View Full Version : Should i buy or rent, if i plan on emigrating in 1/2 years?
OK so i'm getting kicked out from home soon (house has been sold), so right now, i've got a choice... either rent somewhere, or buy somewhere.
I'm planning to emigrate in around 1-2 years (realistically - but hopefully nearer to a year)... and i have NO idea what i should do.
I don't really want to rent, because that just feels like throwing money down the drain (plus i work in london, and rent prices are hilariously depressing). But at least by renting, i have a bit of freedom (i can up and leave with relatively short notice).
I think i'd rather buy a 1 bedroom maisonette or flat, but i have NO idea about mortgages or anything like that... what if i get a mortgage of x amount of years, then 1.5 years into it, i decide to emigrate? Will i gain/lose any money by selling early, are there charges for paying off your mortgage early?!
Are there also good '1st time buyer' deals to be had?!
I really dont have a clue! But basically i just need to know if by buying a place, im going to end up losing a lot of money if i have to up and leave.
thanks in advance! :D
If you've got the money, then buy.
Atleast you know that when you sell it will be worth more so you will atleast have made some money.
Like you said, renting is throwing money away.
The one good thing about it is that you don't have any big commitments and can leave pretty quickly if you need to.
Owning a property can take time when selling as it is a chain of events as the buyer may not be ready to move in as his house isnt sold, etc.
If you haven't lived away from home before, renting may be a good way to start so that you can get a feel of what it is all about.
If anything goes wrong, you don't have anything to loose.
Alternatively, another option is that you buy the property in London and if possible, keep it once you emigrate. You can then rent the property out and make money from it. However, you need a lot of money to do that.
Yeah i definitely dont have the money to keep a place in london :D
I'm pretty lucky, as im going to be 'inheriting' a lump sum, which is the only thing that's actually enabling me to buy a place (without it i'd be screwed!). So 'hopefully' ill have enough for a nice enough deposit.
Hmm your post has made me lean towards buying! :D
Wondering if it would be possible to get a 2 bedroom place, and rent a room to a friend (would help pay the mortgage!).
Are there usually 'penalties' for paying off your mortgage early?
orangebird
23-05-2007, 09:29
Yeah i definitely dont have the money to keep a place in london :D
I'm pretty lucky, as im going to be 'inheriting' a lump sum, which is the only thing that's actually enabling me to buy a place (without it i'd be screwed!). So 'hopefully' ill have enough for a nice enough deposit.
Hmm your post has made me lean towards buying! :D
Wondering if it would be possible to get a 2 bedroom place, and rent a room to a friend (would help pay the mortgage!).
Are there usually 'penalties' for paying off your mortgage early?
Depends on what offers and conditions are attached to the mortgage you finally go for. Get the independent FA to help you.
If you plan to keep the property & let it out after you emigrate, I would buy. If you plan to sell, I wouldn't. Reason being the costs involved in buying and selling (solicitors fees, stamp duty etc) may negate any small profit you might have made in the year or so that you own the place. Whilst prices are still going up, you're buying at a very expensive time anyway, and the rise in property value is slowing, and I don't believe you acn make much profit anymore in such a small amount of time. Best thing though is to get advice from an FA. hth :)
Many mortgages do have those penalties, my parents' mortgage had a £8K penalty which reduced each year, so watch out for that.
Look into the costs of selling, stamp duty, estate agent's fees, seller's pack cost, solicitor's fees.
If you don't expect to be able to sell the house for more than that after 2 years, then it's not going to be worth it.
Likewise, if you work out how much money you're going to get after selling it, take away mortgage costs for that period, then add the rent cost for the same period, and see which one actually costs more. For instance, I'm paying £750 a month on a house which to mortgage would be around £1600 a month, with the added costs of fees, and repair bills if anything goes wrong. So I'm better off renting.
The big advantage of buying is if your plans fall through, then you have a solid foundation to continue on.
I'd say rent. At least you know when you are ready to emigrate, and the tennacy ends, you can leave.
If you buy, you could be stuck trying to sell a home that that noone's buying. Some visas etc mean you have to emigrate within X amount of time. Plus interest rates are rising and people are predicting a price crash...
dcclanuk
23-05-2007, 10:29
I'd say rent. At least you know when you are ready to emigrate, and the tennacy ends, you can leave.
If you buy, you could be stuck trying to sell a home that that noone's buying. Some visas etc mean you have to emigrate within X amount of time. Plus interest rates are rising and people are predicting a price crash...
as above, or I would say BUY depending on where you live. If u live near london/in london, then house prices are going to start shooting up as the olympics nears, so even after paying bank penalty charges for paying too early, it could still be beneficial....
Hmm i need to look at all the different mortgage types are available (oh what fun).
Or should i just rent... and save all the hassle......... :/
I'd rent. It's far more flexible, and you don't take a risk in house prices coming down/having difficulty selling your property. Plus, as mentioned, you need to factor in stamp duty, solicitors/agents fees etc. Also as has been mentioned, the rent you pay on a property may be considerably lower than the interest you would pay when buying that property. If you are only going to be in the property for a year it's not worth the hassle of buying in my opinion.
