Should I buy a house.?

Question

Ok - so my boyfriend works in Edinburgh, I work in Glasgow. We live (together) in Glasgow. The two cities are about 50 miles apart - it takes him about an hour to commute (an hour and a half door to door) each way. Not ideal.

SHould we buy somewhere for a year half way? While on paper this sounds ideal, we will actually spend £1200 ( about $2400) a year MORE if we both need to commute. Not to mention the legal fees, survey, building insurance etc etc.

He wants to work in Glasgow, because I am tied here for the next 2 and a half years...which is why we are only wanting to move for a year.

It's likely that the house we buy will increase by £6000 - £8000 over the next year (but of course we can't be sure - just guessing due to past performance...risky I know).

My question - would we actually make anything? What happens when you sell a house? HOw much does that cost? I can't find any info on that....

Not to be too prickly, but Edinburgh is the capital of SCOTLAND. Glasgow is the largest city in Scotland. Which is an entirely different country than ENGLAND - who's capital is London.

Answer 1

Google for financial calculators. Here is a site that has some I've used before.
http://www.mackenziefinancial.com

Often they help you calculate if purchasing a property is better than renting. Believe it or not, if your rent is low, but house prices are high, it can be better to rent in the long run, than to purchase.

Good Luck.

Answer 2

Simple answer: Do not buy in the middle if you really expect to be in Glasgow in 18 months.

Here is why.

There are some serious transaction costs when you buy or sell. These are real expenses that you do not get back. There is also the hassle of moving.

For you to come out ahead financially you would need to have the home your purchase rise in value significantly to make up for the expenses.

Alternatives and 1 reason to ignore the advice above.

The problem seems to be a commute issue. Have your boyfriend look for a new job sooner. That will solve the problem without needing to buy a place in the middle.

Or reverse the commute by moving to Edinburgh and you do the commuting. There is a train line between the two. Move close to the train station if that works.

Consider renting in the middle and use the money you save from not buying to cover your commute costs. Not a great idea but something to be considered.

Buy in Glasglow now and at least deal with the desire to buy independently of the commute issue. You might find a nice place that make the commute easier (side of the G that is closer to the road to E). Or you can find a place that makes the commute easier for him and which is on a train of bus line for you.

In reality there are two issues. One is the fact that you live together but work in different cities. If Glasglow is the long term goal then accelerate his job change or rethink the relative location of the home compared to the two other destinations.

The second issue is buying vs. renting. Renting is generally best when the need is short term. Unless you can own for 3-5 years it is hard to come out a head financially. There are too many transaction costs to deal with if the market is not rising quickly. To assume that the Scotland housing market will continue to rise quickly is risky.

There is one other option that puts a different spin on this. You could find a property that is run down and needs a face lift. A place that you can live in but which does need a lot of work. Such a property is one where you can buy and then resell in a year and come out ahead if you make the right improvements.

It is definitely a project and can be the source of strong family conflict if you are living in a work zone. Not for all and maybe commuting is the better option in the short term. Avoid commuting and then coming home to a project.

Answer 3

No matter where you are in this wonderful world real estate is a long term matter. The costs to buy and the costs to sell are too high to make it worth doing more often than at a minumum once every 2 yrs and even that is not ideal.

Work out something where you both can commute the least. Since he' got the long one currently. And you will move to him in a couple of years, then just work out for this interim what is most fair for both of you.

God bless!

Answer 4

I believe real estate is still a good investment. Not like rent, where you only get receipts in the end. If you can afford the house, then go for it, but be prepared if it takes time to sell it. I'm not sure what the tax situation is in England, but in America you can write off the interest you pay on your mortgage and if you sell it, you can up to a certain amount of money without paying any taxes.

Answer 5

i am from the US. if i bought a $100,000.00 home here the typical closing cost to secure the loan would be between $1500.00 and $2000.00 approximately. then when i went to sell the house using a real estate agent with average commission of 6% and the house appreciated 5% in one year i would sell it for $105,000.00 and i would pay a commission of $6300.00. so you have that expense, plus moving expenses and misc.. so you have to decide if the house will appreciate enough to make it worth it. good luck.