SF's road to mortgage freedom!

teabody

slowlyfading wrote: »

Hmmm, well okay

My very long term aim (it's more like a dream, but if I write it down, it'll happen, right?) is to be retired by 50. That means free from the constraints of being employed by someone else because we need to steady income. This may mean ventures into other jobs, but if and when I want to, not because I need to.

Bizarre, I was having this conversation with my husband moments before I read this. I could have been the person writing it!!!
We were talking like this as we have 2 BTL's beside a residential property and have had an offer accepted on a third. I am apprehensive this time and was lecturing my husband about Greed as I believe we are doing ok and these are long term investments that will prove when the mortgages are paid in approx 25 years so have virtually no impact on us now(unless of course the rents are not paid:eek:) So a 4th property I think is enough and I was saying that having 4 properties can also be a big risk but the values are quite low and tbf our cash flow to do this will be depleted after a 4th. My thinking is that if we focus on what we have and pay off early then by my 50th birthday we will be mortgage free with income as well!!! Therefore opening our employments opportunities to more choice on our part and less about need and so on. My senses tell me that he would continue on a mission to increase the portfolio but I believe that we will be more than comfortable and that his attitude could actually hinder what we are trying to achieve! Life is too short! I do want to enjoy it more at some point!

edinburgher

My very long term aim (it's more like a dream, but if I write it down, it'll happen, right?) is to be retired by 50. That means free from the constraints of being employed by someone else because we need to steady income. This may mean ventures into other jobs, but if and when I want to, not because I need to.

That's my goal as well SF, let's not call it a dream or it's like it won't happen

gallygirl

Crikey SF, you've opened a can of worms now :T.

greent, Rich Dad Poor Dad was 1st, so read that one 1st, then Cashflow Quadrant which is also great (though there is repetition in both books, could have been 1/2 the size!). Haven't read the 3rd yet. The Millionaire Next Door is also very good, but a better read for anyone whose OH still wants the big house etc.

teabody, work out what your aim is, how much passive monthly income you need to fund it (e.g. if you want to work part time you'll need less than if you don't want to work at all) and then how many btl's you need to fund it after tax. Better to work backwards from that, which will give you an answer, rather than keep accumulating. Better to have some savings behind you rather than tie it ALL up in property (she says :whistle:)

slowlyfading

teabody - thanks for replying how has your experience been re: your two BTLs? Do you manage them yourselves or do you do it via an agency?

edinburger - okay, point made. We can do it!

GG - apparently so! I didn't realise so many people think about this kind of thing bit stupid really, on a money saving expert forum :rotfl:

slowlyfading

I'm feeling very :A this evening - I've not snacked at all day, I've been to the gym :eek: I've had a healthy stir fry for tea, and it's been a NSD to boot! :A:A

Not much else to report, I've moved over £4.13 to savings, as it was annoying me in the current account but obviously, amounts like that aren't going to get us anywhere fast.

Our car insurance is due next week, so DH is going to look through the comparison sites; we've had a renewal quote through the company we use now but it seems a lot, so hopefully we'll be able to get it cheaper somewhere else

Now, I need a cuppa

teabody

Thankyou GG! I appreciate your thoughts.....I think that 4 properties in total.....the 3 btl's is enough having calculated todays needs. Obviously, the financial value in income will be different in 10+ years but say the mortgages are clear and 3 are let then they will provide enough income for us to live job free if we were to live frugally. (fingers crossed) ....I shall assess as I go along.

Slowly Fading - No problem! I enjoy your updates! Our 1st Btl was our first house together. We bought it and lived in it for 9 years and when I wanted to move closer to my mom having had 2 children my OH didn't want to sell the house (and couldn't understand why I needed to move closer....we only lived 10 mins away!) so I found a way round it! So we rented our house out and bought one to live in. As it was our 1st we used an agent. This is our largest mortgage so tbh I am happy that we use one as we have a Rent Guarantee if the tenant does not pay. I have visited our tenant and the house is immaculate and we have had a troublesome 2 year let from her. Although we love this house so if she were to give notice we would probably move back!
The 2nd we bought cheap and renovated and managed to find a tenant that we manage ourselves. This one has been let for 12 months nearly and is not entirely hassle free but worth it for us. I have to say for the visits and letters etc that I have had to write and so on it pays us well and helps towards OP on our residential mortgage. It is a long term investment and I think that with the right purchase and calculations, in todays housing market, property is a sound choice over savings accounts.
Ok so I am a bit apprehensive on a 3rd but will be going for just one more. I think the apprehension is just the thought of the hard work of the actual purchase and any renovation!
All in all I am glad we did this but like I said previously there has to be a point at which we stop as it can be stressful just thinking about the responsibilty of it all despite the fact that we have had hardly any issues while we have been Landlords.

Sorry to go on.....I hope this helps!

edinburgher

It is a long term investment and I think that with the right purchase and calculations, in todays housing market, property is a sound choice over savings accounts.

That might be because a savings account isn't an investment?

Not starting an argument or being provocative for the sake of it, but it might be better to compare the relative benefits of BTL and another investment (say funds held in an ISA)? Savings accounts are risk free, using leverage to acquire investment properties can be very risky indeed!

I completely agree that if you do your sums and don't get greedy, BTL can be a good option for some. On the other hand, it can involve a lot of work if you want to maximise your profits and people get badly burned.

I've met people across the spectrum - from a couple who own 4 massive houses and successfully let out something like 30 individual bedrooms, to a girl who went bankrupt and has outstanding debts relating to 2 offplan flats she thought it might be clever to flip or rent out.

slowlyfading

Thanks for your quick reply! It sounds like it's worked out well for you so far The house we live in now isn't our "forever" home, so maybe we could potentially think about letting this out once we move, if we can afford to do so. I've been looking at properties around the area in a certain price bracket, but I'm not sure what income they would produce.

It's definitely food for thought though, so thanks for that

slowlyfading

edinburgher wrote: »

I've met people across the spectrum - from a couple who own 4 massive houses and successfully let out something like 30 individual bedrooms, to a girl who went bankrupt and has outstanding debts relating to 2 offplan flats she thought it might be clever to flip or rent out.

That is exactly what I'm worried about - the downside and potential uncertainty.

Hmm. It's not something we can do in the short term anyway, but it's something to think about.

Decisions, decisions!

edinburgher

Like anything else, I'm sure plenty can be done to minimise the risk and your common sense is probably your best ally

I do feel, however, that the British obsession with home ownership means that whenever anyone says 'investment', everyone thinks 'BTL'.

Plenty of choices out there, a mix of several would probably work best.