Am I mad?

[Tostretchornottostretch]

Can I get your wise opinions, please?

I'm early 50s, divorced.
Young adult kids away at uni and stay at exdh's when back as he kept the family home.
I'm renting but now the divorce is settled I can think about buying.
I live in the EU.

Divorce settlement is 180k from sale of property and 80k compensation.
I have invested the 80k to supolement my future pension so will not touch it.

I have some inheritance in the UK, £80k, currently in Premium Bonds and cash (emergency fund)

I live in town as it's convenient for work.

I would love somewhere greener but don't want to be isolated or dependent on my car as currently I can walk or get public transport pretty much anywhere I need to go day to day.

My budget was 250k all in, involving a down payment of 180k and a mortgage of 70k, but I can't see anything that appeals.

This morning an ad has popped up in my old neighbourhood, a desirable leafy suburb close to town. Pretty much the perfect spot. It has a garden, a garage (rare) and a downstairs bedroom and bathroom (bonus). There are two further bedrooms upstairs, two cupboard/box rooms which could be turned into a bathroom and walk-in wardrobe. Plus the attic space is huge and could also be converted. This could potentially add a lot to the value.

But after fees/equivalent if stamp duty it'll be 300k and needs quite a lot of work: double glazing, probably electrics, plus the upstairs. The kitchen and downstairs shower are not to my taste but absolutely functional and I could wait a few years before touching them.

I'd want to do the double glazing, electrics, insulate the attic and get the 1st floor bathroom done first. The plan would be to let one or two rooms to students (local high school has an international section and there are teenagers who want lodgings Monday to Friday).

It's too big for just me but my dc do come home and right now my poky flat is not big enough.

Also it's the type of house which will definitely appreciate in value, one because of the neighbourhood and proximity to town, and two because it's a 19th century property with character (tiled floors, fireplace).

Am I mad to stretch my budget? To take on this project? I would have to use up my UK emergency fund (£80k, so about €90k) to add to the deposit and fund the most urgent work (energy efficiency related, so insulation & windows) and electrics. I'd have €40k available for this. I wouldn't be able to get a mortgage for more than €70k. My job is safe, and I plan to stay here another 10-15 years.

I could get a 'nice' new build 20 minutes away by car for 240k and not have to touch my UK emergency fund.

But this would be a real project. The garden is just begging to be taken care of (I miss my garden!). And it's the kind of place which once renovated and if correctly priced could be sold within a week, so I could easily resell.

What would you do?

I think it is going to be really hard for people to work out how much renovations will cost in a differnt country, especially if we dont even know which one or how rural you are.

I like a house renovation so i would say go for it. Can yoj do any of the work yourself? Are you happy decorating or will it all be getting people in? Do you mind living in a projected house and how long would that be ok for?

Do you like the idea of taking on a renovation as a hobby/project?

If I've got the maths right, you have 180k + 80k cash = 260k, + 70k mortgage, so you actually have 330k to play with, but then there are all of the renovations, none of which need doing urgently? Do you tend to save every month i.e. can you gradually do the renovations from your earnings?

I think if you answer 'yes' to all those Q, then I'd go for it.

(I'm having a crisis about property, whether to move to somewhere bigger or not - similar age to you, but different circumstances - I might post my dilemma later!)

I think there's merit to your argument, but is it also a somewhat romantic/fantasy view of the future which skirts round the actual logistics of renovations? I am not practical or handy in the least and while 20 years ago I'd have been okay living hand to mouth in dust and flaking paint - not so much now I'm 60. Only you know though. If you're able to see it through then it sounds like a beautiful place and fantastic investment - but old houses are absolute money pits and if you're on a tight budget that might be a huge problem.

I think the only essential things I'd need to have done are change the windows and sort out dodgy electrics, neither of which I coukd do myself.

Insulating the loft I would probably get done too, as right now it's bare rafters.

Reworking the first floor, knocking down partition walls, putting up new ones I could do with some help from one of my dc who is pretty handy.

Happy to do any decorating, tiling, flooring myself as have done in the past. Not plastering though, I would get that done.

As for living in a project, I wouldn't need to do the ground floor yet, other than windows and electrics. I could live entirely on the ground floor while any wirk is going on upstairs as there is a downstairs bedroom.

I would save up for a new kitchen.

I hate to stamp on your dreams because the house sounds lovely and I understand your excitement about it but I would probably err on the side of not taking this renovation on.

It depends where you are in the EU but generally renovation costs are huge. As with everywhere, finding reliable tradesmen is a nightmare! We’ve found in two EU countries where people generally pay higher taxes, that there isn’t as much disposable income available to renovate and consequently the range of materials available, unless you are going for Ikea or top designer ranges, is poor.

Speaking as someone in the EU who started a renovation in their 50s and owing to the pandemic, when tradesmen became even more scarce and the cost of materials shot up in some instances by 43%, I would hesitate taking this on tbh.

