Hello and welcome back to Mortgage Advisor on F.I.R.E. This week I have exciting news as the purchase of our BTL completes. I will talk more about the property and share some photos of the property as we start preparing it for tenants. First, the Quote of the Week:
Quote of the Week
Schools are not fit for purpose, if you believe that purpose is preparing young people for life. Schools are there to prepare young people for exams, but hardly touch on taxes, or financial education. When I look back on my school years, I feel frustrated that there was not more emphasis on real life problems. I’m not just talking about financial and household education, but also on things like resilience, and the importance of looking after one’s own physical and mental health.
Another area in which schools fail is that they teach what children should think instead of how children should think, and it is this lack of exposure to critical thinking that leads to people believing what they are told without question. When I spent some time in the US, I was impressed by the emphasis on public speaking and debate that was placed on students. Now, the US system is far from perfect but I think this is one aspect missing from UK schools.
A thorough education should not just be about remembering facts. It should be a safe, supportive environment that teaches the next generation how to think and problem solve, and how to work collaboratively but also how to use one’s own initiative. I know that much of this should be learned at home from one’s own family, but not everyone is fortunate enough to have adults who have the time, energy and expertise to do this in addition to running a household.
A big week this week with my BTL purchase completing, and I will discuss this in more detail later in this post. I’ve not been able to get out as much as I would have liked this week for walks as I’ve not felt great. I’ve struggled with sleep lately, and in the mornings it is a struggle to stay awake. I’ve also been extremely stressed this week, dealing with incompetence from John Lewis, Nespresso and with various medical departments.
My issues with John Lewis have been touched on in recent posts, and at the start of the week we had an engineer come out to check the installation of the dishwasher. He was thorough enough, but we didn’t expect him to spend hours at our property. He could not find evidence of a leak, but as the leak only happens during a wash cycle we had no idea if it happens at the start, middle or end of the cycle, which lasts just under two-hours. Sure enough, at the end of the cycle there was evidence of a small leak, so it would appear it happens somewhere near the end of the cycle. The machine has a two-year warranty so we will just keep an eye on the situation.
Following this visit, I called John Lewis to arrange compensation as they directed me to on a previous call. They offered me £40 account credit, which I stated was “insulting” considering we had to take four days out for the various failed deliveries, and also considering the awful service experienced on the phone. I was eventually able to secure a £90 refund on the installation of the dishwasher which comes to approximately a quarter of the overall bill. I’m satisfied with this outcome as it was initially what I asked for a couple of weeks ago. John Lewis must have changed their policy, however, as I was told at the time that such a refund was “impossible”. Either that or they’re even more incompetent than I suspected.
In September I bought a new coffee machine from Nespresso. Anyone who knows me even vaguely will know that for me, coffee is life. I was disappointed when my new machine developed a fault after just a few weeks. On November 20th my machine was collected and a loan machine was provided for me. This loan machine was filthy though, as all water dispensed was cloudy and full of residue. I was told my repair would take “2-3 weeks”, and when I called to report my problem with the loan machine I was told my repair would be prioritised. I then heard nothing until I called Nespresso this Monday to be told they couldn’t find my machine. I was given £20 account credit as an apology and I was told I would hear something in a day or so. On Thursday I received an email apologising again, but no indication was given as to when I would receive my machine. After a further call, and then a call back from a manager, I have now been offered a brand new machine worth £90 which will be mine to keep, as well as a promise that my machine will be repaired urgently. This means that my coffee machine to room ratio in the apartment will go from one-in-six, to one-in-three which is a definite move in the right direction.
I’ve still not received any word back from my pill camera and trying to get an update is proving difficult as no one seems to know what is going on with the results. I’m also waiting on some blood tests to check various levels of the different medications I’m taking. These tests have now been rescheduled for the fourth time.
My shoulders are still hurting, and I’m not comfortable having physio whilst we are in the middle of a pandemic. It’s not just the fact I will be in close contact with the physio, but that I will have to travel there and back again, and mix with other people inside the hospital. I really don’t want to catch Covid, so I’ll just have to endure the discomfort in my shoulders for now.
