When you factor in additional running costs (management fees, transaction fees, upkeep of the property, etc. etc.), CGT on any potential increase, the risks (guaranteed returns on deposit vs. non guaranteed capital appreciation), etc. etc. it wouldn't be something that I would jump at.I have put in an offer 20-25% below the asking price at a level that would achieve rent covering an interest only mortgage.
Absolutely, but the OPs timeframe is relatively short.I don't think there is any contradiction here because she is talking about two different time frames.
Many people who expect prices to continue falling from the present level for the next year or two, expect that they will eventually recover.
Brendan
Add in our high transaction costs and I wouldn't be terribly confident of being very much in positive territory in 10 years. Potential return versus potential risk look small to me.I hope to retire in 10-12 years so would be relying on capital appreciation to make a profit.
Capital appreciation of 3-5% won't even clear inflation.
yeah i think you are better off not buying . if you have to take out an interest only mortgage i think u are putting yourself under too much stress
Thanks for all the advise everyone. I really appreciate it. Not surprisingly my low offer has not been accepted - so far. Does seem too much of a risk so based on all your considered views I have put it to the back of my mind for now anyway. Thanks again.
It's not easy in this climate to find a property where the rental income covers the interest with only a 25k deposit. How confident are you in your rental income projections?
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