What route to take, to eventually quitting our jobs?

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    What route to take, to eventually quitting our jobs?

    Hi all, me and my wife’s goal would be to quit our jobs and go into property full time ( or at least me ).
    In 2 years time, we would be looking to have at least £300k equity in our home with £200k left on mortgage after 5yr fix rate ends, est worth £500k+ ( worth £450k at the moment ). What would be the best route to take, to eventually making me be the first to Quit our jobs then my wife to follow suit straight after ( hopefully)?
    Do we go down the buy to let route or do we buy property/s to do up and sell? If we went down the buy to let route, would it be best to buy place/s ready to rent or do the place up and rent afterwards to potentially bringing in more rent, or
    if we went down the route to buy, do up and sell, at first it’ll be just cosmetic stuff like new kitchen, bathroom, heating system and maybe wiring, but nothing structural at first until we have maybe done a few already. At the moment we have a repayment mortgage, so would we do the same with the others or interest only mortgage? We both earn over the £30k mark, so we would need to plan to make sure we have that amount of income coming in to cover my income and hopefully both of ours.


    Thanks in advance

    John

    #2
    See how the world/UK/England gets through Coronavirus 1st.

    But if you can tell us how house prices and rental prices and interest rates and exchange rates will change over the period you are looking at (? 5, 10, 20, 45 years??) then we could estimate which option looks most promising.

    Only golden rule: Don't have all your eggs in one basket (eg not all in property...)
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      Not sure how experience your are in this field, but if you was in my situation and you’re ready to remortgage and have that much equity, what would you do? And what would be your long term goal? Sorry, new to all this property stuff and would just like to make some good use of the equity we have already in the house. Was thinking to opening my own bakery as I’m a trained baker and chef but I would’ve assumed there is more “dough” to make, this way haha

      Comment


        #4
        Dunno: Age 72, getting out of the game (age & health..), but it's certainly less rewarding to be a landlord after the changes the Tories imposed.. Your question is crystal ball gazing: Only thing for certain, very little crystal, awful lot of b*lls.

        When I started for a second time, 2000, it was to give me something mildly interesting to do during retirement, and I could afford to gamble - had assets & pensions... : Can you afford to gamble?

        Only become a landlord if you have the financial & emotional reserves to cope with the tenant-from-hell (or agent-from...) who doesn;t pay for 7 months whilst you pay mortgage etc fees and legal costs over the court case & repair costs: Repair costs when not getting rent? Oh yes, of judge will decide you are harassing tenant & give him more time.

        Nope, those "rent guarantee" schemes & rent protection insurance policies often don;t pay out.

        I do hope you've not been near any of those get-rich-quick property investment "seminars"....
        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

        Comment


          #5
          The chance of giving up your jobs based on property investments going forward is zero (unless perhaps you are 55 now)

          Comment


            #6
            I will try to be constructive, you have an outstanding mortgage of £200000 with equity of £300000. Do you have additional savings or are you intending to release equity from your property? If the latter then you are pushing back the date when that loan is repaid and in the interim incur increased mortgage costs .
            Whereever the deposit monies come from you need approximately 25% deposit plus associated monies for legal, valuation and costs not allowed to be added to the mortgage. As has been mentioned property is cyclical with falls as well as increases, funds need to be set aside for essential repairs and maintenance so any profit will be nominal until you have built up a reserve fund to cover rental voids. Not easy to take risks when that is your only source of income.
            Buying property to refurbish and resell has its positives but unless you have enough time to do such works yourselves paying a builder/ plaster/ electrician will erode a significant part of any potential profit. Buying low cost property in socially deprived areas is full of risks and the level of capital growth is seriously questionable.
            Depending on your age I would be advocating trying to become a homeowner without being tagged with a mortgage then you can afford to put savings from the monies previously used for mortgage towards funding the first BtL.
            one word of caution please, avoid property seminars promising you the opportunity of being property millionaires , this is to my mind fools gold, the only people benefit will be them leaving you out of pocket and no nearer to being able to retire and live off rental profits.

            Comment


              #7
              Start with the basics.

              How much money do you need each year to live the lifestyle you want to live when you are both no longer working?
              Do you plan to have any children, and how many - and how much will they add to that budget?
              Do you have any (realistic) windfalls from inheritance or work?

              That gives you a budget.
              You can then work out how many properties with how much borrowing you would need to have to deliver that.
              Don't forget to allow for tax, inflation and (probably) a higher cost of borrowing over time.

              Then you start to look at the practical steps to go from where you are now to that end point and how long it would take,
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Originally posted by jpkeates View Post
                Start with the basics.

                Don't forget to allow for....
                And also allow for the biggie -- the possibility that property prices might decrease by 50% or more in real terms over 20 years (back to where they were in relation to income), or that they might decrease in absolute terms.

                Comment


                  #9
                  Originally posted by AndrewDod View Post
                  And also allow for the biggie -- the possibility that property prices might decrease by 50% or more in real terms over 20 years (back to where they were in relation to income), or that they might decrease in absolute terms.
                  Yes, this as well.

                  For most people who want to quit their jobs, the issue is income, not capital growth.
                  Which, once you do the sums, is why, for most people, it remains an aspiration.

                  I could never have accumulated enough income to live on (and have a child when I did) without working.
                  I made the foolish mistake of not being born wealthy.
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    I think this op is at risk. Vulnerable to being lured into the clutches of one of the get rich quick from property gurus. Op beware

                    Comment


                      #11
                      DPT57 thanks for echoing my serious concerns over the potential vulnerability of the OP falling into the clutches of these “So called experts” the only thing they are experts at is the extraction of money from the vulnerable seeking an easy route to wealth.

                      Comment

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