Although quite obvious when buying any type of property, it’s vital to be crystal clear on how much money you can afford to put towards it. When working out the budget it’s essential to review all of your monthly outgoings such as gym membership, phone bills, any subscriptions you currently have, whilst also including any regular payments you make in cash.
Property improvement calculations
Once you have a figure you feel you can comfortably put towards buying a property, your next step should be to then calculate how much of that should be allocated to the renovations once it’s yours. This isn’t necessarily essential when buying a regular property, however, repossessions are often sold how they are left. It’s fairly unlikely that those who could unfortunately not keep up with mortgage payments would have renovated or even decorated a property that they were aware they could be losing. Besides from general mess or wear and tear, there’s a chance you may have to pay out thousands to get the property in good condition, whether you’re renting It out, selling It on, or living there yourself.
For those first time buyers who have calculated a figure they currently have available, it’s then wise to decide how much under that you should put towards both the property and renovations combined. Despite having full confidence that the purchase will be a successful investment, the risk is too high to bid on a property you can only ‘just about’ afford. This is especially relevant if you are bidding on repossessions, an area were ‘Buyer Beware’ is emphasised.
For help working out your budget check out the budget tool from citizenadvice.org for free – Work out your budget
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