Joining the forces, best way to save money.. property?
Discussion
I'm joining the Royal Navy in April. Come the end of my training I'll be initially earning around £1200 take home per month which will rise with promotions/length of service. I'll be 27 with very little outgoings, likely less than £300 a month. I'm single with no kids or mortgage, so there is the opportunity for me to save a lot of money quite quickly. If I was going in at 17 I'd probably do something silly like buy a £20k car! Don't think I could justify that nowadays.
With other savings I'm about 2 years away from having £25k. I'm undecided to whether I should save for a house deposit, or just stick it in a high interest account. When I have saved enough (I guess I'll need at least £30k) I could get a BTL mortgage but to be honest I'll be worried about owning a property whilst I'm away and in some circumstances unreachable should problems arise. I don't have anyone who would be able to keep an eye on a property for me, and once all the fees and other accosiated cost's have been paid to agency's etc I'm not even sure it will be worth it. Given my situation I don't actually need a house and probably won't for years. Is my money better off elsewhere? Any advice would be appreciated. Cheers.
With other savings I'm about 2 years away from having £25k. I'm undecided to whether I should save for a house deposit, or just stick it in a high interest account. When I have saved enough (I guess I'll need at least £30k) I could get a BTL mortgage but to be honest I'll be worried about owning a property whilst I'm away and in some circumstances unreachable should problems arise. I don't have anyone who would be able to keep an eye on a property for me, and once all the fees and other accosiated cost's have been paid to agency's etc I'm not even sure it will be worth it. Given my situation I don't actually need a house and probably won't for years. Is my money better off elsewhere? Any advice would be appreciated. Cheers.
You are going to be doing well just to match the rate of inflation in a straightforward deposit account so not ideal.
Having said that it wouldn't be a bad plan to max your cash ISA allowance and also to look at a shares ISA. It doesn't need to be risky.
Property is probably the way to go. Just make sure that you get something that's easy to rent. Location / size appropriate etc.
You should be able to find a letting agent who will only take a percentage of rental income and not take a fee if the property is empty so it shouldn't be expensive and you'll easily cover the mortgage and ideally have a surplus on top. I know a few people with BTL and they have never really had a problem with getting tenants in. One has had issues with smack heads (but then their property is in Whitehawk, Brighton) so they kind of expect it and set aside an amount to cover the inevitable.
Having said that it wouldn't be a bad plan to max your cash ISA allowance and also to look at a shares ISA. It doesn't need to be risky.
Property is probably the way to go. Just make sure that you get something that's easy to rent. Location / size appropriate etc.
You should be able to find a letting agent who will only take a percentage of rental income and not take a fee if the property is empty so it shouldn't be expensive and you'll easily cover the mortgage and ideally have a surplus on top. I know a few people with BTL and they have never really had a problem with getting tenants in. One has had issues with smack heads (but then their property is in Whitehawk, Brighton) so they kind of expect it and set aside an amount to cover the inevitable.
Definitely get into property. Even if you start putting a bit away every month just keep saving and when you have a deposit, get a mortgage. You will find that you can get consent to lease with ease due to your job. Some mortgage companies will allow you to have more than one residential mortgage due to the travelling about.
Coming in soon is an update to LSAP (Long Service Advance of Pay). Basically you will be able to get up to 50% annual salary to help with a house deposit. You may have to wait a few years to be eligible but it's worth bearing in mind.
The biggest issue you could face is the big drinking culture; I'm not in the Navy but imagine there is a big scene in the service. Make the most of the social time but do everything in moderation. So many young lads piss their wages up the wall for years or waste it on the latest hot hatch.
If you are prudent you will be able to enjoy Navy life and also set yourself up for life by investing well. I know of a Sergeant (CPO equivalent) that has 30 properties!
Coming in soon is an update to LSAP (Long Service Advance of Pay). Basically you will be able to get up to 50% annual salary to help with a house deposit. You may have to wait a few years to be eligible but it's worth bearing in mind.
