# investing 95k!



## flawless1987 (May 3, 2011)

recently got a claim in and looking to invest my money for when im older to have a good income seeing as im only 23 and want to have good money about me when i have family etc.. anyway im looking you lads advice on this, im looking to buy a small plot of land and build 3-4 3 bedroom houses on it.. now i know it sound expensive but ive researched and you can build a house these days for around 20-30k using timber framed houses and light/cheap walls on the inside.. also i can do alot of work on them myself.. anyway the main point is that i want to rent them out at around 100-110 pounds per week.. what do you guys think? sorry if ive missed out certain things if i have fill me in 

cheers


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## tom-coupe (Jan 17, 2009)

have you looked at the price of land mate? it can be very expensive thats what costs so much. a plot big enough for 3-4 houses will be 60k i would have thought.


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## flawless1987 (May 3, 2011)

yea i forgot to mention that.. it is around 60k.. and there is not doubt i will need atleast 60k mortgage to do what im planning to do.. shouldv mentioned that.. other than that does it sound like a good idea? getting rent for 3-4 houses will pay off a 25 year mortgage easily i would think?


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## Obsessed Merc (Apr 10, 2011)

Plse send me the link for the £20-30k houses. 
Dont forget about ; foundations, earthworks, drainage, planning fees, building control fees, NHBC, kitchens, electrics, plumbing, sanitary ware, tiling etc.

We just finished building a 4 bed house in Bromley (Kent), our costs were over £260k, but it was a nice kitchen etc etc. Excludes any fees etc.

I rent out properties, the returns/yields have increased in the last 3 yrs. It's a long term plan and has not been without niggles in terms of mentalist tenants now and then..

Set your sights a bit lower and perhaps buya nice flat and rent it out ?


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## Obsessed Merc (Apr 10, 2011)

Or a big bar of gold in a bullion vault ? Cue ball will fill you in on the gold trail


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## justina3 (Jan 11, 2008)

add into the sums, drawings no doubt grief and appeal with the council buildings regs, building control insurance that lot alone can add 10-20k to the mix

no offence but that wouldnt be where i was going to put my money have you thought about buying some small houses from auction plenty of bargins to be had there at the moment.


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## flawless1987 (May 3, 2011)

Obsessed Merc said:


> Plse send me the link for the £20-30k houses.
> Dont forget about ; foundations, earthworks, drainage, planning fees, building control fees, NHBC, kitchens, electrics, plumbing, sanitary ware, tiling etc.
> 
> We just finished building a 4 bed house in Bromley (Kent), our costs were over £260k, but it was a nice kitchen etc etc. Excludes any fees etc.
> ...


hmmm well ive only recently got the claim and havent went full into the work of it all but 260k for 1 house is steep! wow..

terraced houses to build 3 off as im sure you know is alot cheaper than building 3 seperate buildings.. 20-30k was a rough guess.. the frame work for the house is about 7-10 k and i was hoping the foundations, drainage, and for the rest of the brick to be built around the frame would be around 20k.. anything im missing out.. thanks for the advice so far by the way.. and remember it was only a thought and havent invested a penny yet..


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## ant_s (Jan 29, 2009)

Have you got your own house? If not why not buy a house and move in, thats a pretty decent deposit, least you are moving towards owning you own house alot quicker than most will.

If you don't want to move it, why not still buy a house you like, rent it out, someone will be paying the mortgage (or most of it) off for you, then you move in when you want/can.

Imo having a smaller mortgage is better, as you will own a house much quicker, and the money you would be paying repayments you save?

I can't see the reason behind buying a house to rent out, unless you already own one.


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## flawless1987 (May 3, 2011)

im currently living at home and will be moving in with the girlfriend within the next year or so.. i want to invest my money.. im from northern ireland by the way and i dunno bout england but theres flats around here for 45-55k??

any other ideas on how to invest my money. i had thought about premium bonds but i want something that i know will earn me good money and will benefit me in the future.


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## Obsessed Merc (Apr 10, 2011)

I had the max amount of premium bonds for about 2 yrs. Just about beat Interest rate at the time. Only small wins. It's a bit like the lottery. Larger prizes are statistically almost impossible to "win"


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## Obsessed Merc (Apr 10, 2011)

+1 for getting yourself on the property ladder first. Good luck !


