STRETCHING OUT TO A BRIGHTER FUTURE
Claude and Michaela Farren (above) admit that they have always stretched themselves and lived beyond their means to get where they are.
"If we had simply existed on my wages as a shopfitter, then we wouldn't have the house or investment we have now," said Claude.
But two years ago, he gave up his work to concentrate on building up a buy-to-let portfolio, which now encompasses 11 properties in the Tyneside area. He completed on his most recent flat at the end of February and said he is not concerned about property prices dipping in the short term.
"We have no plans to sell in the next 10 years or so. These flats are our financial future."
Claude said they would not have been able to have bought the properties without Michaela's regular income. She worked as a dance teacher and recently bought a stage school, which has provided a stable income for the family. They let their properties mainly to students and young professionals.
Claude added: "In some ways I feel wealthier than I ever have, but the cash flow is always tight. We obviously have large debts to service."
The couple have more than £1m in outstanding mortgage debt, most of which is on an interest-only basis. But Claude said that the monthly mortgage costs are met by the rental payments. These repayment costs should continue to be "comfortably covered" by the rental incomes.
"This should give us a cushion, even if interest rates rise," he said.