Posted: Yesterday at 19:21
Dustin, I had a mortgage on an overseas property when I was paying around 6%. I was fortunate in that I had a B of E tracker on it.
I bought that once I'd paid off the mortgage of the maisonette I still live in. That took ten years, so no debt to pay on my primary residence.
I short slightly sold the property at the peak of its then market and banked the cash paying 8% just as the B of E started wiping out it's base rate.
So it was cash gearing if you like. The money borrowed ended up costing 0.79% and at one point it was paying me 8.8%. Even after the double tax agreement I was getting 7% net. So my mortgage paid (still does) me.
I'd have to have been a mug to repay that debt.
Thanks to mother dropping down dead I was able to buy back into the market. The tenant is happy enough and wants another two years at least. I've informed the letting agents not to increase the rent as long as he remains. As far as I'm concerned, as long as he doesn't destroy the place, its ok.
My view on Buy to Let though is that the tenant should have a % stake in of the increase of the value of the property, in which; after all, they are the one's paying, for the biggest one sided exploitive investment ever devised.
However, it seems I'm one of the worlds top 1% which is funny considering the most I ever earned in a year from employment was £22,300. (2003).
In the mean time, the Defined Contribution pension fund which I took out in 1988, now ramps up 10 times the rate at which I pay in. I was supposed to be a mug then when I paid in.
I guess that makes me a capitalist pig.
But better that than a victim of capitalism.
In mitigation, the only thing I wanted was security and time to do bugger all.