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## ant_s (Jan 29, 2009)

Why not use the money for your and you gf's place then mate? That's a huge investment, you'll be saving £400-£600 a month in mortgage repayments, will be a easier life for you and your gf in your new place, and any money you save could go towards a deposit for a 2nd house to rent out if things go ok.

Thats definately what i'd do.


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## ant_s (Jan 29, 2009)

Also, just think what type of investment will "earn" you between £4800 and £7200 a year, i'm taking that as your mortgage payments over the year.


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## A210 AMG (Nov 8, 2008)

Best thing I ever did was buy my own house,

Spend the two years I bought it doing it up and more than doubled my money when sold, put the extra into buying another that needed work and did the same on that..

I've done this the past few years moving every 2 or 3 years, house has got bigger / nicer / more land etc however mortgage isn't 

My advice would be to do something similar, if your handy (like we had to be) you can fit a new kitchen / bathroom, build stud walls, paint / decorate its the best way to earn some money.


Buy in a nice area or the next 'trendy' area you can afford.


Building a house for 30K maybe possible but doubt it (wooden framed flat pack) but I don't know what area your looking at? where can you buy land for £60k large enough for building 3 houses and drives etc?

Much easier to buy exsiting house to do up and move on...


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## ianFRST (Sep 19, 2006)

you recently got a claim in?? how do i get a 95k claim? 

id also use it to buy a house!!


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## tom-coupe (Jan 17, 2009)

yeah buy your own house mate have a small mortgage


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## hoikey (Mar 9, 2011)

ianFRST said:


> you recently got a claim in?? how do i get a 95k claim?
> 
> id also use it to buy a house!!


I was just thinking that lol


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## ivor (Sep 24, 2008)

this is going to sound sound cynical and nasty but before doing anything with the money protect it from the girlfriend so that if the relationship ends you keep the money a friend of mine had his mortgage paid off after being diagnosed with testicular cancer due to an insurance policy,His girlfriend went for half the house when they finished but luckily for him he had spoken to a lawyer before they moved in together


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## Sciroccostyle (Mar 31, 2011)

^^ agree with ivor there mate. It's not cynical it's protecting your assets. Buying, delevoping and buiding 3 houses on a plot of land is madness if you havent done anything like that before especially with 95k which is not a fortune by any means. If I were you i'd buy 1 or 2 flats or a house, do some renovation and rent it/them out. Research the area very carefully, talk to several estate agents about your plans and find out hot rental spots near to you (ideally within a 30 minute drive from where you live)

Then move in with your girlfriend if that's what you want to do and pay her rent if she has a mortgage or split the rent if rented. at least that way if you do ever split up and statisically at your age you will you can simply leave and you have your property/s and your own financial security. If you stay together for life nothing is lost as you have the income and the asset of your property/s


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## Noakesy85 (Dec 27, 2008)

im 25 and in the process of buying my first house (had the offer accepted on monday)... got the house (3 bed semi with a large garden) for £128k, the deposit is 10% so £12,800... the house once its been brought upto date should be worth around the £175-200k mark... If i understood the mortgage advisor correctly... In a couple of years when the time comes to re evaluate the mortgage we should have enough equity for a 25% deposit which in turn reduces the repayments. Chances are if i have to move (im with the airforce) i'll have the mortgage changed to a buy to let and put it on the market... as long as i have a tenant the rent should cover the mortgage and the house should theoretically pay for itself


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## Harwoodandy (Feb 27, 2010)

flawless1987 said:


> hmmm well ive only recently got the claim and havent went full into the work of it all but 260k for 1 house is steep! wow..
> 
> terraced houses to build 3 off as im sure you know is alot cheaper than building 3 seperate buildings.. 20-30k was a rough guess.. the frame work for the house is about 7-10 k and i was hoping the foundations, drainage, and for the rest of the brick to be built around the frame would be around 20k.. anything im missing out.. thanks for the advice so far by the way.. and remember it was only a thought and havent invested a penny yet..


For reference, and as a rule of thumb it's approx £1000 per sqm for a build with a modest fit out,(excluding plot price or fees) you could reduce that somewhat by doing some works yourself but still wouldn't be much below £800and that's assuming you have the time.

It's often a false economy because the cost of servicing the loan whilst doing the work yourself, is greater than the money saved going the DIY route.

