if you lease a property, you are not a tenant, when you lease a property, it is essentially yours until the lease is over, if you don't renew, you then become an assured tenant, for which you would pay rent.
I wouldn't be very tempted to sell for that price Adam_bagpuss, not around here anyway, because after taking into account things like the interest paid to the bank to hold the property, bank and legal fees + taxes from both purchase and sale, estate agent commission at sale... well around here, there would not actually end up being a profit. If you doubled your money in 5 years Da_Rude_Baboon, as in including not just renovation costs but also purchase price and all of the above, well then I take my hat off to you edit: You got a link which says that RichCreedy? Afaik, leasing = renting
Thanks MVA. It was partly down to luck as we managed to buy it for less than it was expected to go for originally. MVA the leasehold , freehold thing I think is unique to England and maybe Wales so you will probably never heard of it before? This link should explain it a bit better.
The house and area im in doesnt sky rocket with prices and they will always remain low. I dont know about aussie but after all fees and such t would certainly not cost anywhere near 15K, there would also be no tax on the purchase of new house since stamp duty starts much higher up the ladder. there is also no tax on selling if its your primary home. I wouldnt imagine fees to be any higher than 3-5K netting me a small but welcomed 10-12K for my effort in doing up the house.
WOW, never heard of anything like leasehold or freehold before That really is freaky for me, mind = blown I was starting to think that Richcreedy is trolling me but again, this site proves to be a wealth of information, thanks guys I imagine that purchasing via leasehold would be a significantly cheaper option, in which case it would make sense, but otherwise I'd call it a big rip off! Around here, there is no CGT from selling your primary home, but there is stamp duty on any purchase, so after you sell, you'll have to pay stamp duty when you buy a replacement home. Another ~100k home will incur ~$2500 stamp duty. Purchasing the current home for $75k would have incurred ~$2k around here, so that's ~$4500 all up in stamp duties. The bank and legal fees such as conveyancer & title costs, will be about $1-2k Estate agent commission for a ~$100k sale, would be about $2-3k The cost of holding the current $85k home for 18 months @7%, would be about $10k (This holding cost is real, as even if we buy and renovate totally in cash, we still have to compare the holding cost to what we could have made instead, such as if we had just stuck the cash into a high interest account. It's the same as what it would cost us to shove $85k under the mattress for 18 months.) so thats: $4500 stamp $1000-2000 bank + legals $2000-3000 re $10 000 interest $17500-19500 total fees $75 000 purchase price $10 000 renovation $102500-104500 Since inflation is typically around 3-4%pa around here, the total cost of the project around here would be $106000-108000
wow sucks to be in australia. you also cant use holding cost because money not put into your house would not be put in a bank it would be spent on rent which is money down the drain. unless you plan on living homeless.
leasehold is not purchasing is just renting with more strings attached which gets you more benefits than simply renting. after your lease is finished even after 30 years you still do not own the property and would have to give it back to the owner. i know theres options to purchase along with a lease hold but generally not. unlike renting leashold means you own the house for the period of the lease ONLY. renting you never own it and therefore cant do anything to the property and the landlord can vacate you with notice or sell the property your renting.
leasehold is more like temporary ownership, you can't normally buy a 30yr lease with a mortgage, normal mortgages on a leasehold property require the lease to be 25+ (lender dependant)years more than the mortgage runs, so for a 25yr mortgage you would need a minimum lease of 50yrs, it is dependant on the mortgage lender. you can get a specialist to lend on short leases, but expect to pay a premium.
I guess if you're living in the house adam_bagpuss, and you enjoy doing the renovation work in your spare time, then you can write off the holding cost. I'm looking at things from an investment on the side perspective, which is an affordable option, and it's one of the small reasons Australia doesn't suck btw I like the leasehold benefit of being able to access the property's equity, but the long lease terms mean it would have to be cheap to make things worthwhile.
Don't buy unless you can afford it, The advice used to be don't spend more than 30% of your disposable income on debt and that includes a mortgage interest rates might be 5% ish at the moment but I remember them being at 15% and can easily change that much in 25 years with no guarantee you can increase your total income to match. Renting make sense for me as I rarely spend more than 12 months in a property before moving for work and I love the fact that when anything breaks its not my problem, my landlord paid out £3K on 22nd December to replace the boilderthat died.
I live in SE london and have basically given up on ever owning my own property. Im on a lowish income, but on my own. Even if i was on 50 grand a year i still couldnt afford anything as im now mid 30's well 32 to be precise. 1 bedroom flat is in excess of 200k. Its a joke really. Supposed i should of started saving at 16 but kinda enjoyed life for a few years. Im not sure if id change things given the chance. Ive got mates that have just have no lives and just work to pay for there house, always worrying about there mortgage payments as well, i cant see a life in that. If you can afford i say go for it though! Always nice to have something to hand to kids and to retire in.!
thats your problem right there. im on a pretty low income but can easily afford a house up here. if your keen to own or have a better lifestyle move to yorkshire as thats were its at
if you're on 32k then a couple of years saving will give you £20k for a 10% deposit no problem? But you're right, given that the average UK income is 26k, 200k for a flat does seem alot. I'm norwich based and bought a nice feature filled 3 bed terrace for 130k.
I have health issues that require i be near family.....mental health etc.........but if my missus was to agree to a move then that would be fine... we have 150k equity on that side lol!!! but ignore that or that will confuse my original post.
not while renting plus self employed want much much more than 10% as will many high street lenders. typical down here is between 30% and 40% not heard of 10% deposit since the 90's this way.
This is true. I bought a 2-bed house in Leeds a few years ago for £40k. There are some real bargains if you're prepared to slum it.
Maybe you probably could rent something cheaper? Even if that means slumming it? What about getting a full time job in a similar profession for ~6 months, and continue your business on weekends and perhaps even after hours? This way you only need 10% deposit, and 6 months might be more than enough time to get it.
