Buying Property/rising up the ladder - is it just What We Do? I want to get off...

[Pavlov]

DH and I own our own flat. Or rather, probably the front door, front windows, few bricks. Oh and the new bedroom up top, we own all of that.

We have two children. And we want to move. We can't afford it now as DH has lost his job. But, that will change in the future.

However, even if we absolutely max ourselves out, we will get a house that is ok. It will Do. But it won't be everything we want. We won't for example, be able to get a huge garden. Or 3 good sized bedrooms with a study, dining room, garage. Whatever we buy will, even though costing us a lot of money, will need work done to make it 'finished'.

So I am thinking, why bother? Why do this? why spend 100 of Ks potentially to get something that we are not 100% happy with. In the hope that, next step, we might get a bit closer to what we want. Then again later, a bit closer, then, when the kids are adults and we have a huge house, we will sell it and downsize.

If we rent out our flat. That is our investment kept. Then, we can rent a lovely property, in the countryside. Something we could not afford to buy. No millstone of a mortgage around our heads. If we don't like it, we can move. We won't have 1000s of £ estate agent fees, or having to redecorate/renovate/rebuild/do up costs when we move. We wont have to fix a leaky roof, or burst pipes, or worry about negative equity, or getting a good rate of mortgage/interest rates going up.

and with a target of 15 years, we will build our own place. Exactly as we like.

The thought of renting out a little cottage in the country makes me feel warm and fuzzy, the thought of going through the trauma of selling/buying and living on a shoestring for something we don't even like that much terrifies me.

Is it just me who feels like this ownership culture is just all its cracked up to be?

Renting is fine if you have a good landlord. Ditto renting out your flat if you are prepared to manage it and maintain it well for your tenants.

Well, problem is, our mortgage is £900/month. The identical house next door is let and was advertised at £1800/month to rent. DH and I cannot afford to rent .

But, if you currently have a mortgage in your flat, then you will still have a mortgage to pay while you are renting another property, won't you?

And you will still have to fix the leaky roof etc on the flat, and worry about the equity, and worry about getting nice tenants and how to cover the mortgage if you have a gap between tenants....

I can see the appeal of renting instead of having a mortgage, but I don't think you get the advantage if you still have the worries on a flat you don't live in.

Pavlov this is exactly what DH and I have been thinking of doing!
Only we want to self build in the next 3/4 years, we could start this year but it would strain us and we would like a bit of saving behind us.
Trying to decide to sell up completely and sit on the savings or rent our house out.
Or just stay put for the next 5 years, it's in a good area low crime lots of families but I'm just so desperate to move somewhere more rural with more space inside and out and the change in lifestyle it will bring.

DH is worried about coming off the property larder in case for some reason we are never able to get back on. Owning a property is a safety net in his mind.
I hate the idea of renting out our house it seems like a lot of hassle plus we would need to update it a bit.

I've been looking at rural country properties too probably not a good idea I feel like I'm teasing myself.

Same problem here as bibbitybobbityhat.

Our house too small for us really - we cann afford to move up property ladder but then realise that in 5 yrs our mortgage is paid off so why put oursleves through all tht extra expense

amuminscotland yes of course, but with this mortgage, we are well in to it, it is manageable, we know what is wrong/right with it. Most of the issues with it are fixed already as we spent a lot of time in it. And it is a good investment, as the mortgage would pay for itself. A house to buy would cost more per month than this place, but not a place to rent. And if we buy a house, we will have to sell this. If we rent, we don't. And have something to fall back on if it does not work out. If it does, somewhere for the children to stay when they go to uni/work/etc.

We could stay here. But it is too small, no garden. We can do probably another 2 years, when DS is 2.5 most, it will be too small for us. If we move into a house we will start all that doing it up all over again and it will cost us much more. And with absolutely no money whatsoever to enjoy being a family. Just so we Own Our Own House.

thediaryofanobody we would love a self build before 15 years, and if we get there before that, we will, but best to not get excited when DH is not even working atm. He wants to do it in 5 years, I say before the kids are too old to be there with us ideally but whenever we can afford it. If it is ourretirement property so be it!

When we bought, it was the be all and end all. Must Own Our Own House. Now, I want the children to run outside and we can grow veggies and pretty flowers and have a bit of space and eat at the table and the kids have their own bedrooms. And we can't buy that. But we can rent it.