The £260k is a fair price assuming a good spec. at £1500 psm, would equate to a property size of approx 170 sqm then factor in local variables for South East location etc.

Hope that helps?


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## rich1880 (May 26, 2010)

Agree with the above, £800 sqm, you will be looking at around £60k to build yourself plus the price of land, if you ever need any plans drawing up, give me a shout!


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## centenary (Sep 5, 2010)

///M_Karl said:


> im 25 and in the process of buying my first house (had the offer accepted on monday)... got the house (3 bed semi with a large garden) for £128k, the deposit is 10% so £12,800... the house once its been brought upto date should be worth around the £175-200k mark... If i understood the mortgage advisor correctly... In a couple of years when the time comes to re evaluate the mortgage we should have enough equity for a 25% deposit which in turn reduces the repayments. Chances are if i have to move (im with the airforce) i'll have the mortgage changed to a buy to let and put it on the market... as long as i have a tenant the rent should cover the mortgage and the house should theoretically pay for itself


Erm, word of caution, unless the house is currently a shed, I think you'll need more than a couple of years to realise that projected 175k - 200k. House prices are currently falling.


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## Noakesy85 (Dec 27, 2008)

centenary said:


> Erm, word of caution, unless the house is currently a shed, I think you'll need more than a couple of years to realise that projected 175k - 200k. House prices are currently falling.


The property itslef isnt in bad shape, structurely its sound, it just the interior that lets it down as its so dated and in a state of disrepair, also it requires a bath putting in (as its currently set up for dispabled access) and a stairlift removing. The only reason we got it so cheap was simply because the owner wanted a quick sale. i had to fight tooth and nail for 2 days to get it to that price too (he was adiment he wasnt gonna let it go for less than 135k). As for the projected prices, ur right it wont be for a while yet, our mortage is a fixed rate for 5 years so in that time prices should be on the increase so fingers crossed we might come out of this smiling :thumb:


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## kh904 (Dec 18, 2006)

///M_Karl said:


> The property itslef isnt in bad shape, structurely its sound, it just the interior that lets it down as its so dated and in a state of disrepair, also it requires a bath putting in (as its currently set up for dispabled access) and a stairlift removing. The only reason we got it so cheap was simply because the owner wanted a quick sale. i had to fight tooth and nail for 2 days to get it to that price too (he was adiment he wasnt gonna let it go for less than 135k). As for the projected prices, ur right it wont be for a while yet, our mortage is a fixed rate for 5 years so in that time prices should be on the increase so fingers crossed we might come out of this smiling :thumb:


I agree you will increase the value by modernising it, but the question is by how much vs how much it's going to cost to do it up.

As Centenary says, on average, prices are going down (imo house prices are still waaay overpriced), interest rates are abnormally low & will rise (historical average is about 6-7% iirc), people are losing jobs, pay is freezing at best if not decreasing, inflation is starting to run away, resulting in less affordability when buying a house.

The idea that a lick of paint and a bit of decorating can give you a return of tens of £'s like DIY/home improvement shows & estate agents used to preach about a few years ago isn't so true today.

Having said that, a good property in a good area that's under/less than market value & affordable is potentiallya good investment.


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## justina3 (Jan 11, 2008)

///M_Karl said:


> im 25 and in the process of buying my first house (had the offer accepted on monday)... got the house (3 bed semi with a large garden) for £128k, the deposit is 10% so £12,800... the house once its been brought upto date should be worth around the £175-200k mark... If i understood the mortgage advisor correctly... In a couple of years when the time comes to re evaluate the mortgage we should have enough equity for a 25% deposit which in turn reduces the repayments. Chances are if i have to move (im with the airforce) i'll have the mortgage changed to a buy to let and put it on the market... as long as i have a tenant the rent should cover the mortgage and the house should theoretically pay for itself


sorry might be me but i dont follow that at all, 
"should have enough equity for a 25% deposit which in turn reduces the repayments"


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## Harwoodandy (Feb 27, 2010)

///M_Karl said:


> im 25 and in the process of buying my first house (had the offer accepted on monday)... got the house (3 bed semi with a large garden) for £128k, the deposit is 10% so £12,800... the house once its been brought upto date should be worth around the £175-200k mark... If i understood the mortgage advisor correctly... In a couple of years when the time comes to re evaluate the mortgage we should have enough equity for a 25% deposit which in turn reduces the repayments. Chances are if i have to move (im with the airforce) i'll have the mortgage changed to a buy to let and put it on the market... as long as i have a tenant the rent should cover the mortgage and the house should theoretically pay for itself


Don't want to sound negative matey but tread very carefully.
Buy to let isn't the game it used to be with rising property prices and banks throwing money around - unless you are an experienced landlord i wouldn't recomend it in the current economy. 
To take your example above, you imply that you will remortgage to take out some equity in a year or 2 and convert to buy to let if i understand correctly?

