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Post by alphamare on Oct 11, 2009 7:24:48 GMT -5
Hubby and I have been married for a few months now and have come to the decision to remain CF.
We have decided since we have the ability to save large amounts of money (currently renting our home) we will save for a fairly large deposit toward a maximum of £120k rental property of our own (buy to let i assume... i will be spending the two years we are saving to do all the research i can) and use the rental income to pay off the mortgage, although we are also lucky in that we can afford to run the property should it be uninhabited for a while.
We will then save for another two years after purchasing this property for the same amount of money and buy ourselves a home of approximately £200k in value.
We will pay this mortgage ourselves.
We intend on never selling either property and want to retire to Australia (have a few other plans along the way, and buy some land out there) and will live our retirement off the land funded by the income from the two homes one which will pay the mortgage of the property in Aus (i think we will have a sizable deposit but would have to pay some mortgage) and the other will provide money to live off.
I dont believe in savings anymore. I think bricks and mortar are the safest bet. I know this is only the bare bones of our plans but its do-able (it would not be if we had children!!) I just wondered what others thought.
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mar
Full Member
Posts: 237
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Post by mar on Oct 11, 2009 10:48:20 GMT -5
Wonderful plan ! Sounds like you have all your 'ducks in a row'.  If you don't mind me asking, - how old are you ? Mar |
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Post by alphamare on Oct 11, 2009 11:33:27 GMT -5
not at all  i am 24 and he is 26. hopefully we will have property number one by age 26/28. later than some but something i dont think we could do with kids at foot. *lines up ducks*  |
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Post by happy2bchildfree on Oct 11, 2009 13:25:11 GMT -5
I know someone who did what you have planned--although he stayed in his hometown--and it has worked out well for him, although it hasn't been without some real hassles and problems that go along with having rental properties.
It wouldn't be for me, but for someone willing to take the bad along with the good, it can be a good investment.
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Post by alphamare on Oct 12, 2009 2:56:42 GMT -5
Can you enlighten me to the hassels etc? (all in the name of research) I worry about getting crappy tenants etc but we would be buying the property with tenants in mind so 'them ruining our home' wouldnt be a worry. It would just be them ruining our house although i did think thats what deposits were for, to cover damages etc. Ive been a tenant and i know how hard it is to be one (all the rules and how well you have to behave) and how protected the landlords are, im banking on that being the same for us one day. |
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Post by happy2bchildfree on Oct 12, 2009 13:55:11 GMT -5
Can you enlighten me to the hassels etc? (all in the name of research) I worry about getting crappy tenants etc but we would be buying the property with tenants in mind so 'them ruining our home' wouldnt be a worry. It would just be them ruining our house although i did think thats what deposits were for, to cover damages etc. Ive been a tenant and i know how hard it is to be one (all the rules and how well you have to behave) and how protected the landlords are, im banking on that being the same for us one day. I'm sure that this is only the tip of the iceberg and I don't know the half of it, but from what I've heard from rental property owners... Finding the right tenant is a big hassle in and of itself. Even when you find someone who passes the credit and reference checks, this is no guarantee that they will end up being who you think they are. You may get someone who calls you constantly for every tiny little thing that goes wrong--or you may get someone who doesn't call when things break and then a little repair turns into a big one. If you are local, you can take care of the properties yourself, but if you're not, then it is necessary to hire a property management company to do it for you. Just because the property isn't your "home" doesn't make it any cheaper or easier to repair if the tenents trash it. Yes there are security deposits, but if the repairs cost more than the security deposit, then YOU have to go after the tenants to recoup your expenses--and this can mean expensive legal action, not to even mention the hassles involved with that. Then you also have the hassles of doing the work yourself or hiring someone to do it. And if there are extensive repairs to be done before the property can be rented again, that is down time where you won't be collecting any rent. If you have to evict a tenant, that isn't an easy process, either, and involves legal action. You can easily have someone living on your property and paying no rent for 6 months or more while you go through legal channels to get them evicted. I've known a number of different people who have bought rental properties because they thought it would be easy money--and many of those people ended up selling the properties when they realized how much of a hassle it could be and the money they were making simply wasn't worth the hassles they were having to deal with. This is only what I know secondhand and I'm sure it isn't the half of it. |
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Post by alphamare on Oct 12, 2009 15:08:31 GMT -5
pros and cons i guess. I am hopeing the longterm pros will out weigh the cons
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Post by preraph on Oct 12, 2009 16:30:35 GMT -5
What I heard from my really nice ex-landlords is that there are many years it costs more money than you make. They said the ONLY way to have a hope of making any profit is if you can pay cash for the property (so you don't have the interest which is way more than the house itself over the loan term) AND if you do ALL the repairs yourself, and not ever have to hire anyone, which is what they did -- and the first time they had to replace a water heater, that ate all their profit that year.
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Post by alphamare on Oct 13, 2009 1:03:51 GMT -5
Even if its a lifelong commitment? We want to buy a property to rent out for the rest of our lives. Because when there is no morgage left (i dont think we could save up the entire amount but certainly a good chunk) then we would live off the funds.
I think i have more research to do.
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Post by preraph on Oct 13, 2009 10:59:01 GMT -5
I will say that it also matters whether you are in an area in which property values rise dramatically. Obviously, that would be the best situation, although places like that, usually the investment is in the hundreds of thousands and the main profit is from turning it over a couple years later.
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i am 24 and he is 26. hopefully we will have property number one by age 26/28. later than some but something i dont think we could do with kids at foot. 
