Property dilemma

[jonspal]

Hi all,

I'm in a bit of a situation and can't make up my mind what to do. Me and the other half have had our flat on the market for 18 months or so and in that time we've had 3 sales fall through. We've got a buyer now but the problem is that there are no houses to buy in the area that we want. We've tried to buy 2 properties but either haven't met the sellers valuation or the the seller has changed their minds about selling . We've been keeping our buyer hanging on for us to find a place and he's getting fed up with waiting and is threatening to pull out.

So, right now we're considering going into rented and waiting for the right house to come on the market. Is this a good idea? Will we be able to get short term lets easily or do you normally get tied in for 6 months?

Also, I'm wondering what is the best thing to do with the cash from the sale of the flat. I thought we could use it for an investment property to do-up and sell on to make a bit more money for the deposit on the next house. But is this the right market for doing that? It seems we may have trouble selling that too but there is the scope for cash to be made judging by the prices things are going for.

Any thoughts would be appreciated.

[Dr_Gonzo]

I wouldn't worry about getting a lease of less than 6 months. By the time you've found somewhere you want, gone through the buying process, and then finally moved in you'll be well into the 6 months if not over. As for investing the money, well it depends what you want to do. Do you want a nice place to live now, or take a risk and try and get a better place in the future.

[eddie1980]

As said the process will take more then a day or two. Also most contracts have a notice period of a month or so after the initial 6 months. So assuming it takes you 4-5 months to find somewhere and get sorted you should be fine!

[jonspal]

Dr_Gonzo said:

As for investing the money, well it depends what you want to do. Do you want a nice place to live now, or take a risk and try and get a better place in the future.

I'd prefer to try and get a better place for the future, but is now the right time to be doing property development?

eddie1980 said:

As said the process will take more then a day or two. Also most contracts have a notice period of a month or so after the initial 6 months. So assuming it takes you 4-5 months to find somewhere and get sorted you should be fine!

My concern is if a property comes on a day after we move in. Let's say it takes 2 months to move, would that mean we'd have to pay the remaining 4 months rent?

[mechsympathy]

jonspal said:

My concern is if a property comes on a day after we move in. Let's say it takes 2 months to move, would that mean we'd have to pay the remaining 4 months rent?

You have a choice - take a chance that you have to pay a few months rent extra or lose (another) sale.

[jonspal]

Is now a good time for property development? Can decent returns still be had in the current environment?

[mk1fan]

Depends what the figures are like. If you can get a property at the right price, in the right area and works can be done 'cheap' enough then there's still money to be made.

Now is not the time to enter the game having watched a couple of series of Property Ladder and Grand Designs as your knowledge base.

[V8mate]

We kept our rental property going for 3 months after buying our current place.

It meant that we could get the house just how we wanted it, making as much mess as necessary, without worrying about damaging anything or having to live in a building site.

[ShadownINja]

I guess the old adage, "act in haste, repent at leisure" makes sense here. I wouldn't want to grab the first thing that appears just to get the sale. You'll have years to regret it if you buy a house quickly and find you hate it.

[Nolar Dog]

jonspal said:

Is now a good time for property development? Can decent returns still be had in the current environment?

Yes. If you know what you are doing and buy the right thing at the right money.

[JQ]

Definately move into the rented accommodation. You will be in a much better buying position when you find your ideal house. The fact that you will be a buyer with no chain will make you a much better prospect than anyone else. You'll also be under far less pressure to buy that new house so you'll have the opportunity to turn down potential properties which aren't perfect. Don't forget in this market of falling values and falling rental values you may actually save money buy renting for a period, even if it takes 2 years you're still unlikely to lose money. Negotiate hard on your rent, there is an over supply of rental properties because of people renting out their houses so they can move as they are unable to sell.

Agree the sale, move into rented and watch all the pressure just disappear.

[AntwerpMan]

if you dont move in to rented property, your buyer pulls out and the right place comes along at a great price, what are the chances you can get your place sold quick enough to buy the right place? If the right place did come up and you lost it because you couldn't move quick enough you would be kicking yourself for loosing it for the sake of a few months rent, which in the grand scale of things is a relatively small amount. I's say take the sale and get in to rented property

[monthefish]

Nolar Dog said:

jonspal said:

Is now a good time for property development? Can decent returns still be had in the current environment?

Yes. If you know what you are doing and buy the right thing at the right money.

and ensure you can turnaroud the project quickly enough.

[Nolar Dog]

monthefish said:

Nolar Dog said:

jonspal said:

Is now a good time for property development? Can decent returns still be had in the current environment?

Yes. If you know what you are doing and buy the right thing at the right money.

and ensure you can turnaroud the project quickly enough.

I'd cover that in "know what you are doing" but it's a valid point to single out to a newbie I suppose.

[monthefish]

Nolar Dog said:

monthefish said:

Nolar Dog said:

jonspal said:

Is now a good time for property development? Can decent returns still be had in the current environment?

Yes. If you know what you are doing and buy the right thing at the right money.

and ensure you can turnaroud the project quickly enough.

I'd cover that in "know what you are doing" but it's a valid point to single out to a newbie I suppose.

Indeed. I've seen many an 'experienced' developer go grossly over schedule.

[schmalex]

We went into rented for 6 months after we sold our last house. To be honest, it was without a shadow of a doubt, the best thing we ever did.

It gave us the time to really research the local market and wait until the perfect house came up. When it did, I was able to negotiate a very good deal, despite there being 3 other offers on the house at considerably more money than we finally agreed on because we were seen as the safest option for our vendor to secure the sale.

Once we had exchanged, there was no rush to tie up completion dates with removals companies, as we rolled the rented house over by 4 weeks or so, giving us time to do some decoration in the new place & then move in at our leisure.

Some people might view renting as chucking good money after bad, but in our experience, it has saved us from either buying the wrong house, or paying significantly more than we did.

[Nolar Dog]

schmalex said:

Some people might view renting as chucking good money after bad...

Sadly, too many people do just that.

When all you're actually doing, whether you rent or buy, is paying £xxx to have a roof over your head each night.