I want to start reducing the number of drugs I take in the coming months as well, but I don’t know where to start. My cardiologist has said a few times that he expects I’ll be able to stop taking the three drugs I take for my heart, but it could be a little while before we do that. There are some drugs I will take for life, or until a better alternative is developed, and that’s fine. I’d just like to reduce the number of tablets I take daily from the current level of a dozen or more, to something a little more manageable. There are two main frustrations with taking this many drugs. The first is travelling abroad. If I go on holiday for two weeks around 200-250 individual tablets. I always get a little freaked out going through security with that many, despite it being completely legitimate. Then, there is the fact that some of my meds come in packs of 28 and some in packs of 30. Some tablets I take one-a-day, others two and three. As they have all been prescribed at different times or had dosages tweaked, my meds run out at different times. This means I’m collecting prescriptions on a weekly basis. I’ve spoken with the GP about aligning everything up, but due to the pack sizes I will just end up in the same situation again.
Premium Bonds: £2,000 (down £18,700 from last update).
Stocks and Shares ISA: £16,000.03 (down £1,371.70 from last update).
Fuck It Fund: £325.00 (no change from last update).
Residential Property Value: £187,554 (no change from last update).
Buy-to-Let Property Value: £124,500 (first entry).
Total Assets: £330,379.03 (up £104,428.30 from last update).
Credit Card: £0.00 (no change from last update).
Residential Mortgage: £141,740.98 (no change from last update).
Buy-to-Let Mortgage: £93,375 (first entry).
Total Debts: £235,115.98 (up £93,375.00 from last update).
Total Wealth Figure: £95,263.05 (up £11,053.30 from last update).
Investment Income in 2020: £185.90 (no change from last update) (target £2,000).
A lot of change in the last week. My Premium Bonds are heavily depleted by the purchase of the BTL, but that was the plan for those funds all along. I’m relieved to have something left over, which gives me a foundation to build on for the second BTL. The stock market took a hammering this week due to Brexit and the continued incompetence of the bumbling buffoon that is our Prime Minister.
Once Christmas is out of the way, preparations for the purchase of our second BTL begins. I’ve spoken with my investment partner about our plans and we’ve agreed that the second property should probably be a little less expensive. This first property was right at the limit of what we wanted to spend, but the property was such a great opportunity that we had to strike. For the next property, we are thinking of spending approximately £100,000. This means that we need roughly £30,000 between us to cover the deposit, SDLT and other costs such as the legal fees. The plan is to find a property by Easter, with us looking to complete by the end of Q2 2021.
Our first BTL
I first viewed this property in July, just a day after it had gone on the market. I knew it was the right property within minutes of stepping through the front door. It was obviously well looked after with just a few minor bits of wear and tear. The vendors were a married couple who had lived there for over twenty-years and were moving closer to where their grandchildren lived. Throughout the process they have been friendly and communicative. It was my pleasure to hand them a bottle of wine to crack open in their new home, and I wish them all the best with their new place.
The property is a three-bedroom house in a quiet suburb of Sheffield. There are two double bedrooms and a smaller box room. There is a large living room and a conservatory that the vendors had used as a dining room. There are a few cosmetic changes needed, but the total cost of this will not be huge. My research had suggested the property would let for between £650 and £700 per month, but the agent felt that £650-£675 was more realistic. Even at the lower end of the rental estimate, after all costs and taxes are paid, we should walk away with approximately £130pcm each, net.
It’s been a long road getting to this point and it’s a relief to have this deal done. Once we get the second property, there will probably be a little delay before the third property as we secure funds for that deposit. At which point we should be in a position to look at refinancing the first property to release some of the equity to put towards the fourth property, at which point the process starts to gain momentum.
A Quick Request
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Finally, have a look at Darren Scothern’s blog at darrenscothern.com.