Next year I'll move to Scotland. We'll likely live there 5 years or so. To rent would be about 42 000gbp (minimum) for 5 years. We could buy a flat for about 135 000.
Assuming 5% down and a high likelihood that the value of the property will go up, would you lean toward buying or renting?
I know nothing about international real estate, but renting seems better to me. Not knowing the areas, the process for buying/selling, resale values, etc...I wouldn't want to risk locking in for just 5 years.
Post by DotAndBuzz on Oct 31, 2014 10:45:58 GMT -5
Rent for 1 year minimum. That way you can figure out exactly where you want to be, type of residence you want for the duration, and just settle into the transition in general.
If you get there and it looks like you'll want to stay for a longer time period, buy.
Personally, I cannot imagine having to deal with home ownership and maintenance in a foreign country, knowing I'd then have to sell it in 5 years potentially from overseas. We were in one location for 5 years and approached it with the rent for a year, then buy mindset. Financially, we would have nearly broke even in those 5 years (with more money spent in the renting option). Turns out we hated the area we thought we wanted to live in initially, and the other "super hot" area for people our age was a money pit of old houses.
Rent for 1 year minimum. That way you can figure out exactly where you want to be, type of residence you want for the duration, and just settle into the transition in general.
If you get there and it looks like you'll want to stay for a longer time period, buy.
Personally, I cannot imagine having to deal with home ownership and maintenance in a foreign country, knowing I'd then have to sell it in 5 years potentially from overseas. We were in one location for 5 years and approached it with the rent for a year, then buy mindset. Financially, we would have nearly broke even in those 5 years (with more money spent in the renting option). Turns out we hated the area we thought we wanted to live in initially, and the other "super hot" area for people our age was a money pit of old houses.
So yeah, rent first.
The good part is that we have both already lived in the area, so we know it's where we want to be. FI currently lives there and rents a flat so we do have somewhere to start from.
Five years is not necessarily the real amount of time.
Does it change things if we would be totally willing to continue to live there until it sold, with the condition that we would need a couple of months to then get our move sorted?
Where in Edinburgh would you be able to buy? Would you be able to live in a nicer, more convenient area if you were rending versus buying? When you move, would you need to sell in order to buy elsewhere or would you be able to rent if you couldn't sell easily? Any plans to have children in the next five years as that would affect the size of the place you needed to buy? Renting would give you flexibility to move...
We'll live in Leith whether we rent or buy. We would get a minimum 2 bedroom so if we had a baby we would still have the space.
I'd rent for a lot of reasons. I wish we were renting now and didn't buy. Owning a home cost soooooo much fucking money. We'd save so much from renting.
Rent for 1 year minimum. That way you can figure out exactly where you want to be, type of residence you want for the duration, and just settle into the transition in general.
If you get there and it looks like you'll want to stay for a longer time period, buy.
Personally, I cannot imagine having to deal with home ownership and maintenance in a foreign country, knowing I'd then have to sell it in 5 years potentially from overseas. We were in one location for 5 years and approached it with the rent for a year, then buy mindset. Financially, we would have nearly broke even in those 5 years (with more money spent in the renting option). Turns out we hated the area we thought we wanted to live in initially, and the other "super hot" area for people our age was a money pit of old houses.
So yeah, rent first.
The good part is that we have both already lived in the area, so we know it's where we want to be. FI currently lives there and rents a flat so we do have somewhere to start from.
Five years is not necessarily the real amount of time.
Does it change things if we would be totally willing to continue to live there until it sold, with the condition that we would need a couple of months to then get our move sorted?
I don't know. How's the market? Hanging around until it sells isn't necessarily just a couple more months, depending on the market, location, condition of the property, etc.
It just seems like a big risk for 5 years. Hell, I wouldn't buy a house in the US if I was potentially only going to be in it for 5ish years. It isn't a guaranteed return/profit on investment in that time period any more.
Nice - I love Leith! It may be worth looking into the newer flats around there if you end up buying as then you should have lower ownership costs. You should also be able to rent out fairly easily in that area if you need to move before you have a chance to sell.
Is there any chance you would want to stay in Edinburgh longer term? Or the UK in general? If so, I'd lean towards buying as you would be on the UK property market which would be helpful anywhere in the UK. Also, I've had friends who've moved to places for 'maybe five years' and end up staying a lot longer and they wish they'd just bough from the start.
