Financial help with living costs whilst building up a property business

by Readers Question

14:08 PM, 16th August 2013
About 8 years ago

Financial help with living costs whilst building up a property business

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Financial help with living costs whilst building up a property business

I resigned from my job a few months ago to concentrate on renovating property with my partner. Our existing handful of rental properties generate enough income to pay their mortgages plus our residential mortgage. My partner also runs an online retail business but is finding it hard to cover all of our living costs. Financial help with living costs whilst building up a property business

I have looked at various means of lowering our living costs, such as renting out our residential property, or selling it to move to a smaller one. However, with no salary, and even with our rental income and my partner’s income from his online business, we would not even be able to get a residential mortgage on a property half the value of one of our rental houses. If we sold one of our rental properties we would lose an income that helps to pay our residential mortgage, so would be in a worse situation after we had used up the net income from any sale.

I have looked at claiming income support to help supplement our income, but it seems that with the net worth that we have from our houses, thatI would be unable to claim benefits. My question is does anyone know if there is a benefit or suchlike that I might be eligible for (which does not require paying back), to help with living costs whilst developing a property business – where the capital from property precludes claiming benefit, but yet the whole poiint of the business is to build up the capital – yet the business does not yet generate enough income to be completely self-sufficient on.

Many thanks for any thoughts

Anonymous

Comments

Mark Alexander

9:33 AM, 17th August 2013
About 8 years ago

Reply to the comment left by "Mick Roberts" at "17/08/2013 - 07:46":

Good morning Mick

If people don't want an honest opinion, why would they ask an open forum of their peers for their opinion?

Sometimes it's not easy to speak your mind, let alone commit those thoughts and words to writing. Any parent who has had to punish their own children will understand that it doesn't matter how right they are and how wrong their kids are, there will always be a feeling of guilt when they try to put their kids back onto the right track, especially if the kids get upset about it.

That's how I felt as a result of the emails that flew back and forth between me and the person who posted this thread last night. I had upset her - yes she's a real person with real feelings. She was shocked at my response and the advice that I had given. She now regrets the wording of her post is almost as annoyed with herself as she is with my "tough love" response.

To save her any embarrassment I removed all reference to her name from her post and the response comments. So far as I know she's still following the thread.

I can assure you this lady is no idiot, I can tell that from the emails she's sent to me. Nevertheless, I do still genuinely feel she had lost her way and despite feeling some anguish myself for being so honest about my feelings when I responded, I do still feel that I did the right thing and for the right reasons.

I sincerely hope this lady will listen to the advice that has been given here, not just by me either.

In hindsight I think I should have let a few other people comment first because my little outburst may have set the tone of other responses. We live and learn.

The bottom line for me though is that if a person has significant assets but due to their own choices they are struggling financially they should be expected to change their lifestyle and/or sell assets before expecting to be supported by tax payers. That's the way the system works, it's not just my opinion. If there was a National Referendum on whether this should change I very much doubt it would, do you?
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Mick Roberts

9:57 AM, 17th August 2013
About 8 years ago

Good morning, soon be afternoon-Any local Landlords coming for a run at 1230? Take the neighbours dog up some hills-U got to be blonde & fit though, so that’s all u dark haired males out the equation.

Yes, putting them words into writing often gets us in trouble, dun’t it. I found that out when I (on this site with a post) showed a house a tenant had wrecked & then I got slated for putting them in that house-Honest, wasn’t like that when I gave it them Mr Policeman.

Ooh, I don’t feel guilty about putting kids on the right track whatsoever, cruel to be kind, Gratification Postponement, & all that.

Hope she don’t get any of my tenants-Well, the 5% bad un’s, then she will be in the crap.
No Mark, don’t u think in hindsight, let us see your feelings at the beginning ha ha, good to see how the mind initially thinks. Especially the smart clever mind.

Yes, if people have assets, but are flying to Australia first class, then struggling, stop flying first class. But on the other side, I’ve just read again the headline post & it more or less tells me there’s a business there that’s not generating enough, so as in same as working person, if they don’t earn enough, they get working Tax credit, CTC, HB etc.
What’s the difference if u have 20 properties or 1 property, & overall, u r only earning £10pw? There’s’ a debate there. I know, I’ve been there, had 3 houses, load of cars, but some weeks, still earn’t no money, zilch, but outgoings on my own mortgage gas elec food bills to pay. Tricky one needs to be discussed over a meal or at the ski resort cafe at bottom of mountain, u not solve it on here.

Vanessa Warwick

10:01 AM, 17th August 2013
About 8 years ago

Mark,

I will always support anyone asking for help or anyone who is willing to *work hard* to find a better life.

Let us not forget that it takes courage to ask for help.

On another thread on here, you have a woman who has six kids who is getting £500pw housing benefit. That is more than the average wage in this country. My sister works a 40 hour week as a legal clerk, while bringing up her young son single handedly, and she earns significantly less than this.

Taking these two ladies, who do you think is more likely to be a net contributor to society?

If the lady in question is reading this, then I would like to remind her that real problems can ALWAYS be solved.

The beauty of a forum is that you will always get a variety of inputs. It is up to the individual to assess the information and advice shared, do some due diligence, and make an informed choice of what actions to take as a result of that advice.

Forums are here to help. No one in property should sit at home in isolation worrying themselves sick when there is a "hive mind" to tap into.

I wish the lady in the original post the best of luck in resolving her situation ... there will be many others in the same situation as her reading this, of that I am quite sure.

On a recent post, I suggested 12 positive actions you can take in property to move yourself forwards. I hope this might provide some positive input for the original poster of this thread and others who are feeling "stuck":

http://www.propertytribes.com/12-positive-things-do-today-break-property-investors-t-8361.html

Mark Alexander

10:12 AM, 17th August 2013
About 8 years ago

Reply to the comment left by "Mick Roberts" at "17/08/2013 - 09:57":

OK Mick, let's look at it the other way.

