Another twist to btl

dopester

Credit-crunch anecdotal emails from my Mum.

How cool is that? Trained.

He told me about all the homes he'd bought as investments and to do up. This house is one of his. I've passed it numerous times during the past 2 years and seen people working on it. Yesterday I noticed all the windows had been boarded up. It looks dreary and looks like all work has stopped.

And it is right in the area I want to buy in. An area where I've been constantly told will ride out the storm because of the mix of old-money and high-earners. Yeah right.

Trollfever

Risk/Reward.

Why bother with gross yields of less than 10%?

I can get a yield of 43.21% from Bradford & Bingley shares!

Gorgeous_George

Microstar wrote: »

Assuming someone is buying a property to let...

... but I thouight we were talking about someone selling a BTL (possibly to buy again later when the market has fallen).

For me, I bought for less than £20K in 2001, the rent is £5K per month (EDIT I wish! - it's £5k per year) and the property might sell today for £80K. Yield may well be 5/80 or 5/net profit or, for me, 5/20 as I'm here for the long term and the house is not for sale.

Rather than being just a pension plan, it forms part of my estate for my children.



GG

mewbie_2

Gorgeous_George wrote: »

..the rent is £5K per month and the property might sell today for £80K.

What the heck is that property - 60k a year income and only worth 80k. I'd buy it at double that price for that kind of yield. How can its value be so low?

Rabiddog_2

Thats a yield of nearly 75%! those figures look iffy... possibly £500 per month?

JonnyBravo

mewbie wrote: »

What the heck is that property - 60k a year income and only worth 80k. I'd buy it at double that price for that kind of yield. How can its value be so low?

5k/yr.... he means 5k per year

Gorgeous_George

Just making sure you are all paying attention.



GG

Cranston_2

I think yields should be based on current market values and not the original purchase price, thus with 3 month deposit rates around 5.8% and most rental yields around 4.25%, I think the truth is that almost every LL in the UK is subsidizing their tenant.

My personally view is that the gap between those % needs to narrow which will be more likely caused by a 25% drop in house prices.

brit1234

Next year will be the interesting one for buy to let landlords. Jan-Aug 2007 represented the highest price purchases. So those landlords on 2 year fixed rate mortgage who purchased back then will have not only a dramatic rise in repayments but also a 20-25% drop in property values.

I think that is when you are going to get the biggest landlord rent supplements.:eek:

lynzpower

brit1234 wrote: »

Next year will be the interesting one for buy to let landlords. Jan-Aug 2007 represented the highest price purchases. So those landlords on 2 year fixed rate mortgage who purchased back then will have not only a dramatic rise in repayments but also a 20-25% drop in property values.

I think that is when you are going to get the biggest landlord rent supplements.:eek:

Or the bigger amount of BTL repos :eek:

Some LLs siomply CANNOT afford to subsidise thier tenants.

Especially as they have to use the TDS and cannot just keep the deposits as they are a bit short