r2i forum

Hi,

We are currenly based in UK, (mrs and two girls 4 and 6). I have been in UK since 12 years but never felt at home here. I had some financial commitments until now which is reason why I couldnt bought property uptil now. Dont have enough cash in bank to retire(or semi retrie) in India (thats what I am aiming for).

I think I need good 3 to 5 years in order to get some funds so that I can buy house in India and semi retrie. My personal view is that its far better to live in small town in India with some investments and paid off house doing odd work then living in metro city working for MNC for 15-20 hours a day.

I think becouse kids are relatively young, it give me a 3-5 years before it becomes impossible for them to move. We are planning to have atleast one visit to India form now so that kids gets used to India.

Both me and mrs definaltly want to go back as we dont see future for us and kids here in UK for us. My question is, is it good idea to buy house for 3-5 years commitment? One argument is that I could save some on rent and one for against is to hassle of selling house (i.e. just easy to get out of rented accomodation), i.e. good idea in my sit. to just rent it out for next 3-5 years? Lifestyle wise at my age I would want to buy the house as I hate rented for this long and continue for next few years but dreading the idea about all the emotional and financial hassle of selling the property when leave the country.

If we buy house then one option is to put it on rent when move back to India. I am not looking to make money for rent but just so that someone else can pay for the mortgage. i.e. just an investment in UK.

PS. I am looking to buy at mid range of the market (i.e. not very cheap and not too expensive). Spent best part of my life living in small flat now want to live in reasonable good space.

Any thoughts?

Property prices in the U.K. just keep going up. So, the best bet probably would be to buy a place and not sell it in a hurry. Let it be an investment.

Better to pay your own mortgage than somebody else's and once you R2I, have somebody else pay yours.

Also, homes in the U.K. are like little rabbit holes and are becoming smaller every day. Please prepare yourself to be disappointed if it's space that you're after.

Financial side.

Plan for the agent's commission s as well as the registration charge. Must plan for some maintenance expenses, redecorating etc. Compare the rent you are paying now and the mortgage and insurance you would end up paying. The housing market has not been very active at times and some people have had to wait several months to get a reasonable buyer.

3-5 years is too short to predict reduction or rise in house price and it could even fall. Difference in standard of living (small flat v/s reasonable space) may be worth some that only you can decide.

[QUOTE]and some people have had to wait several months to get a reasonable buyer.

This is the bit that worries me.

[Quote] we buy house then one option is to put it on rent when move back to India.[/Quote]

You need to study how good is the rental market where you want to purchase your house in UK. Remember that if you buy for yourself now and rent it out later, then your mortgage needs to be converted to Buy to Let mortgage which usually means paying higher interest.

If the maths work out, then yes, please buy house in UK and rent it out once you move to India. If you decide later that you want to come back to UK again, then at least you have a place to stay (as per law you can give 2-months notice to your tenants asking them to leave).