The biggest issue you could face is the big drinking culture; I'm not in the Navy but imagine there is a big scene in the service. Make the most of the social time but do everything in moderation. So many young lads piss their wages up the wall for years or waste it on the latest hot hatch.
If you are prudent you will be able to enjoy Navy life and also set yourself up for life by investing well. I know of a Sergeant (CPO equivalent) that has 30 properties!
I would agree that property is the way forward. Don't look at it from the perspective of earning a return year on year, as long as the rent covers the mortgage just think of it this way - you put down a 10% deposit and then rent it out for the next 25 years. At the end of the mortgage someone else has paid for your entire house, less the deposit, and you have £200,000 (lets say) as a retirement fund for an inital £15k deposit (allowing for some capital appriciation over the years).
p.s. as a member of the forces some mortgage companies will let you rent out the house on a residental rather than BTL mortgage as long as you say that it would be your primary residence if you weren't floating around the world in a big grey tin.
p.s. as a member of the forces some mortgage companies will let you rent out the house on a residental rather than BTL mortgage as long as you say that it would be your primary residence if you weren't floating around the world in a big grey tin.
sparks_E39 said:
Thanks. I wouldn't be in it for an annual return/profit and the idea of having it paid off on retirement is nice. Are agent fee's generally extortionate?
Depends on the area. If you mean lettings agents then shop around. Depends how much involvement you want and how much you're willing to spend.Remember, start saving ASAP..! (8 years in, started late but well on the way now..!).
You can get an agent who will offer a full mgt service. I think realistically it will be around 10% of the gross rent but you shouldn't have to worry too much. If you let them sort fixing anything that goes wrong to an agreed value before needing to contact you then the fact you are away and uncontactble for a period should not be a big deal.
sparks_E39 said:
Thanks. I wouldn't be in it for an annual return/profit and the idea of having it paid off on retirement is nice. Are agent fee's generally extortionate?
Your going to have to trust the agent to manage it for you while you are away. Having seen a few agents that simply don't inspect or live up to what they promise that might be a problem. A friend decided to get out of BTL recently (basically taking advantage of the current media hype and price subsidies caused by Help to If you are away and the repair is above the agreed value, your tenants are going to get mighty annoyed if they are without heating/hot water for days in winter while the agent tries to contacts you before getting the repair done. Of course a bit of bad luck; void periods, defaulting tenants, boiler repairs etc you can easily end up making a loss.
To me BTL always seemed like a load of hassle for not much return (backed up by a few friends, although I know one or two landlords doing really great, but they bought the flats in the late 90s when they were reasonably priced, they were bought as their first home, but ended keeping them to rent out as they could get 100%+ mortgages to buy a house to live in - so basically they were very lucky.
If it was me, I would get yourself a decent regular saver account (look for the best rate possible, not just in your own bank) and put a few hundred in a month, I don’t think anyone regretted having some money put aside for a rainy day, also your nice car might start to look decidedly mediocre on some bases.
Edited by GrizzlyBear on Wednesday 5th March 11:15
My old man was armed forces and himself and mother bought a house in the uk while we were in Germany, the agent turned out to be crap and it turned put to be a nightmare for them. Granted they bought at peak and sold when the market crashed in the 90s and the laws were different for removing tennents then but go in with eyes open.
If you get on with your parents maybe ask them to help out with managing the property.
A holiday let may be another idea. Somewhere to chill out when off leave but no prominent residence. Parents could stay every now and then and help out in return.
If you get on with your parents maybe ask them to help out with managing the property.
A holiday let may be another idea. Somewhere to chill out when off leave but no prominent residence. Parents could stay every now and then and help out in return.
As I've said to you before, I'm in the Marines. I have a house in Hampshire that we rent out and live in married quarters. The rent covers the mortgage and a little bit more on once our 8% fully managed agent fees are taken out. Most of whats left is put away for tax but repairs are paid for out of our own pocket or I do it myself. It doesn't really matter to me as someone else is paying my mortgage plus I go home to my family every night instead of a one man w
king palace.