If it’s an old property then you need to have a 30% contingency for hidden surprises.

If you were in your thirties and had the skills to do it yourself, I would say absolutely don’t hesitate. But I think it’s too risky if the plan involves breaking in to your nest egg and having lodgers.

A lot depends on the quality of your renovation as to whether you can reclaim the costs in terms of property value. Have you ever renovated a property before? It’s a lot of stress and responsibility on your own. There’s also world events to consider! Property prices may not always go up forever.

I also think it depends a lot on your life going forward. Are you a home body? Do you envisage spending a lot of time in your home and garden and creating a hub with you and students? Students might even help you with the grunt work ! The renovation might be worth it in that case but I would still worry about your financial security. Or might you want to travel and pursue other opportunities in ten years? In which case you might want a more modern smaller property that you can lock up quickly and leave?

Don’t under estimate the dip in energy you may feel past sixty. Quite a few of my friends and I have suddenly started hankering after easily cleaned, easily maintained homes that preserve our energy for doing things we enjoy!

Sorry to be so gloomy! A lot depends on whether you are a get up and go person who makes things happen and has the energy to push through no matter what. Whatever you decide, good luck!

I do, actually. I always wanted to but exdh was dead against it so we never did.

180k euros from divorce, 90k euros from UK (inheritance), 70k mortgage.

So that's 340k total, leaving 40k after purchase for urgent renovations (double glazing and loft insulation, electrics), and putting a bathroom in on the first floor, plus would make sense to run electrics and water/waste pipes up to the 2nd floor (=attic) at the same time.

I would have about 300 per month max to spend on renovations once that money is gone, but I think I could find a student lodger which woukd probably bring in the same again 9 months of the year. So will definitely need to save up and do things gradually.

Yes, the money pit risk is very real!

I would be more likely to jump right in if it wasn't taking me right up to my limit.

These are the very arguments I had already convinced myself of!

I agree that the quality of materials is either not so good or shockingly expensive here.

I see the renovations lasting 5-6 years.

Yes, I am a homebody. But the thought of being stuck out in a village somewhere frightens me. This is is walkable distance to absolutely everything I need: butcher, baker, green grocer, weekly market, chemist, gp, post office, dentist all within 10 minutes. Small supermarket 20 minutes, work, town and train station 25 minutes. On two bus lines. It's a safe, quiet, family-friendly neighbourhood.

The only drawback other than the cost is my ex still lives there and we might bump into each other, but there's no animosity so should be OK.

I agree that having to depend on student lodgers is not ideal, but this would only be until I'd paid for the renovations. Also, they'd only becaround Monday to Friday during term time.

I've left a message on the estate agent's answerphone. I may not even get a chance to visit as properties like this get snapped up in that neighbourhood.

Whatever happens, I'm actually pleased to have got the ball rolling, even if it's just the realisation that I can stretch my budget a bit.

Yes I think the practical consideration of having everything nearby is really worth a lot!

And it’s the best of both world’s if you have your own garden.

Even I am getting tempted now! 😆

Speaking practically, does your ex being nearby mean you have good contacts re: tradesmen? Good recommendations are like nuggets of gold because people tend to keep good people to themselves!

Emotionally speaking, will your ex living nearby prevent you in any way from forging ahead with your new life? Also, old friends?
Just rhetorical qs but worth consideration maybe? It would certainly be convenient for your dc to visit!

Yes, location, location, location!

I have some contacts for reliable tradesmen as both we and former neighbours had work done over the years.

Re exdh, we'd be opposite ends of the neighbourhood, so other than the market, probably wouldn't cross paths too much.

He's not from the area originally and it wouldn't surprise me if he moved away once he's retired and the dc have finished uni in 3-4 years, especially as his new partner lives 2 hours from here. I'll be around much longer for work so need to put down some roots of my own.

Grrrrrrrrrrr!!!!!

Done some serious sums.

It's too much of a stretch.

I can't risk it.

Boooooooo!!!!!

Oh no! Oh well. It’s v wise to be sensible about such a big decision. At least it got you thinking hard about options! Hope you find somewhere suitable!

Edited to say: given the current state of the works, you may also come to be thankful for this decision in the end!

Yes, got quite carried away!

However, I have arranged a viewing on Saturday. I need to start seriously looking so may as well get going.

The agent tells me full reno has beed priced at 150k euros. This makes the asking price way beyond what is reasonable. Also, altjough it's in my preferred suburb, thd address is in the less pricey part.
Basically they're waiting for someone to fall in love with it or has more money than sense.
I'm taking one of my friend's sons who has worked in construction.
IF I really like it I may make an offer of 200k, which will be refused.
But hopefully the agent will take me seriously for future properties.

Thank you for your wisdom!

That’s a shame about the asking price but at least you are forewarned. Good luck with the viewing tomorrow!