken windows?
How easy will it be to rent it given the risk of damage? Will a tenant want to stay after they've had windows smashed? How much will it cost to fix each time? (bearing in mind it may be difficult or not worthwhile insuring against)
Is there a risk of the damage being more serious next time?
Thanks. I was wondering why it was at such a low price in comparison to other houses in this street which are on sale at the minute. I guess I havn't put too much thought into the other necessities that you mentioned above. Maybe back to the drawing board and keep saving for another few years...
Obviously, I can't speak for your employer but if they are lending to a member of staff, I would expect them to be even more cautious than usual.
The fact that you intend to leave the property unoccupied is likely to be a negative factor, rather than a positive.
You really need to ask them.
I wasn't going to rent it I was just gonna do home improvements over a 5 year period and try to sell it at a profit. But another poster mentioned above that if the costs of the home improvements outweigh the increased value, then what's the point.
Apart from anything else, if it's already a target for vandalism then leaving it obviously unoccupied for 5 years isn't really going to help. And if there was scope for making a quick buck out of doing it up then you'd have competition from other property developers.
And people who actually know what they're doing/have done it before.
I think I'll just stick to saving - for what, I dont know.
Well a part from the boiler has been nicked.
Was the house occupied at the time? Vandals seem to be attracted to empty properties.
Why is the house only £45K? This needs to be established first. Maybe the others are over-valued, or maybe it has a problem. If that really is the price, then perhaps it can be negotiated even lower.
Keeping it empty for five years when house prices are likely to be stagnant, or could fall further, probably isn't a good idea, as the mortgage (plus insurance, council tax (or rates) and other expenses) will be costing you money each month. Usually this cost is offset by rental income. (And if you're to let it, perhaps let to a protestant family, but then that side is a complete mystery to people from other parts of the UK.)
Also I would assume you are paying your parents lodge at the moment, if you moved in you would save the lodge money and put it towards your own bills, they may be cheaper
Freudian slip? (ghetto)
I have sent an e-mail to the company saying I am interested but this is one of the first things I will be asking. Considering the house a few doors up (who is a good friend of my mum's) is currently valued at £75k.
I was actually thinking that doing buy-to-let and letting to a protestant family, would be a better option. But my sister has just informed me that the house never keeps tenants for some reason (she knows a girl who had to move out after 2 months due to attacks). But again, a protestant family renting would be the best option.
I just learned a new word, thanks
To be honest, I havn't been very thorough in my thought process with this at all, it seems. I just thought, I'll take out a mortgage, still live at home & save. Best case scenario = it earns a profit as and if the house values increase over the years. Worst case scenario, I could either sell it and get my money back or take a small loss or if anything ever happened to my parents, it would be somewhere I could go live. I wanted it more as a security blanket for the future rather than a 'live-in now home'.
Instead of lodge I pay the phone/internet, elec & sky Direct Debits monthly, & chip in with gas.
I was also thinking "I'll get a loft extension built on it aswell" to make it 4 bedrooms, thinking that would be about £10k. But a quick search on Google makes it at more like £25k-£40k for a loft extension :eek: I was trying to be sensible but really it has highlighted my shortcomings ie I know nothing about mortgages!! I work in the same branch as a few mortgage advisors though so might just ask them for a quick bit of advice also, next week,
Lmao
i bought a flat with a loan from my employer who was a large insurance company. The moment I got married, they demanded I repay the loan as they assumed I was going to move in with my OH. :rolleyes:
You know the Belfast wags' answer to that?
It's: "Are they Catholic Jews / Buddhists or Protestant Jews / Buddhists?"