Got the dream house - now to pay it off

Maxthebrave

Aw Gallygirl thank you so much for your kind words. I have followed your diary on and off over the years and its been inspirational. Its nice to know it can be done although, as you say, the government seems keen to give landlords a hard time right now. Fingers crossed we can make it work.

The only account DH has that I can't see is his current account. He is now on strict orders not to use it unless its an emergency or nice things he doesn't want me to see like presents.

I need to open another account for the BTL once it happens. Was browsing the MSE recommendations but will wait until last minute incase something better comes out.

I'm off to work today and DH is taking the girls to a birthday party. Hoping he can manage a slow cooker lentil ragu for dinner but he might protest as, by following Jacks recipes all week, it seems we've eaten nothing but beans and pulses :rotfl: I will switch to Nigella next week to balance things out.

SuperSecretSquirrel

Maxthebrave wrote: »

Its looking like our repayments will be almost exactly the same as the BTL should achieve in rent which means we will likely be contributing around £300 a month in management fees, tax and maintenance.

This should set alarm bells ringing. Your plan from day one appears to be to subsidize rent for your tenants, in the hope of capital appreciation paying off in the long term. Professional landlords would aim for a positive yield from day one.

If you want to bet on house prices increasing, have you considered the possibility of investing in REITs? Even the riskier option of buying a few shares in the big housebuilders might be an option, it would be a wider spread of risk than a single property.

Of course it's not as easy to use leverage for the above (no mortgage, though personal loan or credit cards may be possible), but that might not necessarily be a bad thing.

Maxthebrave

SuperSecretSquirrel wrote: »

This should set alarm bells ringing. Your plan from day one appears to be to subsidize rent for your tenants, in the hope of capital appreciation paying off in the long term. Professional landlords would aim for a positive yield from day one.

.

Not really. Our thinking is that as long as the property doesn't decrease in value over 5 years someone else will be paying our mortgage. The £300 will be mostly paying into a pot for maintenance and once we hit a certain figure will be used to over pay the mortgage. The only issue is that once I start full time work again the full income will be taxed so we will lose 20% of it.
I know its not the best strategy for making millions but with 2 young children we have been very cautious. I really do welcome any comments on it as Im still not sure its the best thing to do.

Jacks lentil ragu was a huge success and super cheap too. Costed out at around 40p each I think with some spaghetti and grated cheese. Both DH and I feeling a tad bloated from all the pulses this week.

Had a lovely day at work achieving lots and left DH in charge of answering the door to a lady collecting a Facebay item so thats another £20 in the pot.:T

gallygirl

Maxthebrave wrote: »

Not really. Our thinking is that as long as the property doesn't decrease in value over 5 years someone else will be paying our mortgage. The £300 will be mostly paying into a pot for maintenance and once we hit a certain figure will be used to over pay the mortgage. The only issue is that once I start full time work again the full income will be taxed so we will lose 20% of it.

Pretty much how I looked on things - my initial figures (19 years ago :eek:) were on me more or less breaking even over the 20 year mortgage period then having the income as a pension. I built in very minimal capital growth, but obviously you get capital growth on the whole value, not just the amount you've initially invested so even a low % can give a pretty good ROI.

minimaddave

Maxthebrave wrote: »

Found a £15 direct debit to Carphone Warehouse on DH personal account.

Hi Maxthebrave,

Good luck with the BTL plan!

Might be worth trying to claim back for the unused insurance; have a look on the Cancellation Hero Successess forum!

Maxthebrave

minimaddave wrote: »

Hi Maxthebrave,

Good luck with the BTL plan!

Might be worth trying to claim back for the unused insurance; have a look on the Cancellation Hero Successess forum!

Thank you. Will do. The big problem is that Carphone Warehouse refuse to speak to him on the phone and say we have to go to a branch which is pretty far away. Planning on trying to sort it soon.

Had a lovely chilled mothers day. We all went to Aldi meaning I could shop while DH shepherded the kids - DD2 is at that cheeky toddler stage of running off. DH picked up 5 bags of compost for the garden and some more little bits for planting seeds with DD1. It was £37 in all but I will need to head to a different shop at some point.

Came home to potter in the garden before the rain hit. We planted a cherry tree and some rhubarb and all helped to sweep up some of the mountains of leaves that are everywhere. We should have done it in Autumn but still learning how to manage to our country pad. Its nice making plans with what to do with the space.

I have requested a takeaway tonight and I think DH is very excited about that bless him. Now meal planning with Nigella for next week.

Maxthebrave

Having a mild panic that March is turning out to be very expensive when it was supposed to be cheap.

Its DD2s birthday soon and we have no clue what to get her. Trying not to spend too much as we want to get a trampoline for the garden later on. Winter birthdays are such a pain as we've found if we buy the big outdoor stuff for them it cant be played with and becomes a rubbish present. Settled on some Peppa Pig stuff and a doll she fell in love with in the shop today. We put £100 aside each month for birthdays and Christmas so at least its already accounted for.

Spent £25 today in Waitrose. I had to go to buy DD2 some of her special bread and her insanely expensive nappies. Going to try very hard to not spend for the rest of the week now.

Maxthebrave

Managed to find DD2s nappies a lot cheaper online. She has extremely sensitive skin and we have tried every nappy on the market plus cloth ones and the only ones that don't seem to bring her up in eczema are Naty at £7 for a pack of 18 :eek: We also have to change her at least every 2 hours in the day so its been a big impact on the bank balance.

Another big expense has been milk. None of us can really tolerate dairy so we always have an array of plant milk around the house but everyones favourite is Koko which is £1.50 a carton and we use at least 3 a week. Discovered they were 3 for £3 in Tesco yesterday and bought the last 12. Hoping to pop in before work tomorrow and get a load more. The expiry date is early next year so if I can find a way to get 123 that's £61.50 saved :rotfl:

Maxthebrave

March is turning out to be painfully expensive. Took aged cat to the vet yesterday and she ended up having emergency dental surgery which is not covered by her insurance Now £500 poorer but with a very bouncy, happy cat. We have been wondering whether we should go to the expense of fitting a cat flap (it needs to go through glass) but as vet has now confirmed theres nothing else wrong with her I think we have to do it.

Iv'e become obsessed with buying in bulk to last us the year. Found a really good deal on DD2s nappies so we now have enough to last until Christmas :T Still on the hunt for Koko milk - grabbed another 24 yesterday. Have also stocked up on Comfort Pure and in search of an offer on Fairy powder. These seem to be the only brands my eczema riddled family can cope with so I know they will get used.

and now I have to call a roofer to deal with our ever leaky roof :eek: At least that can come out of house maintence pot.

April is going to have to be a strictly no spend month.

Maxthebrave

DH is in my bad books. He has spent years assuring me that the overdraft on his personal account is free while I ask him to check and double check. He never has any clue whats happening with his account.
I opened a letter to find out that Natwest are refunding him nearly £2k because he was missold a Platinum account. How do you not notice £19 a month leaving your account? In addition to the £15 phone insurance we discovered the other day. I could scream:eek:

On the plus side he did think to apply for the claim and also his payrise is confirmed and its a little more than we hoped for. We should actually have money at the end of the month now and can start putting it to good use :j