Author Topic: buy house now on the cheap? but not be living in it  (Read 2147 times)

mohawkbrah

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buy house now on the cheap? but not be living in it
« on: May 02, 2015, 10:01:28 AM »
so the plan is to retire in Hungary, i've been eyeing up a small wine cottage with an acre of land which is £3500. bit of a fixer upper but the house can always be renovated later on down the road as i wouldn't be living there at the moment as im in my capital accumulation phase for FIRE. I only think of buying it outright now because i feel property prices will always be on an uptrend even in poorer countries, and the land alone is worth the price tag to me since 1 acre of land goes for £10k in merry old expensive england.

buying it now would help me feel a bit secure in the future knowing that I've got one part of my plan sorted.

but the con is the council tax( annual property tax) it's only about 60 Euro's a year but not very smart in the frugal department.

i could try and rent it out as a holiday home but im not expecting any positive outcome on that approach

what would you do in my position?.
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daverobev

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Re: buy house now on the cheap? but not be living in it
« Reply #1 on: May 02, 2015, 05:06:48 PM »
Biggest question for me would be how much do you know about the political system in Hungary, how much time have you spent there, do you speak the language and so on.

I'd love to live in Portugal or Spain for the warm winters. I've been to Budapest once.. pretty cool. I liked it.

For three and a half grand, you don't have much to lose, honestly. Except headaches with ownership. If you think Hungary's going to do ok over the next few years, why not find a Hungary-specific ETF to invest that money into, instead?
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totony

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Re: buy house now on the cheap? but not be living in it
« Reply #2 on: January 22, 2016, 09:48:52 AM »
I just bought an appartment in Budapest to put it in Rental.
I might also retire in Hungary.
However, my situation is a bit different as my partner is Hungarian and I study the language. Budapest is very international, but obviously more expensive than the rest of Hungary.
Let me know if you want to discuss your plans in more details, we can share info.

Be aware that the banking system is very different than in the rest of Europe and in the US. Over there, just holding and using an account to pay your bills and taxes will cost you probably more than 60 pounds a year.

Bearded Man

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Re: buy house now on the cheap? but not be living in it
« Reply #3 on: January 22, 2016, 10:24:23 AM »
I've been in this boat recently with cheap property in the US that I didn't intend to live in yet. I'm my case I'm somewhat glad I decided against it because I wouldn't have the funds to buy the new house I'm buying now, however; in your case for the 3.5K, I'd say that is worth the risk IF you have been there and are comfortable with things there.

I will further add that the place I passed on is still there, just not on the market. I'm sure the seller will sell if I contact her again. For 23K, if it's available later this year, I'll probably buy it.

former player

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Re: buy house now on the cheap? but not be living in it
« Reply #4 on: January 22, 2016, 11:53:31 AM »
I wouldn't want to leave property empty for any length of time, which it sounds as though you would be intending.  Land will survive neglect, as long as no-one else claims it through abandonment and you are prepared to deal with a scrubby mess when you want to use it, but houses need to be lived in, regularly inspected, and maintained.
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norabird

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Re: buy house now on the cheap? but not be living in it
« Reply #5 on: January 27, 2016, 12:26:50 PM »
I'd say buy and rent it out if you can.

zoltani

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Re: buy house now on the cheap? but not be living in it
« Reply #6 on: January 27, 2016, 01:58:55 PM »
I lived in Hungary for a year. Personally I would not move to the countryside unless I spoke Hungarian, or at the very least German. Hungarian is a PITA to learn, how good are you with languages?

1 acre of land in England is 10k? That is cheap compared to my local area!
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zephyr911

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Re: buy house now on the cheap? but not be living in it
« Reply #7 on: January 28, 2016, 09:27:44 AM »
Where in England? I can't even really find that in Alabama... I mean, in bumfuck nowhere, yeah, but not with services nearby.
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former player

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Re: buy house now on the cheap? but not be living in it
« Reply #8 on: January 29, 2016, 09:49:34 AM »
£10k per acre is an average price for agricultural land in the UK, with no rights to build so much as a hut or graze horses (horses for sport or recreation are not agricultural).  Land with rights to build is a different matter altogether.
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SassyG

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Re: buy house now on the cheap? but not be living in it
« Reply #9 on: February 04, 2016, 09:53:21 PM »
This is a no-brainer. Definitely buy!! No question, it is part of your FIRE saving, especially if you can envision retiring there. Even if you don't rent it out, at that price, it's worth it just for the eventual appreciation and living value. But it's better if you can have renters, just so someone is there looking after it, and the squatters don't settle in. If you do rent, make sure you have someone local who can manage it for you - those guys are worth their %!

60e/yr in council tax is not bad. Glad you're thinking things through, but this is actually not so much in the long run.

I did a similar thing about 10 years ago, but didn't get quite such a low price. I plan on retiring in Switzerland, and found a place there that I love, at a reasonable price. It's been rented out consistently ever since, through a great manager (10% fee), and has been totally paying for itself. Values have almost tripled in that area since I bought, so just from a pure investment standpoint it's been worth it. And by the time I'm ready to move there, it will be paid for!

So.... Think of it as a "dirt bank" for your retirement. Not sure your citizenship/tax residency (UK??) but in the US this is a retirement investment you don't have to declare it on your US taxes, so its value will accrue without taxation, just like a 401k/IRA. And then it's paid for once you are ready to live there! What's the value (to YOU) of a home with no mortgage, where you want to live in your retirement? To me, it's HUGE.

Just IMHO... :-)
« Last Edit: February 04, 2016, 09:58:00 PM by SassyG »

cerat0n1a

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Re: buy house now on the cheap? but not be living in it
« Reply #10 on: February 05, 2016, 03:57:35 AM »
so the plan is to retire in Hungary, i've been eyeing up a small wine cottage with an acre of land which is £3500. bit of a fixer upper but the house can always be renovated later on down the road as i wouldn't be living there at the moment as im in my capital accumulation phase for FIRE. I only think of buying it outright now because i feel property prices will always be on an uptrend even in poorer countries, and the land alone is worth the price tag to me since 1 acre of land goes for £10k in merry old expensive england.

It's £10k per acre for farmland with no prospect of doing anything with it except agriculture. More like £30k+ for something that could be paddocks for horses, and even forest/woodland is more in most of England. It's massively more than that for anything where you could ever hope to live, as I'm sure you know.

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but the con is the council tax( annual property tax) it's only about 60 Euro's a year but not very smart in the frugal department.

I would say the main con (as others have said) is that you cannot simply buy a house and leave it. Ideally, you'd have found some neighbours who'd keep an eye on it and you'd be making at least a couple of visits per year. Also don't underestimate the bureaucracy involved - you'll need a Hungarian speaker to help you.

I'd want to spend some time in the area and get a feel for it before committing - and maybe speak to other British people who've done the same. Things you might take granted might not be so - do your acres of land have water, for example - not something you're worry about in the UK.

(Slightly O/T - friends bought a finca in Galicia - run down farmhouse with a few acres. They're IT contractors, do a few months work, then a few months in Spain doing the place up, then back to UK for more money. When they first went there, they were looking to pay a local to come and cut grass, hedges etc. while they were away. They arrived to find a local busily moving his donkeys out of their garden. He'd been using the empty property for years.  Both parties were delighted to strike a deal - he continued to use their fields for grazing the donkeys, for free, in return for keeping the place from reverting to scrub.)