3 Hurdles STOPPING you from getting on the property ladder 🏡 First Time Buyer & Landlord Experience
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So back in 2020, I purchased my first property,
And in this video I want to share the 3 hurdles I faced and if I regret buying along with detailed numbers.
Hopefully, this video can provide some useful information for those who are looking to get onto the property ladder!
Hurdle 1: Overcoming fear of all the bills and commitment to a property.
The first hurdle I faced was overcoming fear of increased outgoings and being tied to a property.
Before buying, I was living with my brother in his flat. Living with my brother after so many years had its up and downs. Eventually, I decided to move on and was renting a room in a house share, paying ****around £500 per month with bills included, so from that going to owning a place was a big decision!
As I would be looking at a monthly outgoing of £1000 after the mortgage payment and bills.
I always wanted to have my own place after leaving university, but I was just not sure of the location as I was at the stage of moving jobs & shaping my career. I also wanted the flexibility of travelling and living abroad.
So regarding the increased outgoings, 2 things helped me overcome this hurdle
First was becoming aware of Government Rent a Room scheme, which is the option of renting out the spare room and earning rental income tax free. Knowing this was helpful as it will help with expenses. This led me to later list my second bedroom on spareroom for £500 a month.
The other thing that helped me was knowing that with my mortgage payments I will be slowly chipping away at the mortgage and owning more of the property.
Regarding having the flexibility to move, understanding about an option that Mortgage lenders offer called ‘Consent To Let’, this is where the lender allows you to to rent out your property on your residential mortgage.
This is something I actually ended up doing when I got married, 15 months later after buying the property.
Hurdle 2: Not Knowing how much I could afford, and what price properties to look at.
Being a first time buyer, next hurdle was not knowing how much I could afford, and what price properties to look at.
My initial preference was for a house as I always wanted to have a garden,
But without knowing what I could realistically afford, it was hard to know which properties I could potentially buy.
So first thing I did was talk to a mortgage advisor to understand what I could afford,
and He helped me understand my affordability based on my savings.
My saving at the time were £25k,
and the maximum mortgage I could get based on my salary was £235,000,
those two combined I was looking at a maximum property price of £260k.
This really helped me shortlist the properties I could afford when browsing online.
Hurdle 3: Expectation vs reality of what I could afford and making improvements !
My third hurdle was coming in terms with the reality of the property market vs my expectations. As it would be the biggest spend of my life, I expected my first property would be a modern and polished place that I could move to from Day 1. Soon after viewing my shortlisted properties I realised that I will have to change my expectations if I wanted to be on the property ladder.
I viewed over 15 places in and around the area I wanted to buy in, this included a flat that was within my budget and ticked most of the boxes on paper.
But it was not a place I fell in love with at first sight. As it hadn't been well looked after and required a alot work.
But I told myself If I wanted to get on the property ladder I had to to focus on the bigger picture and manage my expectations. Most of the issues I saw were cosmetic and could be improved so I went ahead and bought the flat.
After a long legal process which I won’t bore you with, I received my flat keys. Following which I did redecoration and improvements before moving into the property.
With the help of my now husband Raghav, We did minor repairs such as filling in the cracks and painting over discoloured walls.
It was so satisfying painting over the old magnolia from 15 years ago to silk white, this brightened the interior and made a huge difference.
We applied wallpaper on one of the walls in the living room to give it a modern touch and also changed a few light pendants.
All of the DIY was new to me, so I really enjoyed learning new skills and seeing the final outcome.
Conclusion:
So you must be wondering, if after all the effort do I regret buying?
I would say no regrets so far,
- Whilst I was there I really enjoyed living at the flat, and decorating it to my liking
- I had more space for all my plants and was also able to host friends and family which was really nice.
- Having the lodger made the outgoings more or less similar to what I was spending at the house-share, before buying the property.
- here is the breakdown table of my outgoings when at house share vs at my own flat , if you are interested feel free to pause and read
- Since I have moved out, I have switched to a buy to let mortgage and currently rent out the flat full time, giving me a rental income of £1400, per month before deductions.
- If I contrast this situation to being in a house share, I think it worked out well.
- If I was to sell the flat based on the last valuation, after all deductions I will be left with this much. Please note this number is always changing with the market just like any other investment.
- It's definitely more responsibility, my year as a landlord could be a separate video on its own due to the learning curve. There have been various issues I encountered related to finding the right tenants and maintaining the flat, If you are interested in knowing more please let me know and I can share this in my next post.
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Thanks for watching ! 😃