Mortgage Free - so good they'll do it twice! Wynnvegas aiming for the big house

wynnvegas

Hi ATT,

Thanks for popping in. I've all but given up on posting from the phone or the ipad as it's a royal pain with all the helpful autocorrecting and such that they chuck in.

As it turns out, I was in Nuneaton, Maidenhead and Leicester over the last few days. Flew down and eventually drove back up in a newly acquired car that needed to come home. I'm contemplating swapping it for my current car as it's got a load more bells and whistles, including a bigger and better engine. Only downside is that it's an estate version which I've never been a fan of. May be worth it in the short term for the heated seats alone!

Everyone I've told thinks doohnibor is some sort of meaningful gaelic thing that is close to my heart and I've not had the inclination to tell them anything to the contrary so we'll let it lie and people will make of the name of it what they will. Looks like we've got 3 to see on Monday so that could well move things along at a rate.

I've never seen any of Pratchett's stuff. I'll need to have a wee look. Trouble is that I've got roughly 60 books upstairs to get my way through. Need to get my read on in the next few weeks and months. I'll sort out a wee pile to get my way through when in Vegas in the summer (although I need to sort myself some time to research and book that in the next few weeks as well).

First things first - off to sort my signature as I've just noticed an error!

Cheers,

Billy

wynnvegas

Evening All,


An eventful few days, so it has been! An emergency rush down to Birmingham and Derby on Wednesday (not like last week's BO easyjet debacle thankfully) and a plan to bump a couple of miscreants. Miscreants duly bumped on Thursday, I decided that, having been up at 5:30am, a 7 hour drive starting at 6:30pm wouldn't be the very thing, I popped up to Leicester for a shot of the gym and a decent nights sleep. Finally got back today at about 2, tidied up the outstanding emails from the last three days and very near sorted the viewings for 3 more places on Monday evening.

Plan for the weekend is to finish my expenses for November, get round 10 or so of the family to drop off presents, have a game of badminton (and maybe even get a game off Moyra this time!), sort out my paperwork (at least into day job and other expense piles), decide on which car I'm going to keep, finalise the viewings on the three houses for Monday and tidy up the two new start businesses, including the incorporation paperwork.

Hope everyone has a grand weekend.

Cheers,

Billy

Tilly_MFW_in_6_YRS

Hi Billy, just make sure you have your little list of jobs finished by 9am in the morning, now no slacking........

Have a good one Tilly

wynnvegas

Hi Tilly,

Breaking it down at the moment. Challenge accepted!

Cheers,

Billy

Tilly_MFW_in_6_YRS

Marvellous Billy.


Make sure you set your alarm call nice and early, but better put it under the pillow on vibrate perhaps, you don't want to be disturbing Moyra. She will be getting her shut eye and preparing to whip your 'something or other' at badminton.......

Night, Tilly

Froggy-G

How are you gonna cope with your own to do list + the one Moyra has prepared for you and will leave on the kitchen table ready for when you get up..

You have been slacking the last couple of days, she will make you pay for it!

wynnvegas

Evening All,

For anyone interested, there are a few surprises we've already spotted on the journey so far. I've always said that it will be a plenty open journey for others to learn from and we've already made a couple of costly mistakes. In general terms, I can now confidently say that people should not pay off their mortgage! I realise that the statement is something of an antithesis to the purpose of this board but I caveat it with the £800 lesson I've just been served. If you have the option to leave your mortgage sitting at a nominal amount, absolutely do it. It's wonderful to completely own the property to be sure but it turns out that someone will smack you for it on your credit worthiness, deed and property charge fees or indeed, most recently, the fact that it costs more to remortgage an unencumbered property than a normal remortgage.

The best advice we've had thus far are the following:

Rule 1: BTL properties must be bought with a discount to the current value to make it worthwhile in the medium term
Rule 2: A BTL project should be set up and administered as a business (for the tax breaks alone)

The costs we've identified so far are as below:

Initial, on-off costs:

Deposit to achieve 60% LTV: c.20% of property value
Booking Fee: Typically £199
Arrangement Fee: Typically £999 (although waived in some occasions)
Rearrangement Fee: Typically £199 (for the six months refinancing to 75% strategy)
Conveyancing Fee: Typically c.£600
Registration Dues Disposition: £120
Registration Dues Standard Security: c.£60
Transfer Fee: £35
Intermediary Fee: c.£250 (although avoidable obviously but we'll grin and bear it for the first few at least)
Survey: c.£299
Stamp Duty: £0 for us as we're buying well under the wire
Property Sourcer Fees: Anything up to £2,500 (although the first one was built into the seller's costs happily)
Initial upgrades / fixes to get it "tenant ready" (said in a wee Scottish, "Gladiators" style): We've budgeted £2,500 for this but the first one will likely only run us £1,000

Annual Costs (estimated)

Marketing and letting: £150
Inventory: £90
Gas Safety Certificate: £60
Electrical Safety Certificate: £60
Energy Performance Certificate: £80
Lease Agreement: £50
Upgrades / Fixes: £1,200


Monthly / ongoing costs:

Property Management Fees (10% of rent) - optional obviously but quite important to us at the early stages
Mortgage: Interest only (284.17 for the first one)
Buildings Insurance / Contents Insurance / Public Liability Insurance / Rental Insurance / Emergeny Repair Insurance: Roughly £50p/m and it will hopefully come down with a bit of volume

Even with all that, we should cashflow something around £200 p/m per property if we do it right and get folk in right away with minimal property vacancy

Thankfully all of this seems to be tax deductable so we'll be able to collect an income from each for quite a while (est. 3 yrs) without being liable for any tax at all. With that money, we'll start putting together a fund, alongside some of our own money, which will sit in a safe investment place gathering appropriate interest and the like until we fancy paying off the houses at any point.

Cheers

Billy

Peonie

I don't know about your other costs but when we moved house our Energy Performance Certificate cost £45; you might be able to get it a bit cheaper after a couple of phone calls.

wynnvegas

Thanks Peonie,

I've just found them for £34 a pop! Thank you very much. That will teach me to just take things at face value!! I'm away to have a look at the other things on the list now as well!

Cheers,

Billy

gallygirl

Do you actually need an EPC? I don't have any for mine and tbh I don't think my tenants would have a clue what one was.

I hope suitable progress is being made on the lists

Re doohnibor - it does sound gaelic, doesn't it :rotfl:. Looks like someone else thought of it FIRST