Depressing :( im going to have to pay around £500ph for some studio hell hole in london.... its s0o0o0o0o0o0o0o0o0o gonna feel like im just p*****g is away :'(
Depressing :( im going to have to pay around £500ph for some studio hell hole in london.... its s0o0o0o0o0o0o0o0o0o gonna feel like im just p*****g is away :'(
We, you could end up peeing a lot more away by buying. For the sake of 1-2 years (and as you said, its closer to 1), you'd be saving money in the end. If you was renting 10 years, yeah you could say that.
Regarding the £500 for a studio hell hole... Try examing transport maps of London. Sometimes you can move out of London (and get a nicer place for cheaper), but still be 'close'. For example, Harlow is on the mainline into London Liverpool St. You can do it in 45 mins.
Yah thats how ive been searching. Right now im looking around Chingford.. which seems nice.. and about 25 mins into Liverpool St. station. Although i work in West london... i don't fancy living there... seems a bit of a dump! lol (currently living in Kent - 35 mins into Charing Cross)
Yah thats how ive been searching. Right now im looking around Chingford.. which seems nice.. and about 25 mins into Liverpool St. station. Although i work in West london... i don't fancy living there... seems a bit of a dump! lol (currently living in Kent - 35 mins into Charing Cross)
Chingford is nice... and £500-£600 can get you something reasonable.
Only thing i'd mention, Chingford Station isn't an Oyster station yet, so if you want to go Oyster-only like Red Ken would like, you'd need to bus into Walthamstow and get the Victoria line in, which is a pain.
Yeah that's not an issue for me really, i have an oyster card right now, but it's just got a standard monthly travel card (zones 1-6!)
How much does location add to the rental price? I don't currently drive, so when ive been searching for places, ive specified that they're within 1 mile of a train/tube station :S
Yeah that's not an issue for me really, i have an oyster card right now, but it's just got a standard monthly travel card (zones 1-6!)
How much does location add to the rental price? I don't currently drive, so when ive been searching for places, ive specified that they're within 1 mile of a train/tube station :S
Doesn't matter really. 1 Mile from Chingford St. covers most of Chingford. Public Transport covers the area pretty well.
Any other suggestions for nice areas? :D
It's hard to decide when i have no idea about areas where i've never even visited! lol
Dunno really. Debden isn't bad, and prices there are fairly reasonable. Its on the Central line too.
Cool, thanks for the advice - now back to rightmove.co.uk to depress myself :D
King Of Fools
23-05-2007, 14:59
Personally, I would rent in your situation. The last thing you want is to be waiting to sell a house when all you really want to do is get on an emigrate.
Renting is only "throwing money away" if it costs more than the interest portion of a mortgage, plus any interest you would earn on any savings. I am renting a 2 bed house for £595 pcm If I were to buy an identical house I would have to pay £1000 pcm on mortgage interest alone!
SMHarman
23-05-2007, 15:01
What they all said. Buying is the longer term option, you probably don't want to be moving more often than every 5 years if you own.
That said, the rental market in London is healthy and you may well be able to cover the mortgage / building insurance costs by renting.
That could mean you leave the property here and have the mortgage paid over time by someone elses rent. Need to have that plan properly worked through from the outset though.
TheDaddy
23-05-2007, 15:07
Depressing :( im going to have to pay around £500ph for some studio hell hole in london.... its s0o0o0o0o0o0o0o0o0o gonna feel like im just p*****g is away :'(
You could always rent a room in a shared house, a mate of mine does in Stratford for about £50 per week, nice house and his housemates go back up north on Fridays so from Friday morning to Monday night he doesn't even see them, the down side to it obviously is you might have to try a couple of house shares before you find one you are comfortable with
joglynne
23-05-2007, 16:11
You could always rent a room in a shared house, a mate of mine does in Stratford for about £50 per week, nice house and his housemates go back up north on Fridays so from Friday morning to Monday night he doesn't even see them, the down side to it obviously is you might have to try a couple of house shares before you find one you are comfortable with
I have to agree with TheDaddy.
Sharing is a good way to make the transition from living with your family and living on your own for the first time. If it works well it means that you only share expenses, not go through the whole business of setting up accounts for things like your utilities. It also makes it easier to pack-up when it's time to emigrate.
If you did go this route I would also suggest that you investigate short term investment options for your 'inheritance'. It might as well work for you rather than sit in a bank and tying it up it stops a large sum burning a hole in your pocket :D
LSainsbury
23-05-2007, 19:58
How about this:
Buy a place where you plan to emigrate to - then rent it out...with the rent income you can rent a place here ...
Do-able?
Vlad_Dracul
23-05-2007, 20:21
Have you considered house or flat sharing? There are quite a few popular websites where you can search for people who have a room to rent. It would be more economical,you would still have flexibility AND with the right house mate(s) you could boost/enrich your social life..
eg
http://www.spareroom.co.uk/
http://easyroommate.com
etc
etc
How about this:
Buy a place where you plan to emigrate to - then rent it out...with the rent income you can rent a place here ...