There's a very real possibility we'll be there long term. Renting would be easy as well, from a getting a tenant point of view, but not so much from the property management aspect.
There are a ton of new flats going up and Leith is really booming. Do you know the banana flats? There's talk of them being demolished. That is prime real estate for new developments.
Neither of us have ever owned before, so that's a big part of the hesitation. But my dad is a landlord and an accountant, and his vote is leaning toward buying.
First year of marriage, especially after being long distance for so long? I'd definitely plan to rent the first year. That's a lot of major life stressors all happening in a very short amount of time!
Nice - I love Leith! It may be worth looking into the newer flats around there if you end up buying as then you should have lower ownership costs. You should also be able to rent out fairly easily in that area if you need to move before you have a chance to sell.
Is there any chance you would want to stay in Edinburgh longer term? Or the UK in general? If so, I'd lean towards buying as you would be on the UK property market which would be helpful anywhere in the UK. Also, I've had friends who've moved to places for 'maybe five years' and end up staying a lot longer and they wish they'd just bough from the start.
There's a very real possibility we'll be there long term. Renting would be easy as well, from a getting a tenant point of view, but not so much from the property management aspect.
There are a ton of new flats going up and Leith is really booming. Do you know the banana flats? There's talk of them being demolished. That is prime real estate for new developments.
Neither of us have ever owned before, so that's a big part of the hesitation. But my dad is a landlord and an accountant, and his vote is leaning toward buying.
Renting would be easier though, hands down.
If you think you'll stay long term, sounds like it might be a good time to buy. HOWEVER, consider the other side of the development boom in that area - if you decide you want to move back, how easy will it be to sell your "old" place when there's a brand new one being built across the street? Who's going to want yours when they could get a new one for the same price (maybe less)?
I mention this because a friend of mine got hosed in that type of situation. Bought a condo in an area that was turning over like crazy. When he went to sell, a bunch of apartment complexes had joined in the turn around and were converting from apartments to condos - gutted them all and sold them as sparkly new condos (granite, stainless, etc), so people were buying them instead of the "old" 5 year old condos 1/4 mile away.
Obviously I'm very hesitant to buy. Good luck with your move and plans! It sounds like a fun adventure!
First year of marriage, especially after being long distance for so long? I'd definitely plan to rent the first year. That's a lot of major life stressors all happening in a very short amount of time!
Can you stay in FI's place for the first year?
It's a one bedroom with the lease being up in Oct, so about a month after I get there. At that point we will move into a 2 bedroom, either long term or while we look for a place to buy.
Being in his 1 bedroom with all the crap I'm bringing over will be an excellent test of how we deal with stress lol.
I'd consider buying if it's a really strong market. Where I live, five years is definitely enough time to recoup the costs of buying and then some (or a lot). There's obviously always uncertainty, though, so you need to be okay with the concept of not being able to sell it on a set schedule. I agree that it might make sense to rent for a year first, though, while you get more familiar with the area and the market.
Rent for 1 year minimum. That way you can figure out exactly where you want to be, type of residence you want for the duration, and just settle into the transition in general.
If you get there and it looks like you'll want to stay for a longer time period, buy.
Personally, I cannot imagine having to deal with home ownership and maintenance in a foreign country, knowing I'd then have to sell it in 5 years potentially from overseas. We were in one location for 5 years and approached it with the rent for a year, then buy mindset. Financially, we would have nearly broke even in those 5 years (with more money spent in the renting option). Turns out we hated the area we thought we wanted to live in initially, and the other "super hot" area for people our age was a money pit of old houses.
So yeah, rent first.
Just curious, what areas were you looking at before? Old West side?
Metro Detroit when H was doing his training over there.
Post by mrsukyankee on Oct 31, 2014 14:24:53 GMT -5
Rent first year and then buy if the market seems good - right now there is a such a potential bubble that I wouldn't buy. But it might hang out and the mortgage rates are fabulous at this moment.
Post by Mrs. ChanandlerBong on Oct 31, 2014 22:34:41 GMT -5
After living in a "hot" area that then experienced a significant drop in real estate values, I'd lean toward renting, at least for the first year. Granted, this is in the US, but we have friends* who bought when the market was great, then watched their home values fall by 25-40,000 in less than 5 years time.
*the only reason we weren't affected, is because my H bought the house we lived in at that time about 10 years before our area experienced it's real estate boom.