If a little old granny has £100,000 in the bank but only has state pension should she be allowed to claim state benefits for housing allowance etc.?

Of course not! She has £100,000 in the bank.

How is that any different to this scenario.

This poster has significant assets. Yes, her business in vulnerable and she's struggling. The state has decided that she needs to find work to fund her lifestyle or to liquidate her assets to correct the problem. That's no different to telling the little old granny that she needs to dip into her savings and that she's not entitled to benefits is it?

We can't have our cake and eat it.
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Mark Alexander

10:18 AM, 17th August 2013
About 8 years ago

Reply to the comment left by "Vanessa Warwick" at "17/08/2013 - 10:01":

Hi Vanessa

I also wish the lady in question the best of luck.

There have been some very good answers to the problem offered here IMHO. I can only hope that she makes the right choices and never has a genuine need to use the "safety net".

The best thing we can do for the poor is to get richer. That way we create more jobs and pay more tax. I wish everybody the best of luck on that basis.

PS - I will always try to help anybody who asks for help too. Sometimes they might not like the answer though.
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Mick Roberts

10:48 AM, 17th August 2013
About 8 years ago

Aah, I’m trying to get some work done Mark-U ever come skiing with me, & I’m knocking u over on the first mountain ha ha-That’s only if u r a good skier of course. If not, I will help u.
Little old lady, if it was up to me, yeah, because she may have saved hard all her life for that 100k, no holidays, no fitted kitchens, swimming pools etc. Neighbour might have blew her 100k, had great life, then when they’re both 65, neighbour gets help, other who been careful don’t get help-Don’t sound fair to me.
But no & yes, I get your drift & technically, 100k lady won’t get help ‘cause she’s got savings.

But Mr Language Practitioner (you’ll have to explain that to me one day), you will always be better with words than me on this site, I see this different, because WHO says the above post lady has 100k in the bank?
Who says she has assets?
When I first started houses, I had houses, but debt too. Each other’s definition of assets interpretation is different.
I get it now ‘Ooh loaded u r Mick’. I say to them ‘U have £2 million more than me’ . They say ‘How come?’ I say because I am in £2 million in debt with mortgages & u don’t have that debt so u r richer than me’.
I know that’s an extreme & a buy to let mortgage can be manageable debt, but in my eyes, I ain’t got any money till mortgages paid off.
But this lady may be down to the bone in assets v’s debt going out- I don’t know.

And I want my cake & eat it. Although I don’t eat cake.

I’ll give u some answers too if u want to work harder, yes IMHO route or HB tenants where the tenants sister brother Mum wants to move in & get rent for her too. Similar too IMHO, but no Council Tax problems to pay, plus one joint tenancy, plus ONE family unit, although two separate incoming rents, so could be less hassle than IMHO.

Mark Alexander

10:57 AM, 17th August 2013
About 8 years ago

Reply to the comment left by "Mick Roberts" at "17/08/2013 - 10:48":

I'm not saying this lady has £100k in the bank Mick, but by her own admission, selling one of the houses is an option she's considered. That implies that equity would be released. No different to the little old lady withdrawing her savings.

Little old lady could spend all of her £100k on fitted kitchens etc. couldn't she? Instead, maybe she's decided she wants to leave that money to her kids or use it to take the grandchildren to Disneyland every year. Point is, that's her choice, but she still can't have her cake and eat it.
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Mark Alexander

15:00 PM, 17th August 2013
About 8 years ago

Reply to the comment left by "Mick Roberts" at "17/08/2013 - 10:48":

BTW Mick, you are welcome to come to rural Russia with me any-time. My wife pays for us to go every Winter to visit family - their Christmas in Jan 7th so we get two! And if you are wondering why she pays, well she earns more than I do - not all stunning looking blondes are bimbo's you know 😉 Svetlana is a Chartered Management Accountant, she paid her mortgages off 10 years ago. Single Mum too, father of her son passed away. So there you are, now you know a bit more about me and my family.

It's harsh conditions in Russia at that time of year but great fun. I don't ski due to a back injury but that doesn't stop me having fun in the snow 🙂

You will be fine with us so long as our family pet likes you!

Russian Volkerdav - rougly translated Russian Wolf Killer

By the way - message for Vanessa. I do not approve of the circumstances of the lady in the other thread. I do worry for her children though as she clearly doesn't seem to realise that there is a very high likelihood that her kids will end up in care if she doesn't learn to budget. I think the government could help by helping her to prioritise, i.e. pay the rent direct to the landlord before any other benefits are paid to her. That way, at least the children would keep a roof over their heads and her decision then is whether to feed the children of spend £70 a week on cigarettes. I suspect she would make a better decision on that basis. At the moment she can't see that rent must come before everything else as it's always been paid for her.
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chris howells

21:49 PM, 17th August 2013
About 8 years ago

been in her position when I started out in 2001, took a career break had 2 houses with enough income to pay the mortgages and have a small amount left over.
Then tenants stopped paying rent, husband got laid off work. What did I do?, did not even consider help from the state, not with 2 houses plus my own.
I did what was necessary took any job i could find, cleaner, carer, ran a burger van, took in foreign students and guests who were visiting to watch the rugby basically anything to survive and pay my bills.
A year later back on my feet. This lady can go and get part time work or do anything to pay her bills. I agree with other comments welfare state should be there as a safety net, but not in this instance. If neccessary sell a house, she can always buy another later on.

Jay James

15:21 PM, 19th August 2013
About 8 years ago

Was this thread really a serious enquiry?

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Revised Right to rent requirments from 21st June