We completed today on our 3 million pound early Christmas present to ourselves and now it is officially ours! Out of all the properties we have bought over the years, this definitely gave us the best feeling. We bought the house we were renting and now its ours. Our landlord wanted the property back and we really love this place and didn’t want to move out, so we offered to buy it.
Normally I advise never to buy where you live and to put your money into investment properties. It makes the most business sense to do so. But sometimes, once you have made it, it isn’t always about what makes the most business sense. However, buying somewhere that you are going to live in is a luxury, so only do so when your passive income can pay for it. Until then, put your active income into investments. Once you have enough passive income to buy a house, then you can decide if you want to spare that expense.
1. Cash Or Mortgage
So you are probably wondering whether I bought the house for cash or on a mortgage. With a net worth of £20 million, many people would assume I bought it for cash. But allocating capital that could be used for investments to buying a property to live in doesn’t make much sense. This is particularly true when interest rates are so low. Taking a mortgage from the bank at this point is almost like free money.
So what we did was we put down £1 million cash and got a £2 million mortgage. This means that our mortgage payments are lower than what we were paying as rent and we only have £1 million locked up in the property (as opposed to the full £3 million).
2. My Extra House
We have rented another house. This one is effectively my studio and is used for inviting my students, events and parties. We were having so many visitors coming around that it made sense to rent out another house just for the purpose. As a YouTuber, there are always a lot of people around and things that need to be filmed which can interfere with the smooth running of family life. Having an extra house for these sort of things is extremely helpful and is making things a lot easier.
We do still occasionally have students over to the main house, especially if we know them well personally, but most of the activity is now at the second property.
3. Plans For The Future
My wife is a bit of an interior designer so she is going to be making some awesome changes to the house. She is going to be changing the sofas; making over the rooms; putting in a new kitchen; and changing the downstairs flooring from wood to marble. It is going to look amazing once it is done. I think it will look like a whole new house in 6 months or so.
I am so pleased that we decided to buy this house. It was a personal decision, rather than a business one, but at this point in our careers it is something we can afford to do. I anticipate happily living here for years to come.