Tenants are a lottery but the rent we charge probably rules out a lot of undesirables.
Some mortgage companies let you have a residential mortgage if it is your only house and you are in the forces. I am currently going through forces financial to remortgage to a lower fixed rate.
You don't come across as someone who would waste their money but I would advise on also enjoying yourself. When I was single I hardly ever went out on the piss or whoring. I joined relatively late and I was already losing interest in binge drinking unlike my younger colleagues. Currently I work with guys in unhappy marriages or those that married too young so it's a similar situation with me being the boring git again. I regret not doing it more now that I have a family.
On one early tour I had £26k in my savings so bought a new motorbike and a 10k car. I should have got a cheaper bike and a runaround instead putting the rest into a house.
I'd avoid buying in the typical matelot cities ie. Plymouth and Pompy. If you get based from Culdrose then Cornwall is nice if you fancy a holiday let.
I would avoid taking the LSAP as you are tied into the job until it is paid back. When you take it you may be content and keen to stay in but the day after you could wake up threaders with a post on here asking about oil and gas jobs.
Another option is to do 20 years living the champagne lifestyle living on the married patch with a succession of ordinary but nice cars. You'll either leave without a pot to piss in or cling on to your post with service extensions denying those below you any promotion opportunities. That does happen!
When I have time I will PM you with a list of benefits that they don't really explain to you when you join up.
king palace.Tenants are a lottery but the rent we charge probably rules out a lot of undesirables.
Some mortgage companies let you have a residential mortgage if it is your only house and you are in the forces. I am currently going through forces financial to remortgage to a lower fixed rate.
You don't come across as someone who would waste their money but I would advise on also enjoying yourself. When I was single I hardly ever went out on the piss or whoring. I joined relatively late and I was already losing interest in binge drinking unlike my younger colleagues. Currently I work with guys in unhappy marriages or those that married too young so it's a similar situation with me being the boring git again. I regret not doing it more now that I have a family.
On one early tour I had £26k in my savings so bought a new motorbike and a 10k car. I should have got a cheaper bike and a runaround instead putting the rest into a house.
I'd avoid buying in the typical matelot cities ie. Plymouth and Pompy. If you get based from Culdrose then Cornwall is nice if you fancy a holiday let.
I would avoid taking the LSAP as you are tied into the job until it is paid back. When you take it you may be content and keen to stay in but the day after you could wake up threaders with a post on here asking about oil and gas jobs.
Another option is to do 20 years living the champagne lifestyle living on the married patch with a succession of ordinary but nice cars. You'll either leave without a pot to piss in or cling on to your post with service extensions denying those below you any promotion opportunities. That does happen!
When I have time I will PM you with a list of benefits that they don't really explain to you when you join up.
dai1983 said:
As I've said to you before, I'm in the Marines. I have a house in Hampshire that we rent out and live in married quarters. The rent covers the mortgage and a little bit more on once our 8% fully managed agent fees are taken out. Most of whats left is put away for tax but repairs are paid for out of our own pocket or I do it myself. It doesn't really matter to me as someone else is paying my mortgage plus I go home to my family every night instead of a one man wking palace.
Tenants are a lottery but the rent we charge probably rules out a lot of undesirables.
Some mortgage companies let you have a residential mortgage if it is your only house and you are in the forces. I am currently going through forces financial to remortgage to a lower fixed rate.
You don't come across as someone who would waste their money but I would advise on also enjoying yourself. When I was single I hardly ever went out on the piss or whoring. I joined relatively late and I was already losing interest in binge drinking unlike my younger colleagues. Currently I work with guys in unhappy marriages or those that married too young so it's a similar situation with me being the boring git again. I regret not doing it more now that I have a family.
On one early tour I had £26k in my savings so bought a new motorbike and a 10k car. I should have got a cheaper bike and a runaround instead putting the rest into a house.
