Should I buy bigger and better?

Fraise

HitTheBeach wrote: »

I like the idea of enjoying some mortgage freedom but continuing to save for a year or so and then perhaps buying a new home outright.

Excellent advice. Many thanks.

It really depends on what you want for your future. You do sounds happy where you are, so even though it's isn't ideal for you, have you worked out what you could upgrade to by saving for a year whilst mortgage free? If your mortgage is very low then how much will you have after one year of saving what would have been those mortgage repayments?

If it comes to just a few thousand I don't think you'll be able to buy a bigger and better house outright, will you? Especially when you take into account solicitor fees. Estate agents, surveyors, removals etc....it adds up.

You could actually end up regretting it, and being worse off than you are now. On the other hand, you're still young, so upgrading to a nicer area would be good, but unless you've saved a LOT of money I can't see how you will buy a better place outright......

catshark88

Yay, a newbie landlord, actively wanting a passive approach, convinced they know everything and taking on a "get rich quick" model, just as interest rates are about to rise....

OP you may be able to buy a number of properties, but whether you will be able to run them properly, is a whole other question.

Fraise

HitTheBeach wrote: »

You may have noticed I've overpaid on my mortgage by 43k in 12 months. I clearly have the means to buy three properties up North TODAY!

10 properties isn't out of the question in 7 years at all. I appreciated your negative comments though you guys. Thanks.

If you can afford £43k a year mortgage repayments, which is over half the value of your house, why are you living in a place you freely admit is not particularly nice, is not a nice area, and is ex council? You could afford a much nicer house and a nicer lifestyle. Something doesn't add up.....

You then say you're looking forward to being mortgage free and enjoying the extra money you'll save, but that should be peanuts to you if your earnings are such that you can afford £43k a year on your mortgage, and that's without living expenses. I hope you're not a fantasist.

Davesnave

HitTheBeach wrote: »

So...little update.

I've decided to stay where I am but instead try to build a property portfolio.....

I would like to amass 10 properties by time my Daughter is 21. (7 years)

This is a bit of a turn-around in the space of a thread!

It is indeed possible to become and owner of multiple properties in a relatively short time by leveraging, but this would hardly make you mortgage-free.

Of course, being an entrepreneur of any sort is full of risk, but doing what you're talking about now just doesn't chime with the way this thread began.

Fraise

How can he amass 10 properties in 7 years? He won't own them, he will have 10 mortgages - and if he can't find tenants, or some stop paying their rent (which can happen) and he has the hassle of taking them to court to be evicted, how's he going to pay the mortgage?

He's living in a not very nice area, so I'd imagine there's social problems where he is, which means not many people can afford the sort of rents he will need to cover his mortgages. On top of that, if hous prices drop in his neck of the woods in 7 years, what's he going to do?

It's nice to be ambitious, but you need to be realistic. Maybe it's made him giddy to think he almost owns his house outright,, but he needs to remember that his house is cheap and in a not very nice area. There's people who own houses of half a million or more, and they don't all think they're going to become property magnates.

Mattygroves2

Fraise wrote: »

How can he amass 10 properties in 7 years? He won't own them, he will have 10 mortgages - and if he can't find tenants, or some stop paying their rent (which can happen) and he has the hassle of taking them to court to be evicted, how's he going to pay the mortgage?

He's living in a not very nice area, so I'd imagine there's social problems where he is, which means not many people can afford the sort of rents he will need to cover his mortgages. On top of that, if hous prices drop in his neck of the woods in 7 years, what's he going to do?

It's nice to be ambitious, but you need to be realistic. Maybe it's made him giddy to think he almost owns his house outright,, but he needs to remember that his house is cheap and in a not very nice area. There's people who own houses of half a million or more, and they don't all think they're going to become property magnates.

Think you are all being a bit harsh. Depending on where the OP lives if he can save £43k in a year then he could quite easily be able to buy a small property outright each year so very easy to accumulate 10 in 7 years with a bit of leverage. It would be possible within 20 miles of my location in the North. The return on such properties would be very good as well. So long as you are in it for the long run and as an income source capital value is irrelevant so long as the mortgages can be covered.

The OP also states that they understand there is a difference between passive income and being a passive landlord and they are experienced in running a business. I suspect the Queen and most of the landed gentry are perfectly good landlords despite making a very good passive income from their property portfolios.

The OP is in the income generating part of their life and they have the choice of borrowing to move house or borrowing to purchase an asset that will generate income in the future. If they are happy where they are then making the money work for them to generate income sounds sensible to me. Personally I'd make sure my rainy day funds, ISA contribution and ordinary pension contributions were sorted first but I wouldn't move house just to be in what would be perceived as a better area or bigger house if I happy where I was.

Fraise

Mattygroves2 wrote: »

Think you are all being a bit harsh. Depending on where the OP lives if he can save £43k in a year then he could quite easily be able to buy a small property outright each year so very easy to accumulate 10 in 7 years with a bit of leverage. It would be possible within 20 miles of my location in the North. The return on such properties would be very good as well. So long as you are in it for the long run and as an income source capital value is irrelevant so long as the mortgages can be covered.

The OP also states that they understand there is a difference between passive income and being a passive landlord and they are experienced in running a business. I suspect the Queen and most of the landed gentry are perfectly good landlords despite making a very good passive income from their property portfolios.

The OP is in the income generating part of their life and they have the choice of borrowing to move house or borrowing to purchase an asset that will generate income in the future. If they are happy where they are then making the money work for them to generate income sounds sensible to me. Personally I'd make sure my rainy day funds, ISA contribution and ordinary pension contributions were sorted first but I wouldn't move house just to be in what would be perceived as a better area or bigger house if I happy where I was.

It would have to be a very small and rundown property in a rough area if it only cost £43k.....


He's living in a dream world.

makeyourdaddyproud

Fraise wrote: »

It would have to be a very small and rundown property in a rough area if it only cost £43k.....


He's living in a dream world.

There are houses far cheaper than £43k in some "run down" areas.

HitTheBeach

Fraise wrote: »

If you can afford £43k a year mortgage repayments, which is over half the value of your house, why are you living in a place you freely admit is not particularly nice, is not a nice area, and is ex council? You could afford a much nicer house and a nicer lifestyle. Something doesn't add up.....

You then say you're looking forward to being mortgage free and enjoying the extra money you'll save, but that should be peanuts to you if your earnings are such that you can afford £43k a year on your mortgage, and that's without living expenses. I hope you're not a fantasist.

A fantasist. Wow.

I'm happy to meet you anywhere you like to prove my fanancial situation if you would like. I travel all over the Uk on a weekly basis. Jees!


I'm 35 years old. I'm a middle to high earner. My partner is a high earner. We are virtually mortgage free with zero other debt.
Why shouldn't I be thinking of building a property portfolio?

HitTheBeach

The business I built with my partner 3 years ago has made her/us high earners.
I am a risk taker and an entrepreneur. Deal with it.