Future Proofing my life: Deposit saving then MFW journey in under 13 years

South_coast

Yes, leasehold here. Technically we each have a share of the freehold, but there are 50 flats so you can image what getting 50 separate leaseholders to agree about how best to undertake repairs and maintenance would be like.... (the last meeting I went to, it was discussed that the balconies would be replaced and one of the other residents was suggesting that they didn't get done on any flats which were being rented out, as those owners were making a profit from them 🤦‍♀️🤦‍♀️🤦‍♀️) So we have a committee and then there's one person that runs the committee and bosses everyone else around, so basically one person is in charge of the whole thing! It's a long way from perfect, but it does mean I just hand over my cash and disengage brain 👍

Grogged

Some lenders let you temporarily use your existing mortgage as a BTL, but they'd probably want you to convert it at some point.
I see most people take on 2-5 year fixed rate BTL mortgage deals, so you could time it's conversation around that.
It's not for everyone.
For budget purposes I assume you would be saving or OP the difference between your current rent and the BTL mortgage payment. This would give you a buffer for voids and allow you to pay it off quicker. (Assumes a repayment BTL).

SandyShores

We looked at BTL when we were in a lovely but really cheap rented four bed house.  We thought we could get a nice apartment to let out and then move into when and if we needed to.  We couldn't get a high enough mortgage as they wanted us to have a big deposit, and there was also something about them wanting you to already own a home.  I can't remember the details as it was a couple of years ago, but I found this on the 'net https://www.moneyhelper.org.uk/en/homes/buying-a-home/buy-to-let-mortgages-explained.  Things do change though, and also it might be easier to turn a property you already own into a buy to let - but, there are a few threads on MSE about the dangers of not informing your mortgage lender about it.  I'll see if I can find them and update here.

Edit - there's one thread here with some information about renting out a property:  https://forums.moneysavingexpert.com/discussion/6284346/first-time-buyer-and-renting-the-house-after-6-months#latest

LadyWithAPlan

Tx @SandyShores the links were super helpful.. I don't have a property already so ...think it may be easier to start off in my own home first..


@Grogged however I do this, OP is my definite plan, mixed with increased Sipp contributions  once I am in. I wont probably sleep til I get my monthly payments down ....  (planning to use the OP to do that v reducing the term in the first year or 2) . BTL looks like too much risk and focus right now,

@South_coast good to know. I did not think about the service charge covering the buildings insurance and  I assume the excess as well?

I saw a fabulous flat today not that far from where I live. Its very me and I would be very happy moving in there even from here So I think this is about finding the flat I really want, rather than one that will just do. I need to see far more .. I have seen 9 so far it is nothing in London.

It has a gorgeous large open plan lounge kitchen with high ceilings and a huge master bedroom. The 2nd bedroom  though is tiny  Harry Potter level and there is no balcony. However I could fit a bench by the front door and there are triple bay windows in the lounge flooded with light.  £1700 pa service charge inc ground rent, I could be happy there I can tell.

BUT ....as we walked into the building the first thing I see  there were 5 older ladies all smoking that smelly stuff sat on chairs in the entrance and chatting! I don't smoke  anything   but I am chilled. I am now thinking though that to pay £450k and then try to resell it in years to come  could be hard as many people are not as chilled as me  so it and that second bedroom is  tiny  as in a single bed and a wardrobe would be a squeeze.. ... So I need to think.. and an offer would be much lower.

Free money Coop today  from their weekly app offers - 75p saved  

August  Free Money  = £139.03 - so I smashed my £100/month goal 
Nectar  points used £17.50 
Green Jinn £1 + £2.13 I did not know was there  + £1 = £4.13
Co-op  75p + 50p  +75p
£12 Too good to go voucher
£10 uber eats voucher 
Amazon £6 gift card offer

Tesco points £4.81 used from my gift card

£20 – neighbour sale

£12.18 Prolific C/O -  +£15.25 +  7.08

Lidl coupons 49p

H&B £27.04 5th delivery subscribe and save

M+5 55p

 Aug 16th to 31st  Groceries Challenge £60.79 / £70 

Spent Grocery £3.23 on   some sweets and mushrooms   again plus £4 too good to go from a local pop up Caribbean – looks like lunch is sorted tomorrow. I did not need to buy anything as have loads of food in .. I will have to stop these little unnecessary extras - at least I can see where my cash flies off to.

-     

Matched Betting - I have decided to focus on tracking everything again on  Extra places  as I want to do more of that . Of the 6 horses I picked -  4 came in exactly where I needed - 4th -  to make a nice profit and the other 2 came in 2nd... so this was a great day for that. I then dashed to see flats and then the gym.

Tomorrow is gym and programme day  - hope everyone is having a great bank holiday.

South_coast

Yep, buildings insurance def included 👍

LadyWithAPlan

I managed my 5th NSD!
Aim was 8/8 but that was ambitious as I did not start before 13th Aug and had never done a conscious NSD in my life before.

I went to the gym and instead of popping in to get a couple of things or seeing reductions I went straight home - which meant NSD, no sweet buying and no movement on my grocery challenge. That staying out the food shops is definitely a lesson I have learnt this last few weeks.

I have been paid a larger part and a small invoice so I will budget with those for next month.

Plan is once I close my MFW books tomorrow I will for the first time move excess money from certain pots into savings and watch it rise for EOM.
 I normally leave the unspent cash in their own pots but this way I can really be motivated by what I did not spend and see where it is going. Some of my longer term pots I will leave such as my gift, annual dues and future tech pots.
However I do have excess in my toiletries etc so I will just trim some down. My 100k goal may not be doable before I buy but I am trying my best.

I am aiming to get to  £68,800 mark by extra savings in August. so £148 more - all from not spending in August.  

