Thursday, Aug 03, 2006

Dodgy shortcuts first time buyers should avoid

MoneyWeek: Dodgy shortcuts first time buyers should avoid

First-time homebuyers have never had it so tough, and they are resorting to bolder schemes to get one foot on a rung of the ever-ascending property ladder. Two-fifths of them are holding down two jobs, says Bradford & Bingley building society, 42% are receiving help from their parents to buy their first property and 43% have even thought about giving up buying altogether. So it comes as little surprise that nearly half of 18 to 29-year-olds surveyed in a recent YouGov poll plan on buying abroad. But is this really a sure-fire way of getting something of value to your name? (This article was formerly subscriber-only but is now free).

Posted by mary @ 09:41 AM (490 views)
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1. Twatmangle said...

I recently bought an apartment in Romania (Constanta). Although it was a bargain, and labour was dirt cheap, there were a number of things that were of interest. These might help if you decide to go down this route.

1. In Romania if you sell a house less than 3 years after you bought it, you are liable to 16% tax on any profit. This may change next year.
2. Many Romanians will try and rip you off without hesitation. For example we were closse to purchasing a property and by chance, heard anecdotal evidence that there was a problem with the plumbing. Closer inspection revealed a lot of problems. You simply don't have all of the surveyor's reports that are required here. Upon asking if the was a way I could find out if the property was structurally sound, I got a serious reply of 'yes it's fine, it survived the '77 eathquake'.
3. Labour is dirt cheap. We had a man for a month who gutted and refitted the whole apartment (new flooring, kitchen and bathroom, painting all rooms and double glazing installed) for less than 1000, labour and materials.
4. Romania is a bureaucratic nightmare. Get piece of paper, queue, have it stamped. Move to place B, queue have it stamped, move to place C etc... This is where you will not be able to do it without help. Either pay a firm to do this for you or you'll need local knowledge.
5. Don't believe the hype about rocketing house prices - I have no idea what will happen. My investment is for different reasons, but modest gains might be possible as well as a modest rental income. I opened mine up for tenants (yes sorry, I am a BTL in theory) and am getting an 8% return.

Please email me if you want further information, I might be able to help.

Mr Mangle.

Thursday, August 3, 2006 11:19AM Report Comment

2. uncle chris said...

Brave man TM .... I hear that half of Romaina are planning to make their way over here next year. Will there be anyone left to rent your apartment? It's strange to think that 15(?) years ago these countries were behind the Iron Curtain ..... how things can change quickly ..... and that's probably one of the reasons I'm reluctant to buy abroad where I feel I would have little control if things went to pot. I'm thinking along the lines of the 'Spanish Land Grab' laws.

Thursday, August 3, 2006 03:50PM Report Comment

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