A lot of people my age are currently saving up for a house deposit so that they can get onto the property ladder. I have previously mentioned why we not in a rush to buy a house, and one of those reasons is that I already own a property that I rent out. Many of you expressed an interest in how I managed to purchase a house when I was 18 years old, so I thought I would share the story with you in collaboration with the Post Office and their Gratitude Bank.
The idea to buy a house for university was something that my parents had been considering for a few years. My parents were by no means rich – when I was 13 we lived in a homeless hostel for about 6 months. My parents wanted to see if it was at all feasible for me to buy a house for university and rent out the extra rooms in order to pay the mortgage every month. That was 11 years ago and I still own the property today.
Owning a house has not been cheap, nor easy. At university I was constantly broke, my overdraft was maxed out before I even started the term from having to furnish the house, and the house was very basic – central heating older than me, a shower that didn't like working properly and décor that makes me cringe. However, it was my house! It is only recently that I have managed to turn it into a profitable rental property, earning a passive income on a monthly basis.
Location Location Location
Keeping costs down was the biggest driving factor here – I went to university in Chester where houses are considerably cheaper than they are in Cambridgeshire. I chose an ex-council property, meaning that I got a bigger and better quality build than I could have afforded elsewhere, but it was also in a less than describable location. After I graduated I tried to sell the house and it sat on the property market for years before I came up with the money to renovate it and accept tenants.
Getting a mortgage was easier back then
I remember applying for the mortgage in avid detail. I walked into the bank with my mum, we sat down and I told the banker that I had planned to rent out the extra 2 bedrooms and the amount that I expected to make from the rental income. And that was that. You wouldn't dream of anything so simple these days – they based the mortgage on the projected income that I told them.
My parents helped to get on the ladder
This is terribly cliché, but my parents helped me out massively when it came to purchasing the house. They loaned me the lump sum for the house deposit, which was 10% of the purchase price of the house. My Dad was also a guarantor on the mortgage, which meant that if I ever had difficulty paying it, he would be financially responsible.
It was a lot for them to do for me and I am eternally thankful that this was possible. I can't imagine the hard work that they put in to be able to do this for me.
Nowadays, six in ten parents will provide some financial assistance when it comes to helping their children to purchase a home. Whilst I was extremely blessed to get financial support from my parents, there are plenty of other ways that parents are helping their children out. 61% of parents are helping their children to get on the property ladder in other ways, ranging from letting them live rent free to helping out with childcare.
— Emma Drew (@emmadrewinfo) October 20, 2017
It hasn't all been sunshine and rainbows
Some days it feels as though property ownership has been an uphill struggle. If I had my time again I am not sure that I would purchase a house aged 18. The biggest impact has definitely been financially – after I graduated I was unemployed for a year so I had to rely on online earnings to get by, and my online income wasn't even a tenth of what it is now.
When I did finally get a job, it was part time and barely above minimum wage. The house was empty but still the council tax and mortgage had to be paid, and it just wasn't shifting on the property market. All of the offers I received would have left me in negative equity and it was a long struggle to be able to put the money together to be able to carry out much needed refurbishments totalling over £10,000.
I was lucky enough that the house was rented out before the renovations were even complete, and I have had happy tenants in situ ever since.
I am so grateful to my parents helping me out – I could not have done it without them.
Your chance to win one of 15 prizes of £1,000
In order to recognise the help that the Bank of Mum & Dad, Post Office have launched a competition where you can win one of 15 cash prizes worth £1,000.
If your parents have supported or are supporting you getting onto the property ladder then you should enter Post Office Money's Gratitude Bank competition, giving you the chance to say thank you to your parents for their support.
Entering is really easy – if you have received support from your parents, whether it was financial, advise or letting you live at home rent free, then visit the Gratitude Bank to see how you can enter.
There are 15 cash prizes of £1,000 available, and the competition ends on 30th November 2017, so get entering.