Master of Nunn (MoN)

Personal Notebook

a quick reference guide for MoN.

masterofnunn.co.uk

Lifestyle

Work to Live NOT Live to Work

So you have gone through the menu’s Organised yourself, got Healthy & Fit, checked out the best Investments and what to do with your Finances as well as careful Shopping now you want to maintain that lifestyle but more Play than Work and if possible Passive Income

I have heard so many people including millionaires turn round and say they have not achieved a clear Work to Live balance and are still on the treadmill working all hours. OK if you enjoy work but it is normally at a price i.e. your health, the family, your happiness etc.

Most people worked on the basis of retiring at 65 now 66 possible 67….. THEN I will enjoy my retirement, that is if you have good health, a good income or pension or you are still ALIVE.Plus can you enjoy Learning to ski, play tennis, run with the your kids err no I mean your grand kids because your kids are now a lot older and you have missed them growing up. So get out of the rat race whilst you are still active but don’t join another rat race like some of the above millionaires instead earn a Passive income i.e. Minimum work for greater Pay, Play & Free time. Now those three categories are important

Pay - obviously to maintain your lifestyle you need some form of income

Play - now you have the income but don’t get sucked in what you think you should be doing now i.e. Lady’s that lunch, go to the gym, personal trainer, diet, beauty parlour, spa, golf, nails, cosmetic surgery - your back on the treadmill but in a different guise however if you like that style of living good luck but it can become a bit tedious

Free time - and by that I mean your free time You Organise You don’t let other people rule you. Remember in Yoga you get rid of negative vibes, chimps or people obviously if you enjoy someone’s company then carry on but lead your own life.

I like to do What I like to do When I like to do it, without restrictions or monotony. Dip in & dip out when I want. That's why I prefer Property less work for greater reward in money/time. Look at some of the new generation of young entrepreneurs they earn millions by doing little work and even if they are working hard they enjoy what they do Youtubers, Instagrammers, Tweeters, Successful Wannabees, the kids think they are not going to be like their Mums & Dads working from a teenager for 45 years for 5-10 years of retirement before they die. They are living for the moment, Living the dream

Now you may not have any desire for the above activities but you would want a better Life to Work balance and one of the ways to achieve a better life is to try to make as many things automated as possible Here are just a few items that have or will make your life easier

Automation:-

Kettle, Microwave, Slow Cook, Steamer, Washing Machine, Dishwasher, Remote hoover, PVR eg SKY box, Smartphone to switch on appliances and for you to work anywhere, Contactless cards, Driverless cars - I will wait a bit before I get in one, Virtual Assistant (electronic) Siri, Google Ass’t, Amazon, Spellchecking & Speech recognition is saving me time on this document.

Personal Virtual Assistant, Maid, Gardener at www.plantsr432u.co.uk or Personal Shopper at www.SeekandFindit.co.uk or a house finder at www.SeekandFinditProperty.co.uk are human forms of automation that will save you time to enjoy yourself

 

Investment

WHY Property ?:

Top Returns On Investment (ROI) are

Property

Gold

Shares

Savings

Top Sunday Times Rich List - all are Property Investors of some kind

* You only need to deposit a percent to have 100% e.g. a 95% LTV mortgage means that you can put down £5k and have an asset worth £100k.

* If the property goes up 10% you have a £10k profit if you sell

* If you have shares, gold, savings you normally have to put down 100%

* If shares, gold, saves go down you lose - if property goes down you still have a roof over your head. MoN lost £5k when Northern Rock shares were declared valueless. MoN lost hundreds when a football club devalued itself by half.

WHAT Property?

+Research, Research, Research and the due diligence to avoid an expensive monetary mistake.

+Capital growth or Rental income

+Capital growth = Property value increases at a greater rate in certain areas nearly richer areas rather than poorer areas unless Regeneration is planned on a large scale

+ Rental income may mean buying up several cheaper properties but percentage wise they give >RoI

+ Be careful, that nice property on the marina may not be that ease to rent out and you are stuck with a large monthly mortgage repayment.

Scenario

2017 - Highest rental yield (investment/yearly rent) Manchester nearly 8%

If you have 1m to spend

Manchester property at say 125k x8 = 1m = Stamp Duty

Elsewhere property at say 250k x4 = 1m = Stamp Duty

London property at say 1m = Stamp Duty

Seems that Manchester wins but can you let all 8 or even the 1m house without occurring voids. There are so many scenarios & variable to consider to minimise the risk factor

WHEN INVEST ? - Yesterday unless recession or other major changes e.g. Remain/Leave Euro. Less Buyer's i.e. winter months

WHO WITH ? - Sole Proprietor for great profit; Partnership to spread risk and tax implications; Ltd company to give limited liability, spread risk & tax implications

WHERE ?

By the sea, 3 bed in nice area = UK £800k- Aboard £200k+ with pool = £200k+

WITH WHAT ?

+ Finance through family, partners, friends, credit cards

OTHER Considerations:-

Rent

Based on above UK 3 bed  (not incl fees, voids, damage, replacements etc)

£800k/75% LTV = £600k mortgage @4% BTL RATE=£24,000 p.a./12=£2k-£3k Monthly rent (Interest on rent can be 100% claimed back on a BTL mortgage as it is all interest based but it is now subject to recent tax changes) =0 - £1k profit per month less overheads.

The above is a nice simple Gross profit but don't forget

Overheads

Management's charges or Service charges will probably be high if it is a leasehold property or Listed then Letting Agent fees in the region of 10-15% if fully managed, Not forgetting unexpected replacements, damage, non payments, evictions if not fully insured and even then it may not be worth claiming (see your policy). Tax changes recently introduced will drastically reduce your profits - HMRC.

All will eat into your £12k profit to make it a Nett Profit but you should still be sitting on a tidy sum at the end of the year especially if house prices go up and increase your capital gain e.g. 10% on £400k is £40k less fees but remember that you have to sell it and then you lose the rental income.or work out if Let to Buy is an option.

Let to Buy e.g. London £400k house gives say £2,000 rent per month less above expenditure say £1k to be on the safe side, therefore with this rental income from your "old house" you can pay off your mortgage on your new house. remember though that the mortgage on your new house will probably be a repayment and hence you will have to work out the number of years you want, how much money to borrow (you may need to modernise the new property) to work out your monthly costs. also you need to factor in a deposit on the new property.

Finally don't forget the HASSLE factor you want a good life with passive income OK so you may grudge paying a letting agent commission but I would prefer them dealing with the angry tenant whose boiler has brokedown so cold water rather than me travelling to Manchester in the dead of night.

Also the tax laws have changed to make Buy to Let now difficult to make a decent profit beyond two property as a sole proprietor or partnership but again get a Independent Financial Advisor, Property expert or Accountant to give you good upto date advice, it may cost initially but normally pays dividends in the long run and they are doing the work not you.

 

 

Property