Do-able?
That..... is actually an interesting idea i hadnt thought of! I have friends in America so that would help as well (assuming they'd help me lol) but yeah.... hm interesting........... ill look into that!
As for house sharing - hmmm i would do it with friends, but i dont think i could live with random people i dont know... and the thought of sharing a bathroom/kitchen with random ppl... just doesn't appeal :P Not being snotty, i just wouldn't be comfortable with it :D
What's the housing market like where you're going?
Is it stable, heading for a crash, about to boom?
Central America? (Texas).... i have no idea! - anyone?
We were in a very similar situation to you back in 2000. We were renting at the time, but were already planning a move back to France - as it happened, we emigrated 6 months later. The landlord, however, hadn't been using our rent to pay his mortgage, so he was being forced to sell the house to repay his debts.
We had a choice... buy the 3-bed semi-detached house in a nice street (fairly dodgy part of Bristol though) from the landlord - probably at a decent price as he needed to sell PDQ. Or move out and rent somewhere else in the short-term.
We decided to rent somewhere else. Although it made things easier for us, I still regret not having bought the house we had been in. It was sold in 2000 for £75K and a very similar house just a few doors down in the same street has just sold for £165K.
A colleague who emigrated at the same time as us was in a similar situation... he owned his house in Watford and didn't know whether to sell it and buy somewhere in France, or keep it and rent it out. He kept it and was fortunate in being able to rent it out easily. He's been laughing all the way to the bank ever since.
Of course, there's no guarantee that the housing market will continue to rise (or crash) so if this post has meant you're thinking of buying now with a view to letting it out you should really be thinking long-term. Don't buy somewhere with a view to selling it in a couple of years time - instead think of having the tennents paying your mortgage off, so that in 15 or 20 years you've essentially got a house for free. You'd need to factor in Capital Gains Tax, as you'd be running this as a business rather than it being your primary residence, but these can be worked around if you've got a good accountant.
Good luck whatever you decide to do :)
ps - where are you thinking of emigrating to?
---------- Post added at 10:52 ---------- Previous post was at 10:51 ----------
edit - just seen your last post whilst I was writing this, so forget that last question.
That sounds good, but at the same time, it sounds like a lot of hassle as well, i think i'd prefer to keep things simple for the time being.
+ yeah Texas is where i'll be headed (or thereabouts). Spent 3 months over there a couple of years ago and really loved it, friendly people, good weather... and generally a much better quality of life! (Obviously there are pros and cons of living in England/America - but i'm pretty damn sure i wanna live over there!)
That sounds good, but at the same time, it sounds like a lot of hassle as well, i think i'd prefer to keep things simple for the time being.
+ yeah Texas is where i'll be headed (or thereabouts). Spent 3 months over there a couple of years ago and really loved it, friendly people, good weather... and generally a much better quality of life! (Obviously there are pros and cons of living in England/America - but i'm pretty damn sure i wanna live over there!)
Have you looked into the visa/green card requirements etc?
Yeah.... and what fun it all is!
I'm planning to get married.... fun & games!
King Of Fools
24-05-2007, 12:29
Central America? (Texas).... i have no idea! - anyone?
House prices in USA are falling at the moment and are expected to continue falling after the problems in the sub-prime lending market:
http://www.usatoday.com/money/economy/housing/2007-05-08-nar-hosuing-forecast_n.htm
Isnt moving to America very difficult? You need to have a job set up, and it needs to be a required job, and a bunch of other requirements as well?
House prices in USA are falling at the moment and are expected to continue falling after the problems in the sub-prime lending market:
http://www.usatoday.com/money/economy/housing/2007-05-08-nar-hosuing-forecast_n.htm
So it might be worthwhile buying a house here then selling (or even investing your nest egg and renting), to pick up a cheaper house when it's time to move.
Decisions decisions! >.<
Now i'm leaning towards buying a place again ... lol
Really don't know.. hmmm so many choices........
As for emigrating, yeah it's a long drawn-own process, the requirements and procudures for getting a K-1 visa.... seem.... do-able i guess... certainly a lot easier than getting a work permit (which seems nigh-on impossible unless you're a professor of some kind!)
Considering we speak the same, we have the same culture in many ways, and we are close politically you'ld think it would be easier.
Right - slight change of plan - I think i'm going to give dual-ownership a go!
Luckily my mum seems to be up for the idea! Sounds like a pretty good plan really!
http://www.sharetobuy.com/information/buying-property-with-family.php
SMHarman
05-06-2007, 16:10
As for emigrating, yeah it's a long drawn-own process, the requirements and procudures for getting a K-1 visa.... seem.... do-able i guess... certainly a lot easier than getting a work permit (which seems nigh-on impossible unless you're a professor of some kind!)
The K1 visa to green card is a slow process. Takes about 12 months to process and no hope of expiditing. The I129 application to get the temporary equivilant is not any quicker.
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