Help,location location but want to be mortgage free!!!

elle37

Lord_Baltimore wrote: »

Don't underestimate the health benefit of being mortgage free! My first step in your circumstances would be to move to freehold; leasehold is archaic and feudal.

You certainly don't want an even bigger millstone around your neck.

Thank you totally agree re leasehold, I want to get out as soon as possible!! yes agree re health benefits,which is my main driver behind wanting to be mortgage free. I'm going to have to compromise in some way, agree with other posters 'meh' areas but perhaps I need to look more at the type and size of property, It's not like I need a mansion! There must be a way

elle37

bluesnake wrote: »

CobaltBlue, No, I'm definitely the minority here

elle37, just for thought, serious consideration, and to shake the tree a bit :eek:

Option 4) Take out as much equity from house1, use it as a deposit for house2. Live in house2 and rent house1.

Option 5) find a deposit for house2 buy it and rent it out, while making do with house1 for a number of years.

Option 6) If you can take out lots of equity, find deposits for house2 and house3, buy them and rent them out, while making do with house1 (or swap houses, but there may be tax implications) for a number of years.

Option 7) son is going to uni for 3 years. buy a house in the uni town. It gives your son free rent for 2+ years, mortgage is paid by mates renting other rooms. You save all his rent, gain a property which is also being paid off for at least 2 years and still make make a few quid extra. Not a case of making much, but rather losing less. Providing stamp, agent, solicitor and other fees are greater than his rental and the potential increase or loss over two years. Plus he is going to do it up and decorate while he is there

Option 8) start a small business from home - often much more effort than the other options.

There is option 9) which involves your son not being able to get a job because he qualified in Geography or Philosophy, or Archaeology, Paleontology, Anthropology and there are a whole load of useless qualifications out there, or bind people to dead end jobs. The gist is buy a shell in a great location and get and help your son to fix it up, over 3 years and sell.

option 6), then option 5) are my choices.
Because you want to live mortgage free, often the only easy way to realistically gain money in real terms is buy house2 (and house3 house4...), then sell in 25 years time which will give you a huge nestegg.

If you are mortgage free and have no burdens, although it is mentally fulfilling, your savings will keep loosing real value every year, and usually makes a slave to McJob, have to work to pay bills, food, clothes, no time for anything, and you may not be able to even help your son get onto the market either.

Within 10 years it could well be possible depending on location, to say 'F..k McJob' and live off house2 (and hopefully3 and 4....) earnings, giving even greater freedom. At the end, sell all, or keep one, or move somewhere sunny and have a mega income , and you may find they have all tripled in price. All about extra revenue streams.

Why all this? Well if it hard to do now, it will definitely get even harder as one gets older. 37 still offers loads of opportunities, at 57 many are gone and choices are limited. Yes, it is about quality of life, a bit like the child experiment "instant gratification test" https://www.youtube.com/watch?v=Yo4WF3cSd9Q, "have one sweet now, or wait and get two", just we have a longer time period and with limitations one has to choose, quality today, with an uncertain tomorrow; or a prudent but uncertain today, time to make it go right even if it goes a bit off, and a quality tomorrow. All encapsulated on TV in "Britains Spending Secrets – Episode 2" or the more adult version of "instant gratification test" https://www.youtube.com/watch?v=voF8B-Jr0mA

Option 2) This is my favorite of your choices, but not the one I would make:D

Ok Bluesnake, you're upping the stakes here, lots of food for thought- I like it, will have a good look your option when I leave McJob today :beer:

onlyroz

If your son is moving out can you downsize? Or do you still need/want to keep a room available for him?

ed110220

Bit of a piece of string question. What is a less desirable area? Somewhere you're uneasy about going out after dark, rubbish left out at all times, people playing loud music at any time of day or night... Or somewhere that is just less desirable because it was built by the council decades ago?

Just because an area is regarded as less desirable doesn't mean it can't be an pleasant place to live and vice versa.

We rented a flat in a 'more desirable' area and maybe it was desirable from the point of view of speculation but it wasn't a pleasant place to live. Almost all short term tenants, students etc, much rubbish and noise, very little parking, no space etc.

Then bought a house in 'less desirable' area with nice long-term neighbours where it's quiet, have a garden, parking etc.

