Which of these strategies?

jamels2

With 100k available I am looking for opinions on two opposite ideas. My long term aim is to work less with minimum outgoings and income of some sort to cover day to day expenses.

1. Buy two buy to lets up to 200k each with 50k deposit on each. Rent 800 pcm. Have these paying for themselves. I lodge or rent myself using my wages.

2. Buy one property to live in for 150k with only 50k mortgage and pay it off asap. Once paid off work less or save to invest in a buy to let or bigger property myself?

Thanks for your views which I appreciate!

Guest101

What happens when your tenants don't pay rent?


Or there is a void?


Or the tenant causes £10,000 of damage?

fairy_lights

Will you be able to get a mortgage to pay for both of your rental properties? Do you really want to be a landlord?

danslenoir

How about option 3?

3. Buy one house and pay off the mortgage as quickly as possible. Enjoy living in your lifetime-secured accommodation and be grateful you have this when many others don't. Don't buy any additional properties to let out as this significantly contributes to house price inflation, which in turn will mean fewer people being able to enjoy the same peace of mind as you with respect to having secured accommodation.

Hoploz

When you say your 'long term aim' what stage of life are you at?

Do you need to make provision for yourself in retirement?
Are you likely to expand your family and need a larger house in the future?
....etc

These things are your considerations and people at different life stages will act differently.

jamels2

Single guy aged 35 no kids

saverbuyer

jamels2 wrote: »

Single guy aged 35 no kids

I'd use the money to buy a small love pad and a Russian model wife. That would be my "long-term aim".

hazyjo

I'm 45 with similar hopes, only without the £100k cash! My house seems to be going up around £100k a year at the mo. In a year when the mortgage offer expires, or maybe 3 years if I fix it again for a couple of years, I will hopefully move further out for less. I hope to be mortgage free and working four days a week in the same job (if they let me!). Work/life balance is becoming important to me. I spend far too long away from my home and two days off on a weekend is just not enough.


Rough figures, if I did it now, I'd get around £500k - after paying off mortgage and moving costs, etc, I could buy outright for around £370k, maybe a bit more with a very small mortgage.


So I suppose we're in fairly similar situations/want similar things, but I'm pretty much decided on what I'll be doing.


I could do the above then take out a new mortgage on a BTL and use some of the money towards a deposit, buy somewhere nearby in a commutable area like Southend for around £175k bringing in around £900pm, but it's not really for me. I may as well stay put and see the increase in my current house. Too much hassle - but appreciate not everyone feels the same way and it may suit others.


I have a friend who is buying up houses for BTL like they're boxes of chocolates! I suppose once all the mortgages are paid off, she can have a pretty huge retirement pot. She rakes it in with the rent as she only has interest free mortgages (don't ask me how she's doing all this, I have no idea). One tenant pays a year up front every year, the others all sound wonderful. She's someone who lands on her feet. Always. If I did it, I'd probably end up with the probs Guest101 mentioned, and they'd be ringing me up 100 times a week.


Don't forget they'd be BTL mortgages so different rates. More insurance too, and obviously more risk. If you needed to sell them if in recession, you could be pounds out, or even owing.


I don't see any point in paying off your mortgage only to buy a bigger property with one. You may as well just buy bigger now as prices are generally still rising, or stay put.


Of course, you may meet some lovely girlie who has her own place and you both sell up and buy together, or you may move into hers and rent yours out (or vice versa). Life has a funny way of throwing unexpected things into the mix...


Let us know what you decide and how it pans out


Jx

danslenoir

hazyjo wrote: »

I have a friend who is buying up houses for BTL like they're boxes of chocolates! I suppose once all the mortgages are paid off, she can have a pretty huge retirement pot. She rakes it in with the rent as she only has interest free mortgages (don't ask me how she's doing all this, I have no idea).

Hmm, a highly leveraged BTLer who is letting her tenants pay for her retirement whilst she contributes towards a massive problem with the UK housing market. A real aspirational figure indeed. If only we could all be like her.

Your highly-leveraged friend had better hope there isn't a market downturn or she will be one of the first to find herself up sh*t creek without a paddle. I hope if that happens, she doesn't get much sympathy for a recipe of her own making.

hazyjo

danslenoir wrote: »

Hmm, a highly leveraged BTLer who is letting her tenants pay for her retirement whilst she contributes towards a massive problem with the UK housing market. A real aspirational figure indeed. If only we could all be like her.

Your highly-leveraged friend had better hope there isn't a market downturn or she will be one of the first to find herself up sh*t creek without a paddle. I hope if that happens, she doesn't get much sympathy for a recipe of her own making.

Didn't say I agreed with it lol. I think she's mad tbh. Knowing her though, she'll rake in millions. I think they own 4 or 5 so not exactly a small town but they'll probably buy more if poss. She doesn't even bloody work. Some people...

Jx

marksoton

hazyjo wrote: »

Didn't say I agreed with it lol. I think she's mad tbh. Knowing her though, she'll rake in millions. I think they own 4 or 5 so not exactly a small town but they'll probably buy more if poss. She doesn't even bloody work. Some people...

Jx

I wouldn't always believe the perception some like to paint....