So your current loan is c110k, you remortgage up to say £145 to give you a bit more cash for a bigger deposit, so far so good.
You will have to pay fees for this and fees for your next loan (c£2k) you now have a £145k loan to service on your original property that at 5.5% will be costing you £660 pcm interest only.
So, assuming you can find a good tennant (not as easy as you might think!) your rental income needs to be 125% of your repayment or £825 pcm to satisfy your lender.
Your costs every time your tennant changes will be approx £500, plus your ongoing insurances, maintenance, gas check, etc. etc,
You say your'e in the RAF so i'm assuming you will need an agent to manage it all as well, (plumbing problems, electrical faults, rent collection) so add another 5% a month for that.
Oh, don't forget the inevitable voids whilst the tennant changes - you still have to cough up your mortgage, insurance etc. empty or not.....
Factor into this that most lenders now want 75% LTV to lend any money and it suddenly looks less attractive...

Don't get me wrong - if you can tick all the boxes, then go for it, but it's a long term thing and not for the faint hearted.

ATB

Andy


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## Noakesy85 (Dec 27, 2008)

Harwoodandy said:


> Don't want to sound negative matey but tread very carefully.
> Buy to let isn't the game it used to be with rising property prices and banks throwing money around - unless you are an experienced landlord i wouldn't recomend it in the current economy.
> To take your example above, you imply that you will remortgage to take out some equity in a year or 2 and convert to buy to let if i understand correctly?
> 
> ...


I see where you're coming from, as it stands i dont plan to move anytime soon. I'm going to be living in the house and its going to be an angoing project untill the day i am posted (sent to another station) which im hoping wont be for another 4 or 5 years minimum. Renting is just an option but its something im not going to start looking into properly untill closer the time.
When it comes to remortgaging, i'll see what my options are at the time


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## Coxy914 (Jan 14, 2007)

justina3 said:


> sorry might be me but i dont follow that at all,
> "should have enough equity for a 25% deposit which in turn reduces the repayments"


if you have enough money to put a 25% deposit down, the lending rates from the bank are at a lower interest rate.
We're currently moving house and have enough to put 25% deposit down and we have been given a 0.9% reduction from the bank.
Doesn't sound much but over the course of the year it works out to nearly a grand.


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## tomah (Sep 17, 2010)

Perhaps you could stay put and look for a repossession? They usually go for a lot less.

Also, make sure it's in a good area, rather than 'cheap'.

Another idea is to invest in silver, not gold. China need silver, and unless the US sell it to them behind closed doors (illegal, but possible) the price of silver is going to rocket.


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## tom-225 (Aug 30, 2009)

i am acutally looking at having a timber frame house build down here, fr the price of a good 1 bed flat i can have a 3 bed bungalow and a double garage down here. i have been looking at NorScot buildings for people that are interested.


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## justina3 (Jan 11, 2008)

Coxy914 said:


> if you have enough money to put a 25% deposit down, the lending rates from the bank are at a lower interest rate.
> We're currently moving house and have enough to put 25% deposit down and we have been given a 0.9% reduction from the bank.
> Doesn't sound much but over the course of the year it works out to nearly a grand.


i follow that but that is not what he said "should have enough equity for a 25% deposit which in turn reduces the repayments"


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## Coxy914 (Jan 14, 2007)

justina3 said:


> i follow that but that is not what he said "should have enough equity for a 25% deposit which in turn reduces the repayments"


exactly. monthly repayments are reduced as you can borrow at a reduced lending rate if you can put down 25% or more deposit.
for example, with Nat West at the minute, if you had a £200,000 mortgage and could put down 25% deposit, your monthly repayments would be based on 3.39%, where are anything over, you'd be paying the higher rate of 3.99%


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