Many people would probably just see the names of the two areas and see one as good and the other as bad though.

bluesnake

CobaltBlue, for me a BTL landlord, involves less hassle than "McJob", less stress than McJob.

I charged my Tenant a fairly high fee to start with a fair number of years ago. They are really nice people. Their rent has not changed since then and now it is a below market average. While not being very MSE, there are only so many burgers one can eat, and you can only wear one pair of shoes at a time

So I am not really in it for the rent either, asset growth is my aim, but extra money is welcome . Hopefully I can afford to retire one day, rather than at 67 and move away from my ex-council flat.

I once had a choice to whether to pay my flat off early, or use the money and do the BLT thing. I did the BLT thing and have no regrets and I see my mortgage as a cheap loan rather than a burden. To be honest even if you are mortgage free there are still loads of payments you cannot escape, so you are never really self sufficient or reliant, you always will owe - that is my personal view though

**************
CobaltBlue, I'm a novice at this, so take ally my ideas as a rough guide
"I know quite a few people who do this when their offspring go to uni - but is there any reason why it couldn't work the same for grown up children starting work instead...?"
It is called HMO for the Adult market. The student one is also called HMO, same thing - your not ageist are you?:). Not sure which one delivers more income and think the student one is easier and better and riskier.

The good bit: Students are often more forgiving. May need some looking after (did you ever hear the one about a guy whom had a masters in Architecture, and could not find a fuse box, then did not know how fuses work - true story) and around a lot more. Enter all together. You know when they start and you know when they end. You make them pay for a year, but often the year is around 10-ish months, doe maintenance schedule every year. Some pay yearly in advance, others 6 months in advance, some 4 payments a year, then there is the holding deposit. AST makes all students liable for debt, and they have guarantors too.

The bad bit: University moves, or changes campus use. The university builds accommodation for 5000 students next year

Obviously a top student gaff at top price requires decent fixtures and fittings etc.

I looked into a Georgian style 6 bedroomed housing in Nottingham, over a decade ago. The price was £185K. It did not meet newly formed hmo standards for that town as in then every room had to have its own washbasin? On phoning the university asking about the property got delivered the bombshell of that 5000 student units were being built on campus and will be finished soon

bluesnake

ed110220, I live in a less desirable area. Most people's would aspire to live in Buckingham Palace, rather than a cardboard box. The Palace is more desirable - to me anyway, especially in winter.

The property game is not about you, it is about other people. When one sees a council block people think about crime, jobless, unmonitored care in the community, asbo, and you won't make it alive home alive once the sun goes down. If you bring a girl home she is worried that someone will break down the door with a chain saw and run riot. Screaming people at 2am shouting 'He is going to kill me' every night. A friend whom lived in zone 1 in an ex-council house worth 550k, and he drove a porshe convertible and all was going well, but when he parked up, the words were 'what you live around here!', and she did a runner, would not even enter the front garden gate. Women often need to feel safe, men just need a bed.

Propertywise: poor design uninspiring, bland, functional building that is poorly maintained, thin walls.

The lowest rung does not say you are up and coming, or you have arrived, but imparts you are struggling.

However a cheaper property can give you a better lifestyle, low cost, to the point I now use no central heating. The heat rises from the flat below in winter and on really cold days (about 5 last winter) turned on a fan heater. A cheap property allowed me to live cheaper. There are similar 2 bedroom properties 200m away but with tiny narrow rooms near a busy junction selling for 70K+ more and their maintenance charge 2 years ago was £160 p/m - the price of keeping up with the Joneses.

elle37

ed110220 wrote: »

Bit of a piece of string question. What is a less desirable area? Somewhere you're uneasy about going out after dark, rubbish left out at all times, people playing loud music at any time of day or night... Or somewhere that is just less desirable because it was built by the council decades ago?

Just because an area is regarded as less desirable doesn't mean it can't be an pleasant place to live and vice versa.

We rented a flat in a 'more desirable' area and maybe it was desirable from the point of view of speculation but it wasn't a pleasant place to live. Almost all short term tenants, students etc, much rubbish and noise, very little parking, no space etc.

Then bought a house in 'less desirable' area with nice long-term neighbours where it's quiet, have a garden, parking etc.