We would be perfect landlords! We have considered renting it through university, there is a great medical school right up the road, we are commuter belt into and out of the city, (can walk in 10 mins to uni). We considered that we would rent it to postgrad/final year students who want a quiet life. And in the summer, DHs mother/family like to visit so we would let them stay here (they could cover the mortgage). And if the students want to stay on over the summer we could negotiate that/account for any weeks in the summer not covered.

We would also have a contigency fund to pay for repairs to the property/proper insurances/funds to cover rent. If we find we are stuffed for tenants for a while, we will ditch where we are and move back in.

I have also said to DH I would be happy to just sell up, take any profit and stick it in savings towards our house fund, I see no advantage of owning it. All the advantages of owning, they are what DH thinks! He insists we will not sell it if we rent. I would be out of here in a shot if it was up to me.

Thats the reason why we are considering renting what we can rent is by far bigger than what we can own in the location we are looking at. DH is dragging his feet because our mortgage is very low at the moment which I know is sensible but dear lord I hate feeling like our life is on hold.
I'm taking the European view at the moment that owning is rather over rated.

thediary me too. I don't want to wait to see if the market gets better/worse. I want a garden while my almost 4 year old cares about those things. So that DS can have those things. DD is such an outdoor child, she loves all things nature. And yes we have the beaches/woods/moors, but sometimes, it is nice to not venture out. I would love for her to just pop out to do some gardening with DH for half hour.

Yesterday we were round a friend's house. I used their washing line to hang my washing up on, DD spent an hour potting some tomatoes (or whatever you do to them!), planting some poppy seeds, watering the garden, then she went to the wild garden to knock on the 'fairy door' and have stories about fairies with friends DH. I can't do that here. We have a concrete yard. My friend's do not own their house.

The one real advantage to buying that I can see is that you can plan to pay off your mortgage by the time you retire. If you are renting, then your rent will stay the same even though your income has dropped, which would force you to downsize even if you were happy where you were.

But, if you can plan to build your own place before then, that cancels that one out.

Most European countries don't have the same obsession with home ownership - I don't know if renting is fundamentally better in other countries (cheaper, more secure tenancies etc) or if it's just an attitude thing.

Bear in mind though that only the interest part of any rental money you receive will be tax deductible. Any money from rent you receive above that (ie to repay the capital on the mortgage) will be taxable, so you need to factor that into your sums.

daisy what is the interest rate for that? We will factor it in.

We reckon we can cover our mortgage and some more if we get two mature students in. Our flat is nice, and rooms are big, plus a study. All mod cons etc. We would be able to pay the additional costs of interest from the income plus a fund for repairs/cover summer non-rental periods.

amuminscotland but, my children won't be able to enjoy the garden I will be able to afford when I retire. It will take us a while to be in a position to afford things that will make my children's lives better than they are now (not that they are bad now, i just want them to have some space). I don't care about tv, or playstations or even a big house. I just want some space that won't cripple us financially.

And we will have the flat when we retire, with no

oops, DS posted that too soon! Clever that he is!

I went on to say, we will have the flat with no mortgage when we retire, and hopefully, our own self build too

Next month I am planning on putting my 2 bedroom garden flat in a pretty swish area of London on the market. The day I put it on the market, I'm handing in my notice. When I sell it, I'm going to pay back the mortgage and take the cash and buy a house outright on the coast in a really unpopular and cheap area. Mortgage-free! I'm planning on freelancing, fostering and spending more time living rather than working to support us.

I'm never going to be able to move back to London but I really don't care. I have realised that I spend over half my take home pay on the mortgage and childcare. I also spend a fortune on commuting, two sets of clothes (work and not) etc. I am really looking forward to a simpler lifestyle and getting off the bloody housing ladder.

Erm. Hate to be negative but it does sound like you're being a bit optimistic about what renting out your flat would involve.

If you rent to students - even mature students/PhDs - they are likely not to take very good care of the place. They won't necessarily trash it (if you're lucky) but they won't necessarily treat it carefully either - for example they may not notice if something is leaking, until it's a really big problem.

This will mean it costs a fair bit to maintain, and will probably make it more difficult to sell when you want to sell it.

Students will also want something furnished, so that's an additional expense (assuming you would take your furniture with you).

As a landlord you have duties to make sure furniture is fireproof, electrics and gas are tested regularly, fire alarms work, etc.

If you are living far away, you may need to employ a managing agent to take care of the place, take an inventory, respond to any tenant needs/emergencies, etc. Also to find the tenants in the first place. Agents take a substantial % of rent in fees.

