Owning your own home

ERCs and not knowing what mortgage rates will be available in a years time scupper that kind of thing.

You could fake it by getting a small mortgage then immediately overpay a lump sum with the additional proceeds from the flat sale, which could then be withdrawn later on. You'd have to get the right terms though to avoid ERCs again

I'd put the rest of your cash in a mix of shares and gov't bonds and forget about it. Steady returns in the long run, no interest rate exposure and no hassle chasing tenants. Drawback is you don't lever your position, but that should reduce volatility.

I am at a point of indecission regarding my mortgage.
My mortgage broker is trying to get me to to only use half the cash from my flat sale as deposit on my new house, and use the other half as a deposit on a buy to let property.

I quite liked the idea of having a small sub £100k mortgage on my new place, but also know that it will not go up in value anywhere near as quickly as a 2 bed flat in the city centre. So it would seem to make financial sense in the long run to split my equity over two properties.

Who currently has a buy-to-let? Are they worth the hassle?

If I did do a BTL, I probably wouldnt buy it til next year, as it seems a silly time to buy as an investment at the moment.

I'm confused, and need to make a decision by monday as I need to get my mortgage application rolling for the place I've just had an offer accepted on.

I have a BTL. I've had it for eons and should finish the mortgage payments if not this year then next. Mine has been fine and reasonable hassle free, other than when the agent ripped me off for half a years money. I took care of matters with a pick axe through the agents' new SL55. I gather he owed a lot of people money.

I think we have now entered the realm of home ownership. in london, no less.

in a way I am still ambivalent about owning vs renting. we have been very happy renting here - it's affordable and someone else has to deal with unexpected things like a major roof repair. we have been very lucky with our landlord, he could easily make another £300pcm. we have not worried about if/when he will give us the boot in order to sell (he is selling now, and as soon as possible, but simply waited for us to leave).
on the other hand paying rent doesn't invest (not to make money as such, but for future need) - if we were smart about it we could've saved that extra £300pcm (that we will be paying in mortgage repayments compared with rent) and be investing that elsewhere, but we aren't that savvy and property is a good place to put it, anyway.
and, on the other hand, however relaxed our landlord has been, now we get to actually do whatever the hell we like to the place. pictures everywhere! put shelves up! crazy paint colours! an actual real-life garden! I can hardly remember what it's like to be in control of that kind of thing.
I'm feeling a bit overwhelmed. might need breakfastlunch before i go pick up the keys.

As a landlord who made a long-term investment, I never went with the prices that the agents suggested. My aim was to keep rent low enough to cover the mortgage plus a little more for unexpected occurrences. Keeping the rent low, but covering the mortgage meant that it was below the threshold where I'd have to pay any tax on what I was "earning". I was already paying a metric fuck tonne to the various clowns who've occupied No. 11 and I didn't need to supplement my income. Annually I've managed to pay £1 less than the yearly maximum, reducing the mortgage term by just under a decade.

Bobby - do you have a decent pension?
Probably not. So you should probably prepare for death by investing somewhere right?

You can still be a decent landlord.

Let's be clear on this - retirement is not death. I've made various "adverse investments" over the years which should see me have a decent retirement. I'll always invest because I like doing it - even when I retire.

Your BTL should have enough slack in it to cover you for at last one months no occupancy a year. It can also be tricky to manage a BTL from such a distance. You could buy a 2nd Bristol home and bump the mortgage payments up to the same level as the net income making it very tax efficient. This would reduce your mortgage period and maximise capital growth. When you need to sell it you can deal with capital gains tax and possibly move in to it to avoid it altogether.

This.

I'd buy two properties if I were you.

Only if it makes financial sense. Don't do it because you think you're the next Donald Trump. This mentality put so many people in a hole.

i wouldn't worry about interest rates

THE governor of the Bank of England has admitted they could not raise interest rates even if they wanted to.
Mark Carney told parliament that everyone who knew how the interest rate machine works has been made redundant and they have lost the instructions.
He continued: “There’s this massive old-fashioned brass computer with all kinds of dials and switches, and the last time we tried to get it going Eddie George lost three fingers.
“All we’ve got to go on are some handwritten notes saying stuff like ‘Charge inflation tanks before relaxing fiscal bladder IMPORTANT’ and ‘Ensure full liquidity in bond valves with right-angled dipstick’.”

http://www.thedailymash.co.uk/news/business/bank-of-england-doesnt-know-how-to-raise-interest-rates-2014051586580

Who currently has a buy-to-let? Are they worth the hassle?

