Purchasing a flat/"apartment"

Long term, is this seen as a giant waste of time?

I'm about to deploy and plan on saving everything from the tour as a deposit, as well as selling my expensive car on my return and using another 10k of that towards a deposit as well. I'm from a town in the South West where the property prices are pretty high, and like the look of a 140k two bedroom "apartment" (how pretentious does that sound? :D ); I'm sure it won't be on the market by the time I return, but in general is a flat/apartment a bit of a waste of time? Or a decent stepping stone towards a house?

I'm 28 and single by choice 8) , but don't plan on being a bachelor forever

As you can probably tell from my cluelessness, I've never purchased property before
Better buying now than being homeless when you leave.
All depends on what you want out of the property.
In 5 years will you need a bigger place?
Do you need to be in that location?
Will the price drop once you have bought it?
Will it be easy to sell later?
Sell your car before you go! No good having it laid up as it'll depreciate over the six months.
Go to auctions specifically selling repossesion properties.

There's no better feeling than bagging a bargain priced 5 bedroom detached pad, especially when the previous owners are there too sobbing into their hands.

Poor people deserve poverty.
Flog the motor, buy the flat, put a handyman friend in for six months who can shape it how you want in lieu of reduced rent.

On your return, you have a little palace ready.

When you eventually get wed, move in with her and rent your flat out properly, to proper tenants paying full whack. Or, go into joint ownership of a house with her and put the flat rent toward the mortgage. It'll just keep on giving and giving.


Book Reviewer
The property market is not a short term gamble (any more). So take the long view (5-10 years minimum) and decide what's the best return for your money.

The market is weak at the moment and "wise" people are avoiding it. Great time for bargains.

Property has, over the long term, risen, on average, by approximately 7% per year. And it compounds.

Do the sums: 20% deposit (£28k), mortgage covered by tenants (I assume), 5 years in, you're over £50k up (at 7%). Show me a way to make over £50k from £28k in that time and I'll suggest investing there.

Of course it's not guaranteed, it might not be 7% but it's the rest of the value that's providing leverage from which to profit.
There is some great advice on here, definitely sell the car and invest in property and Udipur is spot on, property is a long term investment. Any property is a good stepping stone to your ideal property, so often we find that people want it all now and when they can’t afford it, they think waiting is the answer, which is crazy logic. When looking at flats grill the estate agent before making any commitment to the property, you don’t want your expensive solicitor finding out show stopper information, that you can find out yourself. Here is the flat checklist:

  • If it is in a block, are there empty or unsold units, you don’t want to end up surrounded by empty flats.

  • Ask the agents if the block is mainly owner occupiers or are there a lot that have been let out (ideally you want to be surrounded by owner occupiers)

  • How long is left on the lease, most lenders require at least 60 years. This may sound like a lot, but if you consider that the mortgage is likely to be around 20 years, they want to be sure that you still have a saleable property up to the end of the mortgage. It can cost thousands to renew a lease! We can go on about lease length, but if you look for a minimum lease of 80 years, you should be ok for both your occupancy and future resale.

  • Find out how much the ground rent (rent paid for the lease) and service charges are(to cover maintenance of the building and associated land as a whole and buildings insurance), the closer to London you are, the more these cost. Bare in mind these can add a substantial amount on top of your mortgage each month to pay out, you need to be sure these are affordable. Similarly if they are very cheap, you have to question who is going to maintain the property. You will own the flat, but someone has to take responsibility for the fabric of the building and if they are not taking enough money off the flat owners each month, you can guarantee the work to the buildings is going to be minimal, if they do anything at all.

  • Is there a maintenance company in place to manage the building? If the owners are managing the building themselves it can be quite difficult to come to decisions about how money is going to be spent, this is not ideal. If there is nothing in place, don’t touch it with a barge pole, the building will eventually fall into severe disrepair.

Do not be fobbed off by agents who either can’t be bothered to find out this information or who likely know it and just don’t want to lose a potential sale. Most people go into these purchases blind, only to find out that they don’t want to proceed once they have incurred hundreds of pounds in costs.

Statistically the best time to buy a property is 4 years after a crash, the boffins firmly believe that people will look back on 2011 and realise that this was the year to buy. We are definitely seeing some strong signs that vendors are feeling more confident and are happy to wait it out, now that they can see light at the end of the tunnel, but buying competition is still thin on the ground, so negotiate hard. Check out previous sold prices to get an idea of where you should be coming in with your offer and make sure you have your mortgage lined up and solicitor, so you are ready to go once you have an offer accepted.

This list is by no means exhaustive, but it will significantly increase your chances of a successful purchase.
Personally, I wouldn't touch an apartment, I've got a nasty feeling that they will be difficult to sell in the future, they've been built in huge numbers in the past few years, usually with no corners left uncut.

They always seem to have the cheapest crappiest boilers, the construction will make improvements or alterations almost impossible in the future and as previously mentioned, service charges etc. make you feel it's never your property.

If you can guess which run- down area is ripe to become "gentrified" in the future, a modest house would be a much better bet.
Plenty of decent advice on here already but I'll add my tupence worth. I bought an apartment in Colchester when I returned from herrick last year and now let it out. Having owned it a year and a bit now there have certainly been some ups and downs. I was one of those affected by the whole Blue Forces saga (see other threads in this forum section), however in the long run I'd like to think I've still made a decent choice.

The rent I recieve covers the mortgage and so the only costs to me each year are the service charge and maint fees (plus the odd thing like gas safety certificates etc). I'm hoping to put the rent up shortly to try and cover these a bit more. However, if I rent it out for the life of the mortgage then I will have essentially spent very little of my own money and gained an entire paid-for apartment. So I would say that if you can afford to do it then yes you should buy.

However your situation may be different. I bought mine purely as an investment. I don't plan on living in it any time soon, nor do I plan on selling it to buy my own place to live in, certainly not as long as I can get army accomodation on the cheap anyway. Perhaps if I left the forces then I'd have to reconsider.

Whether it is the right time to buy is the million dollar question. In short, nobody knows. Many will give an opinion, often with a vested interest (estate agents being the obvious culpits - its always a great time to buy in their eyes!). Some doom mongers will tell you that we face an iminent crash in prices. I'm not so sure, but prices certainly don't seem to be rising in the way they were 10 years ago. So if you are relying on capital appriciation then I'd think hard before committing. Also you need to think about mortgage rates. At the moment they are pretty low as the base rate of interest is also low. However in a few years time you may find rates going up a few percent. This may not sound much but could turn mortgage repayments from £500 a month to 800+ very easily. So consider whether you can afford these rises.

Anyway hopefully that has given you a few things to think about. To summarise from my view - go for it if you can afford it and are willing to keep the place for the medium to long term.

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