8:31 AM, 5th February 2014, About 7 years ago 8
Following divorce I have found myself owning the former marital home in Newcastle but with my kids having moved to Manchester. For entirely non-financial reasons I jacked in a very good job there and moved to be with my young kids who live with me half the time. I guess I’ve become an accidental landlord. I have let the house successfully, with no voids or undue problems, for almost 2 years whilst renting myself in Manchester. What was initially an emergency measure has drifted into an established lifestyle.
My new earnings are half my previous salary but with an excellent civil service pension and amazing flexibility (home working) that fits round the kids’ school etc. That flexibility has a monetary value too in that I avoid commuting costs and before and after school care (besides I did move here to actually see them after all!!). I am looking to increase my earnings but have decided to only take on better paid employment if it doesn’t compromise my time with the kids so it may be a tough ask in the medium term as they are 10 and 7 years old.
I have £20k or so in the bank (plus around £60k in the house which has been valued at £230-240k) so I’m not flush by any stretch but with the market conditions, the rental track record of the house and plenty of hard work I wonder if I can make something of this BTL accident.
I like the rented house in Manchester and don’t want to unsettle the kids by moving more than absolutely necessary. The landlord has owned it since 1972 and shows no sign of selling so I am happy to risk staying here for another couple of years whilst I get things sorted. It is a far larger house than I could afford to buy right now even if I sold up Newcastle. I’m also a little better off each month renting because the Newcastle house rents for far more than the £700 I pay here.
I’m now trying to move the whole arrangement onto a more business like footing. The reason I set out ALL of that detail is that it becomes very relevant when considering my options going forward. In short, if you were planning a BTL empire, you wouldn’t start from here.
Looking at things objectively it seems I have 2 options. I can either:
I wonder what folks thoughts are on these choices?
I’m currently erring towards the latter as, on my current salary, I wouldn’t be able to buy a great house in the kids’ neighbourhood and secondly, having found myself as a landlord accidentally, I am interested in the potential for a BTL strategy to support my efforts to boost a potential deposit for an owner occupied house by withdrawing equity in say 2 years (market permitting) and then, in the medium to long term, go on to provide the funding for further purchases in much the same way it sounds like Mark Alexander did. I realise this may take some time.
After all that background I wonder what folks thoughts are on using this position as the key themes of my potential BTL strategy for the next 20 or so years. Any thoughts you have are really most welcome and I’m sure they will be a great help to me in moving forward confidently but aware of the risks and limitations of my situation.
Many thanks for reading this and any thoughts you may have.
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