I am looking to finally move into my own place. Have some savings and am thinking rather than getting a big loan with minimal repayment over a 30 year period to try and go cheap and get something I could pay off in 5 years time then think of my options. Do you think this strategy is sound? I woukd abviously be paying less interest on the loan but woukd this be beneficial as much as the capital gain on the bigger property?
I am looking to finally move into my own place. Have some savings and am thinking rather than getting a big loan with minimal repayment over a 30 year period to try and go cheap and get something I could pay off in 5 years time then think of my options. Do you think this strategy is sound? I woukd abviously be paying less interest on the loan but woukd this be beneficial as much as the capital gain on the bigger property?
To my mind, the place you live in represents consumption, not investment. Why? Because the more it is worth the more it will cost you.
Personally I'd be following your strategy of buying the cheapest place I thought I could reasonably live in and freeing other resources for investment or consumption elsewhere.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
I am looking to finally move into my own place. Have some savings and am thinking rather than getting a big loan with minimal repayment over a 30 year period to try and go cheap and get something I could pay off in 5 years time then think of my options. Do you think this strategy is sound? I woukd abviously be paying less interest on the loan but woukd this be beneficial as much as the capital gain on the bigger property?
To my mind, the place you live in represents consumption, not investment. Why? Because the more it is worth the more it will cost you.
Personally I'd be following your strategy of buying the cheapest place I thought I could reasonably live in and freeing other resources for investment or consumption elsewhere.
+1 to this. Start small, you can always upgrade later.
I am looking to finally move into my own place. Have some savings and am thinking rather than getting a big loan with minimal repayment over a 30 year period to try and go cheap and get something I could pay off in 5 years time then think of my options. Do you think this strategy is sound? I woukd abviously be paying less interest on the loan but woukd this be beneficial as much as the capital gain on the bigger property?
I see the nervous nellies have said start small.
Sensible but it depends on your circumstances:
Do you do a job that has good potential for decent pay rises over the next 5 years? Do you have a wife/husband that works and has a job that has good potential for decent pay rises over the next 5 years?
If the answer to either of these is yes, you should consider spending more now as upgrading is expensive (stamp duty, agents fees, conveyancing and physically moving (movers, utility reconnection etc). If you can buy a home that will do you for 15 years and can get a decent wage ramp-up you will do better than upgrading 1 or 2 times.
Having said all that, my first home was a starter house and it's good to get used to having a big scary mortgage and drilling holes in walls before buying a more longer term home. I'm not sure I'd do it differently if I was to do it again.
“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
By start small - what do you mean exactly? I would go for the greatest block value. Generally the closer to the city the better. A cheap new build on the outskirts won't increase that well. You would be better to spend a bit more and buy a shack on a decent piece of land that can be re developed at a later date. It's a bit more complicated than how much you spend. It's more about the quality and potential of what you are buying. Also depends a lot of what skills you have.
no one on here ever recommends that course of action.
the only ones spouting about it are the bears strangely enough.
Shadow 'n Mike both sound like they are lovers of debt to me Pig Iron? 'Course I could be wrong. And am absolutely certain they'll take lots of pleasure in telling me so if I am ...
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