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£32000 salary, 30 year old Male, Single. Options for a FTB to Enter Property Market.


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As the title says I have an OK salary. I should get to the mid 40s in 5 years. Nothing spectacular I know. I have a bigger deposit than most people. Inheritance and own savings I could put down close to £70k. I think £50k is my own target. I am a Londoner currently living at home:( I know I am quite fortunate and can afford a property in most parts of the UK. However for family and job prospects I would like to settle in the South East.

Basically I want to know what you would do in my shoes? I have some ideas in my head...

1.     Buy a property say around £200k and live in it on my own

2)Buy a property say around £200k and live with a lodger

3)Buy to Let-I think I would be approved even as FTB because of my deposit? (This will annoy most of you as I know a home should not be an investment but a place to live-but we are where we are!)

4)Should I wait until I can get a higher salary then look at property?

5)Should I wait until I find a partner?

I want to make the most my cash but at the same time I feel like I have so many choices that I might pick the wrong one? Lastly I am not moving to the North so any advice for the South East only. If you think I'm living in Lalaland just say so. All opinions, insults and advice welcome.

Cheers.

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35 minutes ago, harry_j said:

This will annoy most of you as I know a home should not be an investment but a place to live-but we are where we are!

It is a place to live, just for someone else. Who is not able to obtain finance, your helping them out.

In your shoes id look to do (2) or (3).

You can do (4) if you don't think house prices will go up. As otherwise its a wasted opportunity.

Well with (5) maybe you should get ready to have a partner, somewhere to move into once you get to that point. Maybe investing now gives you an asset to sell later, so you can get a better first home with a partner.

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32 minutes ago, Adam Hosker said:

It is a place to live, just for someone else. Who is not able to obtain finance, your helping them out.

In your shoes id look to do (2) or (3).

You can do (4) if you don't think house prices will go up. As otherwise its a wasted opportunity.

Well with (5) maybe you should get ready to have a partner, somewhere to move into once you get to that point. Maybe investing now gives you an asset to sell later, so you can get a better first home with a partner.

Thanks for responding. 

Yh I've been thinking its going to be options 2/3 as well. Between the 2 of them I was thinking 3 would be more profitable as I could rent out 3-4 bedrooms in certain properties I have seen. But then some say the maintenance and hassle in managing a property is not worth it. 

My gut instinct is basically telling me to make a move in property now. I am in a unique situation for my age in that I am cash rich but not earning huge sums. I think it makes sense to put the cash into property. Just want to hear how people would go about it. Should I get the most expensive property I can afford or play it safe. aghhh too much to think about!

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House hacking (having a lodger) can be a great way to effectively live rent/mortgage free and therefore save up for another deposit, and get on the ladder

BTL is the route I'd go, as a first time investment a single family home is possibly a relatively straightforward, low risk move to get your feet under you. You could use circa £30k on deposit and purchase costs for a managed one bed with tenant in situ in the North to learn the process (remotely from London).  Being a property owner may also provide better deals on financing your second (larger) property.

If you have more time and higher risk tolerance, a BRRR as your first investment could be a better option as you (may) get some of your cash out again. 
Similarly an HMO could mean higher profits but is more work, both upfront and ongoing.
If you don't want to go the HMO route, a duplex might be a good choice given your funds (not as complex as an HMO but something more than simply a single family home). 

Lastly, I wouldn't wait. Do your research and decide on clear goals and strategy (these will change as you go, but know your goal going in), but go for  it. You will likely make some mistakes along the way, especially with your first property, but unless you completely balls it up you'll be able to fix it and carry on.

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1 hour ago, AdamPH said:

House hacking (having a lodger) can be a great way to effectively live rent/mortgage free and therefore save up for another deposit, and get on the ladder

BTL is the route I'd go, as a first time investment a single family home is possibly a relatively straightforward, low risk move to get your feet under you. You could use circa £30k on deposit and purchase costs for a managed one bed with tenant in situ in the North to learn the process (remotely from London).  Being a property owner may also provide better deals on financing your second (larger) property.

If you have more time and higher risk tolerance, a BRRR as your first investment could be a better option as you (may) get some of your cash out again. 
Similarly an HMO could mean higher profits but is more work, both upfront and ongoing.
If you don't want to go the HMO route, a duplex might be a good choice given your funds (not as complex as an HMO but something more than simply a single family home). 

Lastly, I wouldn't wait. Do your research and decide on clear goals and strategy (these will change as you go, but know your goal going in), but go for  it. You will likely make some mistakes along the way, especially with your first property, but unless you completely balls it up you'll be able to fix it and carry on.

Damn that is a detailed response. I will go away and research the options you listed! I am definitely going to make a move even if I am single. Only because of my cash reserves. Complete luck I know! I might message you if I need some help! :) Cheers 

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Like the two Adams have suggested, the lodger option would probably be the route I'd take.

With your budget of £200k, you can get some decent 2 bedders around London, depending on which area you prefer to live in. As you're currently single, it also makes life easier as you're the sole decision maker on who the lodger will be. The lodger provides up to £7,500 in tax-free income which will help build your next deposit, or help pay off the residential one which in turn helps build your savings/equity. It'll also help you learn about property (i.e. going through the purchase/conveyancing process, managing and maintaining the property etc). 

Owning your own home first will also open you up to more lenders and/or better rates. Also, 

Finally, if you're buying in London. as it'll be your first home and your principal place of residence, you can avoid the extra stamp duty which makes a difference in London where prices tend to be higher. Then if you decide to invest in a BTL up North, where prices tend to be lower, the stamp duty impact will be less. 

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