job ending 4 years before retirement age.

bluenose1

AnotherJoe wrote: »

So that's probably about a 3% yield or so, maybe less ? So your profit is mainly the appreciation in price you have already made or hope to get on a new house you'd add?

Although the house costs £100k we will get an interest only mortgage for £75k. Therefore we will use our savings for the deposit, stamp duty, solicitors fees etc, approx £30k.
After paying the mortgage, insurance, gas, electric checks, maintenance etc and taking off 20% tax our profit will conservatively be £3,600 per annum.
Therefore I expect a yield of approx 12% on my £30k investment.
My business plan is to sell in 15 years when my SP kicks in to release the initial £30k investment and hopefully some profit.
I appreciate there are risks if a tenant doesn't pay etc, however we get insurance to mitigate that as far as possible and also interview prospective tenants ourselves. We have had properties for 7 years and so far so good. Hope this isn't famous, last words!!!

atush

bluenose1 wrote: »

Just thinking my youngest is due to go to University in 2 years just as I hope to retire.
I will expect him to get a student loan for the £9k annual tuition l fees and he will also be able to apply for a maintenance loan of approx £4,300 per annum based on our household income. Though I will give him some income to top this up and also expect him to work.
Is your daughter going to get the student loans or are you intending to pay all her fees?
If your income did reduce significantly the maintenance loan your daughter would be entitled to would increase.
May be worth looking at the student finance site to work out her entitlement
https://www.gov.uk/student-finance-calculator

The only problem with those loans is the huge rate of the loan- over 6%. So we delayed retirement to pay.

AnotherJoe

bluenose1 wrote: »

Although the house costs £100k we will get an interest only mortgage for £75k. Therefore we will use our savings for the deposit, stamp duty, solicitors fees etc, approx £30k.
After paying the mortgage, insurance, gas, electric checks, maintenance etc and taking off 20% tax our profit will conservatively be £3,600 per annum.
Therefore I expect a yield of approx 12% on my £30k investment.
My business plan is to sell in 15 years when my SP kicks in to release the initial £30k investment and hopefully some profit.
I appreciate there are risks if a tenant doesn't pay etc, however we get insurance to mitigate that as far as possible and also interview prospective tenants ourselves. We have had properties for 7 years and so far so good. Hope this isn't famous, last words!!!

Much better return than most get for BTL so seems quite a reasonable thing to go for. .

MallyGirl

atush wrote: »

The only problem with those loans is the huge rate of the loan- over 6%. So we delayed retirement to pay.

The interest rate (dropped to 5.4% recently) is only an issue if they are going to pay it all back. DD is going to do a 5 (or 6 if Cambridge) year course so I don't think she will get close to paying it off before the 30 year cutoff. It will just be a graduate tax throughout her working life.

saucer

MallyGirl wrote: »

The interest rate (dropped to 5.4% recently) is only an issue if they are going to pay it all back. DD is going to do a 5 (or 6 if Cambridge) year course so I don't think she will get close to paying it off before the 30 year cutoff. It will just be a graduate tax throughout her working life.

That's how we came to see the loans. We have a BTL (nearly paid off) which we had originally thought to use to help our 3 kids through uni. Now, with one in uni already, we are helping to support but they will all have loans which they will pay off, at least partially, as a graduate tax, and we will use the BTL to help them with property deposits (hopefully).

bluenose1

MallyGirl wrote: »

The interest rate (dropped to 5.4% recently) is only an issue if they are going to pay it all back. DD is going to do a 5 (or 6 if Cambridge) year course so I don't think she will get close to paying it off before the 30 year cutoff. It will just be a graduate tax throughout her working life.

My eldest son is a pharmacist and on a very good salary so think he will repay it all. Though he and his oh, who is also on a very good salary have far more income than we ever had and have bought a house that my husband wishes we could afford. There again he lived at home whilst at Uni so saved money there.
My middle son is doing a masters in Mechanical Engineering so not sure job wise what the future holds. He is very independent and moved out as soon as he could. I will lend him the money for a house deposit if the need arises. I won't give it to him as think he should be financially better off than us.
My youngest will go to University, though has no idea what he wants to do. Something to do with the Sciences. Same again I will lend him the money for a house deposit if the need arises.

atush

MallyGirl wrote: »

The interest rate (dropped to 5.4% recently) is only an issue if they are going to pay it all back. DD is going to do a 5 (or 6 if Cambridge) year course so I don't think she will get close to paying it off before the 30 year cutoff. It will just be a graduate tax throughout her working life.

It all depends on t he degree and earning potential. My 27 yr old is on more than 50K, and one of the 24 yr olds is on 30K. They would have paid back every penny,
plus interest.

atush

bluenose1 wrote: »

My eldest son is a pharmacist and on a very good salary so think he will repay it all. Though he and his oh, who is also on a very good salary have far more income than we ever had and have bought a house that my husband wishes we could afford. There again he lived at home whilst at Uni so saved money there.
My middle son is doing a masters in Mechanical Engineering so not sure job wise what the future holds. He is very independent and moved out as soon as he could. I will lend him the money for a house deposit if the need arises. I won't give it to him as think he should be financially better off than us.
My youngest will go to University, though has no idea what he wants to do. Something to do with the Sciences. Same again I will lend him the money for a house deposit if the need arises.

Engineers are pretty highly paid.

MallyGirl

atush wrote: »

It all depends on t he degree and earning potential. My 27 yr old is on more than 50K, and one of the 24 yr olds is on 30K. They would have paid back every penny,
plus interest.

Yes - that is true. Vets don't actually seem to be that well paid, on top of either a 5 or 6 yr course, so there is reasonable doubt that the amount that will build up will be paid off. All sorts of things may happen to change that position- lots of EU vets going home and hard borders needing vet presence for livestock monitoring for instance.

Terron

bluenose1 wrote: »

Although the house costs £100k we will get an interest only mortgage for £75k. Therefore we will use our savings for the deposit, stamp duty, solicitors fees etc, approx £30k.
After paying the mortgage, insurance, gas, electric checks, maintenance etc and taking off 20% tax our profit will conservatively be £3,600 per annum.
Therefore I expect a yield of approx 12% on my £30k investment.
My business plan is to sell in 15 years when my SP kicks in to release the initial £30k investment and hopefully some profit.
I appreciate there are risks if a tenant doesn't pay etc, however we get insurance to mitigate that as far as possible and also interview prospective tenants ourselves. We have had properties for 7 years and so far so good. Hope this isn't famous, last words!!!

Very nice. Good luck.