We have a BTL. At one point we were reluctant landlords - we moved in 2008 and nobody seemed to want my pad in Bow. So I got a BTL mortage and rented it out. Having done it a few years I'm now cool with it and will continue to do it.

Hassle - all investments should have a degree of hassle which is roughly proportional to the potential upside.

As you can imagine, hassle from a home is slightly different to that of Shares - vodafone don't email me about broken toilets. However if you like fixing things and generally making people happy you can manage all this on your own. As long as the property is relatively local...

The upside is the yield - this is the money you have left over each month after the mortgage is paid and the expenses are spent. In general it should be significantly more than the rate you could get on your deposit if say you put it in some other financial product of lower risk. If the yield is significantly less than that then you are - probably - doing it wrong.

A BTL will also require a hefty deposit which has its own opportunity cost that needs to be factored in. Could you be doing something better with it? You define better.

Capital appreciation - the place going up in value - is possible, but not assured, so should be considered as a bonus on top of the yield. How much CA is likely helps you to decide how much of the yield to further invest into the property.

BTL is also one of the few products that allow consumers to 'gear'; bankspeak for profiting from money you have borrowed to buy an asset. i.e. you deposit £70,000, the bank gives you another £100,000 for a price, but you get any profits from the operations and disposal of the thing.

Operations: we don't use an agent, which means over the course of a year we will do basic maintenance and sort out a new contract or find a new tenant if needs be.

I vet the tenants, meet them all, get their references, deal with deposit insurance schemes, sort out contracts. None of this is that much fun, but I like our tenants, and they like me, so generally it's quick and painless if not hugely interesting.

As the place is quite modern generally there are no problems to deal with - everything just ticks along nicely. So most months I do no work associated with it. But things come up - a tenant moves out, the fridge [strike]brakes[/strike] breaks etc - and suddenly you have to do something and relatively quickly. Have a think about whether you like dealing with these kind of issues. Some do, some don't. You can pay someone else to do it, but you will pay over the odds and you'll have to manage them, too. Different problems, rather than no problems.

Like BD I don't define the rent by market rate - I want to keep my tenants, so I under price, which means they nag me for contract extensions, not the other way round. But as long as the yield figure stays on track it's all good.

.....the fridge brakes .....

When you've been on the forum too long :)

:)

unusual for someone to get them the wrong way round that way round.
you sound like my last landlord, which was all in all a Positive Experience.

Brother-of-Mashton has just left my flat, he'll be back on Saturday morning to fit a new fuse box (consumer unit in new-speak).

Really nice chap, thoroughly recommended.

Brother-of-Mashton also just fixed my hob - lovely chap. Another recommend from me.

yep - he's a champ.

I'm another that's moved out of London, though I still work in central.

My reasons were more than just financial (other half needed to commute to Wiltshire) but the renting game felt like a piss take to me. Paying off someone elses mortgage becomes galling after a while esp when you see the comparative mortgage payments on your own property combined with re-sale value means even if the house prices stop rising it's only costing you the interest (which is much less than rent).

I now live a 25 minute train journey out from Paddington in a two bed Victorian terrace with garden in a town that has all the urban grime a hipster can ask for.

Definitely worth it if you want to buy - you can buy a normal house on a nice road for very little compared to what it's costing people to buy dingy leasehold flats in not desirable parts of the city. The downsides are obviously there for everyone to see so I won't bother listing them but I think it's worth saying that life outside the M25 isn't that bad.

Easy guys, don't want to inflate his ego too much,

Also, stop giving him work, he'll never fuck off and give me my spare room (inflatable bed on the living room floor) back.

ha! he should be finished at my house by now.

i'll be sure to tell him you hate him.

Thanks. I'll be sure to get him to poo in your kettle.

''owning your own home''- thread started by hobo

i lolled

currently sitting at home pretending to be furniture while prospective buyers look around. anyone interested in a nice victorian top floor 2 bed flat near stockwell? hasn't been decorated in years, knackered woodchip on the walls. you can't have the print in the front room, we're taking that with us, but the huge mirror over the fireplace is staying.

What's it on for?

450k (we're tenants)

Bashton did a full days work at my flat today, he's back tomorrow to (hopefully) finish off.

It's going to make a massive difference- getting the electrics done was what needed to happen before the walls got painted (cutting chases etc).

I would like to live here: http://www.rightmove.co.uk/property-for-sale/property-30242373.html

Sell bieks!

That's a lot of bikes.

I'll buy a lotto ticket this week.

It's hideous.

I don't care