If you have a void period, you won't be able to just "move back" - you will be tied into a tenancy agreement on your rented house. Not to mention having nursery etc near where you are renting.

As mentioned, you will pay tax on the rental income (though mortgage interest and repair expenses are deductible from that).

And you will still need to worry about its leaky roof/burst pipes/mortgage rates etc.

I'm not saying don't do it. I'm just saying, do the maths very carefully, and do your research on what it really costs to be a landlord. There is a website called Landlord Zone or something like that which could help.

Also, are you SURE you could afford more renting than buying? I had thought that mortgage rates are so low at the moment that actually it's not much different.

Minipie - you do have a point about interest rates. The only reason renting has been ok for us up until now is we were paying below market rent. We are now buying our rental and will be paying £10 per month more mortgage than our rent!

However, we did jump off the ladder Pavlov. Sold our house 5 years ago and rented a lovely cottage in the countryside. Would have stayed there long term but scarily damp and with DS we had to move.

Renting V Buying is a tricky one - if rates go up again it will be a close call but probably balance tipped in favour of buying atm.

minipie yes, i agree, not a walk in the park, of course. Luckily for us, we had a loft conversion done so the fire reg stuff and electricity stuff should all be fine as we had electrics tested and certified, new electric fire alarms throughout whole house, including communal corridor etc all properly serviced/battery backup etc.

I had not really started this thread with a view to working out if it was doable, rather, was this feeling just me, was I getting it wrong, or was this 'what is the point of owning' feeling something that was more common than I thought - however, the more you all put up concerns for me to think about, the more i think about it, and the more i find I do have answers to those problems or they are not too bad and I am even feeling a bit excited about this being a reality one day soon when DH is bringing in some money again!

Currently our mortgage rate is quite high comparatively - fixed! But when it is unfixed, who knows where it will take us. I will make no presumptions that the low rate of interest will stay that way forever.

And yes, leaky pipes etc. Like I said - i would sell like a shot if DH would let me. So he can deal with those!

minty do you feel, for you, at the time when you jumped off, it was the right thing? Do you regret it? Do you think it was worth doing? How easy was it to jump back on again?

See, i like the idea of that. I will give you an example of prices. A 3 bed detached cottage in the countryside, one we are looking at just for curiosity is worth around £250k, if it were on the market right now. We could not afford a house at that price. And I would not want to pay that much even if we could afford it. That same house is being rented for £850pm. Now, I can't even afford that atm but once we are both back at work (me in a couple of months, on ML) we can afford that as long as we had our mortgage here covered.

We would definitely consider renting long term if there were better tenants rights in this country. I didn't enjoy being responsible for owning a house last time around and I hate the whole buying/selling process!

Unfortunately, you are totally at the mercy of how good your landlord is for things like maintenance and repairs and whether they suddenly decide to sell up.

We have had a mortgage and also rented.We are now in the position where we rent off an estate.They don't sell their properties and actually let you live in their houses.This means we can put pictures up and paint etc! I would never,ever rent through an agent or private landlord again...total nightmare.Also we would never be able to afford this house if it was for sale or even for rent through an agent...we are pleased.Am hoping that when we buy again we will buy abroad or somewhere in Scotland near the sea.

mini oh and moving back etc re nurseries and stuff, we are not intending on moving far...we live on the edge of a city, and DD is at school just a little further towards were we want to live so we would live on the beach side of that, not a busy road side and DS goes to nursery (or will) next to where I work, that wont change.

This is not some pie in the sky idea you know. We have thought about it for a while. I just thought, i must be mad, to not want the same as others. Why is it people want to go onwards and upwards to reach the sky when they are old, what about now? Is owning a house in the future such a big deal?

Even the building of a house. I like the idea of it, it would be lovely to have the perfect house. But I would not be devestated if it did not happen. DH on the other hand would be, and I want to do it with him because he really wants it.

doobydoo can I ask how you came about being able to rent of an estate? Was it through work? luck? Alas, there are some wonderful estates down in Devon, but they are mostly holiday lets these days.

Sorry Pavlov - cross posted!

Yes, jumping off the ladder worked for us. We would probably be in NE now if we had bought again. We have had 5 (fairly) stress free years in rental and I haven't had to rush back to work which has been great. However, we have needed more parental help to buy again as we moved to a more expensive area.

The National Trust used to do cottages for long term rent - might be worth checking out their website?