So the other day I was looking on Trademe at houses as I do every few months, I then promptly see how much it is for a mortgage/rates/insurance etc and give up on that idea pretty fast.
This time around I am sick of living where we are, no real reason other than I can get bored easy. I found a show home for one of the companies around town that build houses that has only been there for a few years – maybe 5-7 I can’t remember, and it is pretty darn cheap, I enquired into how much it would be to move it (its up for removal only) and even without bargaining the price very much it would only be about $100k including the removal, of course there would be the price of the section and lawyers fees, connecting electricity, plumbing etc but I figure through bargaining the price of the house (which they are open too, I asked) and the price of a section it could proberly be done for about $150k – yes you people in Auckland & Wellington can shush, I know that’s mega cheap for a house. Now the thing about this is that the cheap sections are in some of the ‘bad’ areas of town, yeah that doesn’t bother me, I grew up in one of those areas and loved every minute of it, its close to the beach and lets be realistic it only takes about 15 minutes to drive from the furtherest suburb on either side of town to each other so definitely not a deal breaker. The thing that could be a deal breaker is it is small, 72sqm – 3 bedroom (small rooms, but we live in an old house that has amazingly massive rooms).
Then, last night I overhead on accident that it looks like our flatties are looking at moving out, kind of a shock, kind of not, we are a bit messy. Of course I may have overheard something and taken it out of context but at the moment with the way they have been acting the past month or so I think I’m correct.
So the other half and I went for a drive and I told him what I had heard etc blah blah and he gets really worried about things, I can ignore things and think about it when it comes time, he will worry about it every single days, especially as its all up in the air as we don’t really know if the flatties are moving or not.
Then we come to the whole house discussion and he wants a place with plenty of room, not too close to too many neighbours, in a good area, with big rooms and sheds/garages, ummm he can’t afford a mortgage for a start so good luck getting all of those things.
Were I’m in the mindset that getting that house for removal, moving it to a cheap section and living in it for a few years, then if we decide to travel for more than a month at a time rent the house out, I would buy the house under a trust I would create and it would be an investment for me down the track – the reason for living in it to begin with is partly due to the fact that I have been in kiwisaver for 3 years, hence entitling me to $3000 from the government towards my first house – the fact that I don’t really have a deposit, this would be really helpful, ok well I do have shares that I could sell, but I want to try and keep as many of those as possible, putting my eggs in different baskets and all. Then in a couple of years either travel for a bit or by then the boy will have a decent deposit and he can buy a rental house for us to live in then in a few years after that we buy a house for both of us.
I’ve looked into the mortgage and it would be about $545 per fortnight over 25 years (scarey much) but to be honest I could do it by myself without a flatmate or the b/f, I just wouldn’t be able to save all that much for travel, which is my major reason for being a bit iffy about the whole situation.
I watched part of a t.v programme on channel one on Saturday about people who own a house that isn’t worth much and they want to travel etc in the next few years but also want to keep buying and doing the things they are doing now, the people on the show ended up getting them to buy another house as a rental since they were spending all their money anyway they could then at least pay their mortgage before spending all their money and get an investment out of it, this kind of struck a chord with me, I save a shitload of money each fortnight but always end up taking some out for random trips etc (hence not having a deposit for a house – ok I could have a small one but I’m going to Thailand), so it got me thinking, if I do get a mortgage I would find ways to make the extra $$ so that I could have the travel, as travel is not something I am giving up.
So pretty much if the flatties move out we are faced with a few options;
– Keep renting our current house, extra $70 per week each minimum
– Move out to a cheaper house which wouldn’t be as nice
– Move back to the parentals and save some pennies for a house deposit (the b/f will not go back to his parentals so who would know what he would do, not be impressed with me for a start.)
– Buy a house – $150k would get us a shitter in a bad suburb – read lots of maintenance.
– Buy the house for removal and section in a bad suburb – at least we would have a decent house, although it is small. If we added $20k or something we could prob add a double garage and half of it turn into a room for my office / the other halfs stupid number of guitars.
So pretty much I am after any input you want to add, go for gold I need it that’s for sure!
I think that if you can afford to get into the market without too much hardship, then you should. Think of this as a step on the ownership ladder. Buy the best you can afford with an eye to selling and moving up the ladder later.
I would suggest that as a next step you go and see a mortgage broker, or go see your bank. A broker will find you the best deal and give you advice about fixed/floating rates etc. Kiwibank, they won’t deal with brokers.
Be aware that banks all have a formula to work out if they are going to give you a loan – they don’t care if YOU think you can afford it, it’s purely about the numbers for them. From memory, you need to be able to devote about 1/3 of your income to your mortgage, and if you have debt they will take that into account. And of course you’ll need a deposit – different banks want a different amount, ranging from 5-20-%.
The first house my husband-to-be bought was in a bad suburb miles from the city – it was a bitch to commute and we fought the traffic for 3 years. After deciding to work overseas we packed up our lives and put the house on the market. Buying and selling at the right time in the market definately helped and we came out with a nice future deposit and travelling money. We returned to NZ after 2 years overseas and bought a place in Wellington (FYI – you get A LOT more for your money down here! If you don’t need to live in Auckland, consider moving out of it).
One piece of advice if you are considering buying a house that needs work – never underestimate how much rennovations are going to cost you! I’m all for buying property but look around. I can see you’ve probablly fallen in love with the removable house but it’s a huge market out there – find an area you like and talk to a real estate agent. Talk to the bank about how much you could borrow so you know what you can afford.
I’m not sure about you but I wouldn’t survive long at my parents…
Good luck!
I think I agree with the other two, buy a house. But don’t jump into it too quickly – look around and see what there is first. You may have to move in with your parents, but think of it as a short term solution! It sounds like you have the right idea though about putting it into a trust ect.
Good luck xx
Thanks for your responses girls!
Update; I have decided That I want a bigger deposit and if push comes to shove we will move into a cheaper house, hence saving more $ for a house. I went to a different bank to that one I am with for my normal a/cs and opened a savings a/c which starting at my first pay next year (we are starting a new company at work so all contracts are effectively new and I need the $$ between now and then for Thailand) I will put $100 a week away into it for a deposit for a house at some point over the next 2-3 years. If the b/f pisses me off I will move home as I never have any issues living at home with mum and dad, in fact I’d really like to go back for now a year or so but the b/f would not be keen at all.
Another update, i’m not sure what I want, but whats new!