Friday, 11 June 2010

The Road to Freedom - How we did it

Do you own a Property Portfolio and your own house with reasonable equity, long for financial freedom and want to travel but fear is holding you back?

Speaking from experience my advice is to stop worrying and start planning. In this blog I will share with you some of our journey on the road to freedom.

First, this is not for people making substantial money from their Portfolio – they don’t need to read this. It is for ordinary people like us who have to be very strict with their finances. It is possible to travel, have fun and live on approximately £14-15k per annum but you need discipline and you must accept it will not be a Millionaire’s lifestyle.

Our property portfolio is mortgaged to around 65-70% LTV and I have a 10 year cashflow forecast on excel. Assuming mortgage interest rates of around 6% and building in contingencies for voids, unpaid rents & running costs it looked like the portfolio would remain £15k or more in the black for the foreseeable future.

Second, you will need to release yourself from any emotional attachment you have to your own home. We built our own home, a barn conversion which we loved but we really wanted freedom and this house was the key. We rented it out, took out a 65% Buy To Let mortgage, bought a Campervan, set aside £30k for contingencies and put the rest in a good savings account.

We spent the next 12 months travelling Europe and as long as you don’t expect to eat out much or buy too many material possessions you really can do it on a very tight budget and have the time of your life. We have been to some of the most famous cities in Europe and camped out on romantic beaches, swam in warm clear blue waters and made dozens of wonderful friends of many nationalities.

Third, you will need a list of good Trades people for call outs and maintenance issues with your properties. Preferably responding via email as this is cheaper, although our best Carpenter still refuses to email – but he is a gem so we accept the additional phone bills! If you can afford an Agent on full management then go for it. We have this luxury on our Student houses as the Agent achieves such good rents that he more than covers his fees but for the other properties we just keep a list of reliable Trades people at hand and leave spare keys with the most trusted people.

During our travels we have carried out minor building works to our properties, responded to electrical emergencies, water leaks, blocked drains, faulty showers, toilets, door locks and installed a new cooker.

Fourth, you will need to be very flexible with your living arrangements. In the summer of our first year of travels we returned and moved into one of our student houses whilst carrying out the annual clean up/maintenance. This is the first time we have lived in the buzz of a city and it was great to be able to walk to pubs, restaurants, theatres and shops for a change. Then, just before Christmas some tenants moved out of one of our other properties so we repaid the £170k BTL mortgage from our savings and moved in to this one, making this our Principal Private Residence - not forgetting to make the appropriate election to the Tax Man of course!

Since then we have remortgaged that house, let it out again and bought a renovation project which is now our PPR or ‘home’ if you prefer the term. Whilst carrying out the renovation we sold the campervan and bought a caravan which we store in France. It’s much cheaper to keep and gives us just as much freedom.

I am typing this Blog from a campsite in the Loire Valley with free wifi. I am sitting in sunshine, by a stunning swimming pool with a beautiful Louis XIIIth style chateau as a backdrop. Our Carpenter has just sent us photos of the new fascias, gutters, porch roof and fencing he installed for us on a property in our absence. We know that we can trust him to do a good job and he is proud that we trust him to do the works while away.

It would give us the greatest pleasure if someone else reads this and is inspired enough to ‘go for it’ – life is for living so live it.


Virtual Letz said...

Thank you so much for sharing your journey. It really is an inspiration. I am going to be tweeting this and facebooking it to all my friends. You are a great inspiration Jo! Thank you for reminding us all that we too can live the dream and make it real!

Jo King said...

And thank you for taking the time to read it Sam. I must find you on Facebook! (where I post much about our travels)


Mike and Marion said...

Well done,Jo. What an interesting read and we know just how much you manage to enjoy yourselves and keep smiling. Marion and Mike x

David GW Bartlett said...

Hi Jo,

Your post remind my of trying to maintain my properties whilst travelling the savannah's of Africa. I trust that telecommunications are a bit more prevalent in France though -- I remember having to canoe across the Zambezi river to get to a telephone to make a phone call once!

As you say, it is definitely possible to live on £14k p.a. Not sure whether this is your cost per person, or as a couple? We paid £12k p.a. per person, although this included a fair number of international flights.

One this I did miss though, was a persistent, reliable internet connection. Naturally, I'd argue that travel is a glorious thing, although I'd also argue that having a stable, comfortable home is also worth its weight in gold. The thing I missed the most? A sofa!

Jo King said...

Wow, David, your trip sounds a bit more adventurous than ours! Ours doesn't involve any flying (trying to never fly again to save planet LOL!) and I suppose we have the best of both worlds as we still have a nice home to return to and we take a caravan so all home comforts including sofa! We live on that much as a couple not individually.

telecommunications are improving but still not ideal, there are plenty of wifi points - when they're working!!!

MacDonalds' wifi helps a great deal but you can't eat burgers all the time!


Rich Vincent said...

Thanks Jo, very inspirational and look forward to reading more...

All the best


Jo King said...

Thanks Rich, glad you found it inspirational.