I can definitely get to £70k and beyond in Sept - hopefully  by Tuesday once I have done my budget.. I am freelance so I never know exactly when I will get paid.

I also will collate all my MB  income for Aug  as normal tomorrow - I only do it once a month now. I am planning to split this extra  MB income  50/50 house savings and SIPP. I have stopped investing in my SIPP this year to get the house deposit up - which hurts cos of the free cash I am losing out on, so this extra amount  coming from my sports trading and MB will at least make me feel I am making a little effort.

debtfreeoneday

hi thanks for popping into my diary. Will follow your journey as well!  Hope you’re having a good bank hol. 

greenbee

The first few months of getting your head round this always takes time and a lot of detail as you work out what works for you, and what's worth the time/effort/attention. I've done surveys in the past when I've been on sick leave, but when I'm working they're not a good use of my time. And I've gone through periods where I've spent a lot of time and attention on my investments/pensions whereas now I tend to leave them to it much of the time. TBH once the pension advisor at work told me that the funds I'd selected meant that my pension was outperforming almost everyone else he'd seen, I stopped worrying too much. 

Most importantly, have you sorted out your online programme? Because you know that once you've met the deadline for having it finished, you're then going to have to get going on the marketing and promotion so that people actually use it. So it won't quite be passive income, but think about how many hours a week/month you spend getting the word out. 

As you don't currently have a full freelance workload, could you assign some time to this? And also to the work you loved but gave up at the start of the pandemic if that's feasible to do part time. Then you could say you have 3 income streams for mortgage purposes - your main freelance work, your 'new' business, and your 'passive income projects'.  And if the latter two take off you could gradually reduce the amount of time spend on your 'old' job. 

When it comes to lodgers, I always intended to have one, but end up buying projects so can't expect anyone to pay to live with me. And generally sell up when it's finally habitable - by which time I'm quite happy living on my own!

When I first took out my first mortgage (and when I moved here) my mortgage was at the limit of what I could afford (which was very different to what the bank thought I could afford). It's now much more manageable, but I know that having it paid off - or at least representing a much lower number of years' salary takes a lot of the pressure off. 

Enjoy looking at flats, hopefully you'll see something you love. Just in case you haven't already done it, have you asked your current landlord whether they'd be willing to sell to you? It might be worth seeing whether that would be an option. 

LadyWithAPlan

@greenbee thanks for all your thoughts and taking the time to respond so fully - very useful indeed and your reassurance on taking out such a large amount.
 I am coming to terms with the fact I will be taking on a big burden but all my spreadsheets tell me it is affordable even on my 3 days a week and the extra odd income I have currently. 

I love living on my own as well so a lodger is for emergencies only I feel

You are right on a lot of things - the surveys can be a distraction in working hours, as my normal day rate is far higher than the survey rate. Great you have done so well on pensions -    I have done well in my new started SIPPs (i have a DB pension as well) so I need to just look at this monthly rather than more.

Get rid of the distractions is a lesson I need to always remind myself.

I have a lot of plates in the air which all take time  especially as I have now started home hunting, plus I need gym time.   I know I always have to focus on one plate at a time and that way things get done.

Just thinking through myself ....
You are correct in pointing out my passive income programme needs to take priority and  will take time to market  but be a useful  extra source of income. It also is stopping me getting 5 days a week work as I have been saying  I need to finish it first. before getting extra work So it has to get done.
I have procrastinated all weekend over finishing it as I know its a priority but am finally doing  it now as we speak.  I think I do need to take a couple full days a week off to only do this programme til its launched then the marketing begins.
Its in a few parts  to launch
Part a - I need to finish the 2nd edit, plan is today/max tomorrow finish
Part b - just needs checking of where I need to add links and pics and possible last time spell check
Part a - will then need a final spell check
Part c - creating and checking the extras that are coming with it
part D - I will do once a and b are done - recording the audio to go with it all
Part E is getting all the set up /webpages/adds up and on going
Part  F - marketing it


My other work  which was my FT freelance work pre covid always needs a lot of a push from myself. Having said that I am starting to earn a  small income from it from next week and once my programme is up and running I can start looking at time to spend on that and the 2022 better future.

My procrastinating on doing the work I need to get the programme  over the line is a real pain, but I have spent so much time getting to this point if I ask myself to just stop and give up, my heart and head rebels.
Of course I don't know I can make money from it  so that is what is also stopping me.. It is a case of getting on with it or giving up, so now the focus is on getting it over the line.

I also match bet and sports trade at the weekends and the odd one hours in the week evenings  so again this takes time but I do earn a nice extra income from it tax free especially as a HR taxpayer.  So my Saturdays and half Sundays are often filled with that - again time I am taking  from my programme. Looking at all I do, I think a fixer upper as a home is a bad idea, although I have seem one with a garden (in London this is a special thing).. 

I can't buy where I am as when it finally gets refurbed it will be going for about £800k looking at the new flat prices next door... My new programme would have to sell a lot for that.

greenbee

So with your programme, you clearly need to treat it like a job (which it is). There's a fair amount of sunk cost already - not just the time you've spent on it, but the time you've been procrastinating and therefore not earning elsewhere! Can you work out how many hours you need to do each activity and plan them in? 

It sounds like you should prioritise this above surveys for the moment - maybe a tight deadline, clear plan and a bit of pressure on yourself to make it your top priority would be a good idea. Whether you prioritise above MB etc is down to you to work out, but it may well pay off in the long run. Or you could compromise and split the time. 

If your current place hasn't yet been refurbed, is it worth asking what it would cost if you bought it now? Then it would be up to you if you wanted to refurb it or not. If you don't ask, you won't know... and if you really like it, then it's worth it even if the answer is no. I'm guessing that if not, you'll need to find somewhere new before the owner decides to do it up.