Many people would probably just see the names of the two areas and see one as good and the other as bad though.

hear what your saying but for me it is not about what others view as most desirable, it's more about whether i'd feel comfortable coming home after a night out on public transport and walking to my door, whether it's clean,good transport links e.g regular buses/trains, decent shops etc. I've lived in quite a few areas in London and had both good and bad experiences.

elle37

Lots of food for thought if i'd have known how helpful these forum are i'd have done this a while ago.

This has helped me to clarify what is most important and what is realistic for me.

1)Yes want to be mortgage free but i think i need to break that goal into chuncks. The health benefits are important to me in terms of financial stress, i need to compromise somewhere

2)I had wanted to be a landlady at one point before illness but I don't think it's right for me at this time, also

3)keeping my leasehold means time ticking on the length of the lease, granted it's at 95 years at this point. Yes could extend but that's more money for something that's not mine

4)need to feel safe in the area i move and i can say having started this thread i'm convinced that the two less desirable areas do not fill me with the safe vibe as much as the other areas. Desirable to me is safety, cleanliness, transport.

I think my son has inherited my control freakishness so living in a property with other students that's his mums would drive him crazy !! We don't know whether he will get an offer in or out of London the preference is out of London so he can be away from home, he'll want to visit so i'd want somewhere he can have his own room. He's studying pure Maths so with any luck he'll get a decent job and not need to move back!

5) currently live in a 3 bed maisonette with 2 reception rooms, don't need that much space when he has gone ( gosh this is making me feel sad now!)- could look at smaller property in desirable area

Bluesnake option 9 is what i've (kind of) done in the current property, my son is now a dab hand at most jobs as i've forced him to take part every holiday, this may be a good option considering Lord Balitimors reminder that rates are due to change, I have been keeping my eye on the situation in China and i don't think this will impact on the Bank of England plan.

6) could look at desirable area, property to do up over a few years, may give me something positive to focus on.

Lord Balitomore, I get what your saying slow and steady basically, which is good advice.

7) need to think about stress testing whichever route I go down

Thanks again people it really helps to just think through and clarify

bluesnake

elle37 wrote: »

...
1)Yes want to be mortgage free but i think i need to break that goal into chuncks. The health benefits are important to me in terms of financial stress, i need to compromise somewhere

Yes, I agree the mortgages will go up. I would guess eventually to around 6%, but no one can predict the future. All markets fall and climb, but long term in the UK property has got much more expensive.

2)I had wanted to be a landlady at one point before illness but I don't think it's right for me at this time, also

You do not need to be a LL, just give it fully managed to a letting company - cost a London price of about 16% + vat

3)keeping my leasehold means time ticking on the length of the lease, granted it's at 95 years at this point. Yes could extend but that's more money for something that's not mine

You could get another decade out of that.

4)need to feel safe in the area i move and i can say having started this thread i'm convinced that the two less desirable areas do not fill me with the safe vibe as much as the other areas. Desirable to me is safety, cleanliness, transport.

Option 10 - a modified option 5) buy your dream house, let it out. Live in your current house for say 6 years. In that time both property values should have gone up. Probably finished paying off your first house, so have a bundle of money for the mortgage of the second, when you move in. The first house you can either sell CGT free, or rent it out.

I think my son has inherited my control freakishness so living in a property with other students that's his mums would drive him crazy !! We don't know whether he will get an offer in or out of London the preference is out of London so he can be away from home, he'll want to visit so i'd want somewhere he can have his own room. He's studying pure Maths so with any luck he'll get a decent job and not need to move back!

Tell him the control freakishness is an expensive quirk that cost you approx 8K a year

5) currently live in a 3 bed maisonette with 2 reception rooms, don't need that much space when he has gone ( gosh this is making me feel sad now!)- could look at smaller property in desirable area

that is 5 rentable rooms and in London zone 1 it is about £550-850 p/m for a double - 2k5 p/m (minimum) rental income.

could look at desirable area, property to do up over a few years, may give me something positive to focus on.

Your only 37- still a yummy mummy

The other issue is that if you can afford a deposit of a second three bedrooms house now, in five year time you may only be able to buy a two bedroom, and in ten years may not even raise enough deposit for a flat, plus your repayment length is limited. Also BTL mortgages are about 1% more expensive, but the rules are slightly different and they depend more on how much income the property will earn, rather than how much you earn.

CobaltBlue_2

OP - didn't realise you were in London...

...that's just....crazy..?!