I'd avoid buying in the typical matelot cities ie. Plymouth and Pompy. If you get based from Culdrose then Cornwall is nice if you fancy a holiday let.
I would avoid taking the LSAP as you are tied into the job until it is paid back. When you take it you may be content and keen to stay in but the day after you could wake up threaders with a post on here asking about oil and gas jobs.
Another option is to do 20 years living the champagne lifestyle living on the married patch with a succession of ordinary but nice cars. You'll either leave without a pot to piss in or cling on to your post with service extensions denying those below you any promotion opportunities. That does happen!
When I have time I will PM you with a list of benefits that they don't really explain to you when you join up.
Thanks for that king palace.Tenants are a lottery but the rent we charge probably rules out a lot of undesirables.
Some mortgage companies let you have a residential mortgage if it is your only house and you are in the forces. I am currently going through forces financial to remortgage to a lower fixed rate.
You don't come across as someone who would waste their money but I would advise on also enjoying yourself. When I was single I hardly ever went out on the piss or whoring. I joined relatively late and I was already losing interest in binge drinking unlike my younger colleagues. Currently I work with guys in unhappy marriages or those that married too young so it's a similar situation with me being the boring git again. I regret not doing it more now that I have a family.
On one early tour I had £26k in my savings so bought a new motorbike and a 10k car. I should have got a cheaper bike and a runaround instead putting the rest into a house.
I'd avoid buying in the typical matelot cities ie. Plymouth and Pompy. If you get based from Culdrose then Cornwall is nice if you fancy a holiday let.
I would avoid taking the LSAP as you are tied into the job until it is paid back. When you take it you may be content and keen to stay in but the day after you could wake up threaders with a post on here asking about oil and gas jobs.
Another option is to do 20 years living the champagne lifestyle living on the married patch with a succession of ordinary but nice cars. You'll either leave without a pot to piss in or cling on to your post with service extensions denying those below you any promotion opportunities. That does happen!
When I have time I will PM you with a list of benefits that they don't really explain to you when you join up.
and to the rest of you cheers as well.I have been in the army since 2008 and joined when I was already with my now wife, we are about to have our third child and reached the point about a year ago that we could live on my wages alone so my wife's wages were all put into savings, admittedly we used a portion of it to upgrade the family runabout.
Our long term plan is to save this money and buy a house wherever we choose to settle when my eldest daughter is in secondary school so she has the stability for exams etc.
We have worked out that should give us somewhere around £20-25000 to use as a deposit plus the new LSAP if we decide to take it.
But I guess joining as a single sailor there will be other priorities, buying skintight leather trousers etc
Our long term plan is to save this money and buy a house wherever we choose to settle when my eldest daughter is in secondary school so she has the stability for exams etc.
We have worked out that should give us somewhere around £20-25000 to use as a deposit plus the new LSAP if we decide to take it.
But I guess joining as a single sailor there will be other priorities, buying skintight leather trousers etc
Cfnteabag said:
I have been in the army since 2008 and joined when I was already with my now wife, we are about to have our third child and reached the point about a year ago that we could live on my wages alone so my wife's wages were all put into savings, admittedly we used a portion of it to upgrade the family runabout.
Our long term plan is to save this money and buy a house wherever we choose to settle when my eldest daughter is in secondary school so she has the stability for exams etc.
We have worked out that should give us somewhere around £20-25000 to use as a deposit plus the new LSAP if we decide to take it.
But I guess joining as a single sailor there will be other priorities, buying skintight leather trousers etc
And dont forget all those weekends away at gay pride events.Our long term plan is to save this money and buy a house wherever we choose to settle when my eldest daughter is in secondary school so she has the stability for exams etc.
We have worked out that should give us somewhere around £20-25000 to use as a deposit plus the new LSAP if we decide to take it.
But I guess joining as a single sailor there will be other priorities, buying skintight leather trousers etc
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