So, is now a good time to buy a house?
In my opinion, the right or wrong time to buy is a very personal question and something that only you can answer.
Buying a house is right up there on the most stressful things you can do in life. Unless you are very wealthy, the chances are, this is going to be around your neck for 20+ years unless, of course, you sell.
I have always rented houses and avoided the stresses of buying a house as I had decided a long time ago that I only wanted to buy one place, which would be my “Forever home”. However, times have changed.
Did you notice above that I distinguish between a house and a home?
I see many people buying houses at auction to rent or to flip; for these people, houses are a means to either a quick profit or a long-term income.
Although both are, in theory, suitable investments, they are full of minefields that can be very expensive. You could buy a house that needs extensive renovations and find you don’t have the money to complete the project, or you get the house finished and end up with a tenant that may make your life hell.
A home, however, is your family’s safe place and your place to make memories. It is not just a house that you constantly watch the market for a quick profit. To be honest, even a rented house could be a home.
The benefits of buying instead of renting
So, at the ripe old age of 50, why does my life plan suddenly mean it’s time to buy a house?
For those of you who read my articles, especially the “Me, myself, and my mental health” theme, you would think I was very much against buying.
Yes, renting has some great advantages.
If you find a house on one of the many country estates or farms, then the chances are you will be able to stay there forever without fear of getting a letter one day stating the owner is coming back and wants you out of the house. Unless, of course, you are a pain in the ass, in which case you will get thrown out.
Financially, however, the owner can increase the rent each year, and as we all know, rent is dead money, and rent will be due until you leave the property.
But if there is a storm and the house gets damaged, or the heating and plumbing electrics fail. It’s your landlord’s responsibility to get it sorted as soon as possible.
The way I look at a house, it is like a savings plan. The money you pay on the deposit and mortgage comes off the money you owe the bank. So all going well; when you sell the house, you should, in theory, get that money back plus, if you are lucky, profit.
As you probably know, this is how most people move up the housing ladder.
To a certain extent, you can also do what you want to your house without having a landlord to worry about. Without the pain of the annual inspections, most landlords love to do.
The downside is you are responsible for all damage and maintenance. You need to ensure your insurance covers everything and you read the small print. For example, did you know the internal door to your house from an attached garage needs the same standard of locks as if it were your main door?
So, there are good and bad reasons to rent instead of buying your home.
Why is it a good time for me?
With the advantages above for renting and knowing that I am currently in a house I could keep until I curl my toes.
Why is it time to buy a house?
Fairly simple, to be honest. You know that my end game is a retirement in the Philippines with a family and a home. Well, this all takes money. Unless I manage to win the lottery, I need a lump of money to build the home I want.
Along with saving and my other income areas (salary being one of them). I need to try and make a big lump within five years. Buying a house will I hope to enable me to buy low, improve the property and sell high.
Considerations before I buy a house
1. The size of the property and the potential to increase living area either through a loft conversion or conservatory or both.
2. Location consideration is a must. There is no point in buying a cheap house in a neighbourhood that is a war zone.
3. The Construction quality of the house and a good survey to ensure there are no hidden nasties.
4. I don’t want to buy a show home as there is no quick scope for value increase.
How to add value to the house quickly
So, over a period of five years, my renovation plan consists of the following areas. These are areas that should have enabled me to get an excellent low purchase price.
Most of the planned renovations I can do myself. This will enable me to save money on the projects. Major building works etc I will need to find a good builder.
It is also advisable to talk to a local estate agent to see if there are any “caps” on the property you are buying. There is no point in buying a house; spending a fortune on it only to find out later that the value will never go over a certain point.
Kitchen renovation – around 5-10% increase onto your house value.
Loft Conversion – around 10-20% increase onto your house value.
Conservatory – around 7-10% increase onto your house value.
Bathroom renovation – 4-5% increase onto your house value.
Automation – 4-5% increase onto your house value.
So if you use the above values, then you can work out a budget for each of the projects and decide if it’s viable.
On sale day you need to stage the house. The garden needs to be spotless and the house looking like a show home. This will attract the best prices, especially for buyers who just want to buy it and move in without the need for decorating.
Stick with me on this journey. I hope to share the whole time to buy a house adventure with you all.
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