Buy to Let now...or wait a year??

shellbell63

We have a couple of properties we rent out locally & are wondering whether to snap up a few more now or sit tight a while. If we go for it now, we'll be looking for a 'bargain' ie no intention of paying anywhere near asking price...but

1 - those who are buying now - what 'deals' are you looking for ie 20%, 25%, 35% off??

2 - those who are waiting - when do you anticipate buying?

We're in the south west sn15, sn3 kinda area. We've always gone for 2 beds that we can manage ourselves, but open to anything rentable if money to be made as they say.

Just wondered whether others are buying now or still waiting?

slipthru

I would defintely wait and see how the Economic situation pans out as it is only just beginging.

How do you plan to fund this buy to let?

shellbell63

Well we have funds to buy outright. But probably go with part mortgage. As I say, we're not gonna buy at current values, only if theres a deal to be had, as they say.

boyse7en

shellbell63 wrote: »

We have a couple of properties we rent out locally & are wondering whether to snap up a few more now or sit tight a while. If we go for it now, we'll be looking for a 'bargain' ie no intention of paying anywhere near asking price...but

1 - those who are buying now - what 'deals' are you looking for ie 20%, 25%, 35% off??

Why do you think that getting 25% or 35% off of asking price constitutes a bargain? The asking price may have been unrealistic compared to similar properties in the first place.

Surely a bargain BTL property is one where the income is greater than the outgoings, so you are actually making a profit each month and not relying on HPI. You could quite easily get a deal of 10,20 or 30% off the asking price of a property and still not make any profit – which certainly wouldn't be a bargain in my book.

If you can do the calcs (taking into account all costs) and make a profit then why wait? If on the other hand the figures don't stack up then invest your money elsewhere until they do.

slipthru

shellbell63 wrote: »

Well we have funds to buy outright. But probably go with part mortgage. As I say, we're not gonna buy at current values, only if theres a deal to be had, as they say.

I would still be inclined to wait, ask yourself how you would feel if you paid lets say, £100,000 for somewhere and in a couple of years time it was only worth £50,000.

Thats worst case senario but and it is entirely your choice but i think even if you get 15%- 20% off now it will not insulate you enough from price drops.

carolt

No - I think you should definitely buy now.

Why wait?

Buy up whole streets!;)

shellbell63

boyse7en wrote: »

Surely a bargain BTL property is one where the income is greater than the outgoings, so you are actually making a profit each month and not relying on HPI. You could quite easily get a deal of 10,20 or 30% off the asking price of a property and still not make any profit – which certainly wouldn't be a bargain in my book.

I know the economics of BTL - I've done it before. And because we look in our area, I know the difference between, what is current market value & an inflated asking price. I'm not gonna pay asking price less say 25%, if asking price isn't in line with similar property prices, as that wouldn't be getting 25% off would it.
Its more a case of how far peoples crystal ball thinks we've yet to fall. If say the bottom is likely to be 25% less than current market value - then buying at this kind of discount means we won't lose any money we've put in.
If however all bets are off & it could be say 50% drop, then waiting a year is a much better option.
Just wanted to get a feel for opinions/actions of others in same market.

IveSeenTheLight

shellbell63 wrote: »

I know the economics of BTL - I've done it before. And because we look in our area, I know the difference between, what is current market value & an inflated asking price. I'm not gonna pay asking price less say 25%, if asking price isn't in line with similar property prices, as that wouldn't be getting 25% off would it.
Its more a case of how far peoples crystal ball thinks we've yet to fall. If say the bottom is likely to be 25% less than current market value - then buying at this kind of discount means we won't lose any money we've put in.
If however all bets are off & it could be say 50% drop, then waiting a year is a much better option.
Just wanted to get a feel for opinions/actions of others in same market.

You seem to have you head screwed on and I understand that you would want to buy now if you believe you can purchase the property for what the value may drop to. You'd be buying at the bottom of market prices but beneffiting from rental yield now. Unfortunately this is speculation, you could get it fantastically correct, but you could also get it wrong.

Unfortunately guessing how long or how far properties may drop is a bit of a crystal ball, no-one knows although you will get a lot of people on here who you tell you they know the future.

According to this (http://www.hbosplc.com/economy/includes/25_07_08Affordability.xls **NOTE** at the end of the month the Q3 figures should be available so check out again then) affordability in the South West is 6.19 so theoretically, there's still a bit to drop. Many people believe that a return to 3.5 times salary is a reasonable affordable limit. This would mean a further 43% drop. I tend to believe the market has changed and 4.5 times is a more realistic affordable level and therefore would guess maybe still a 27% drop.

These are all just guesses though

I too have a couple of BTL's so am looking for the same oppertunities as yourself. I'm not buying at the moment as I am resolved to reducing my risk, but if the right oppertunity came along, then I would not be against buying, even in this climate

HammersFan

I would add into the things to consider how long you want to hold the property for. A time window of 3+ years would give you additional insulation against any further falls.

Lotus-eater

Surely it doesn't matter if you get 25 or 50% off, if the %age profit margin on the house is right/wrong, Thats what you should look for in a BTL?
We're all guessing the market still has a long way to fall and its looking worse every week really, but you will never know the right time to buy by looking on a forum. DYOR

Its takes genius or luck to catch the very bottom of a market, normally the latter.

Max_Headroom_3

shellbell63 wrote: »

I know the difference between, what is current market value & an inflated asking price. I'm not gonna pay asking price less say 25%, if asking price isn't in line with similar property prices, as that wouldn't be getting 25% off would it.

But what if all the other asking prices are 25% too much?

There's your problem, all you've got to go on is asking prices, which aint necessarily much of a guide at the moment.