Will You Be Buying Or Selling In The Next 12 Months?

dander

al_yrpal wrote:

Its a pity we have this attitude to property, the only people who profit from it are speculators and inefficient builders.

I don't know why home-owners get so excited about housing booms either, it only makes a difference if you are selling and not buying. And with a lot of those transactions being after a death, big property prices pushes you up into inheritance tax brackets.

I have recently sold a flat I bought 10 years ago. I paid £36k and sold for £158k - big gains on paper, but that's all. All that so-called 'profit' goes into my next house, which has also soared in value since 1995. I only get further up the ladder from where I was by increasing my mortgage, just as I would have done if property prices had stayed where they were. Only now I pay much more to the estate agent, much more stamp duty etc.

nmiah786

dander wrote:

I don't know why home-owners get so excited about housing booms either, it only makes a difference if you are selling and not buying. And with a lot of those transactions being after a death, big property prices pushes you up into inheritance tax brackets.

I have recently sold a flat I bought 10 years ago. I paid £36k and sold for £158k - big gains on paper, but that's all. All that so-called 'profit' goes into my next house, which has also soared in value since 1995. I only get further up the ladder from where I was by increasing my mortgage, just as I would have done if property prices had stayed where they were. Only now I pay much more to the estate agent, much more stamp duty etc.

Dander

Very interesting point and I can only agree with you. Your right in the fact that on paper you made a £122k profit in 10 years but the next house up the ladder four you had also increased by the same amount. So its all relative in some sense.

However, had you been a BTL investor, on paper you would have made a very nice profit in 10 years (obviously you would have to minus your cost from that but it still would be a very handsome sum). Or imagine you sold your house and started renting you next place and left the money in the bank or some other investment vehicle.

Just a thought

al_yrpal

nmiah786 wrote:

Dander

Very interesting point and I can only agree with you. Your right in the fact that on paper you made a £122k profit in 10 years but the next house up the ladder four you had also increased by the same amount. So its all relative in some sense.

However, had you been a BTL investor, on paper you would have made a very nice profit in 10 years (obviously you would have to minus your cost from that but it still would be a very handsome sum). Or imagine you sold your house and started renting you next place and left the money in the bank or some other investment vehicle.

Just a thought

less:-
Insurance
Capital Gains Tax on 60% of gain at up to 40%
Repairs and maintenance
Mortgage interest not covered by rent
Letting agents fees
Buying and selling costs

Plus hassle factor

Yes it can work if buying in 1995, but more doubtful if you are buying today

nmiah786

al_yrpal wrote:

less:-
Insurance
Capital Gains Tax on 60% of gain at up to 40%
Repairs and maintenance
Mortgage interest not covered by rent
Letting agents fees
Buying and selling costs

Plus hassle factor

Yes it can work if buying in 1995, but more doubtful if you are buying today

Al-yrpal

I dont understand why you highlight the "hassle" factor into this. Running any sort of business is not completely "hassle-free"!!! Most BTL investors know there will be "hassle" involved, just like running any other business. I get the impression that you think most BTL investor or "herds" are in it because they expect a "hassle free" ride!!!

Also, you always pointing out the fact that mortgage interest is greater then the rent, how about the periods when mortgage interest is less then the rent!!

CGT on 60% of gain @40%....you have to admit there is still a fair bit left over after you've paid CGT on £122k gain!!!

dander

But of course, the reason properties were going for those prices back then was that very few people were buying.

The point is that there is a small minority of people who may have made investment purchases back when the market was bumbling along at the bottom. However, the majority of us are just people who buy houses to live in, and we don't really benefit from these increased property prices. My cousin paid just over £200k for a house in the mid 90s - if he wanted to buy that house now, he'd have to stump up around £20k in stamp duty alone!

Interestingly I pondered remortgaging my old flat as a buy to let, but as far as I could see the figures didn't add up - servicing the loan, plus maintenance, management fees etc, was barely less than I was likely to make in rent. Buy to let is fine if you're doing it with cold hard cash, but it's a shakier investment if you're relying on mortgages. I think if I'd bought an investment property a few years ago and watched the value go up in the boom, now would be the time I'd sell up and grab the cash. I don't pretend to be a property expert, but although I don't reckon there'll be crash, the boom appears to be over, so why not take the money and run!

al_yrpal

I mention hassle factor because I have watched pals and relations who have BTL's enduring continuing hassle. ie boiler breaks down on v cold night and you are off on skiing holiday next day. Solution=get emergency plumber and pay twice as much for boiler/repair that you would otherwise. Tenants boyfriend walks out, after tenant breaks leg and loses job unable to pay rent. Tenant justy b***'s off and disappears leaving property a stinking mess and tenantless.
Other money investments don't have this hassle, you don't usually make them with borrowed money and they are far less hassle!
- do you get the idea?

kinster_2

al_yrpal wrote:

I mention hassle factor because I have watched pals and relations who have BTL's enduring continuing hassle. ie boiler breaks down on v cold night and you are off on skiing holiday next day. Solution=get emergency plumber and pay twice as much for boiler/repair that you would otherwise. Tenants boyfriend walks out, after tenant breaks leg and loses job unable to pay rent. Tenant justy b***'s off and disappears leaving property a stinking mess and tenantless.
Other money investments don't have this hassle, you don't usually make them with borrowed money and they are far less hassle!
- do you get the idea?

lol, you don't do that yourself you know? You get other people or letting agents to handle this while you receive the passive income. Doing everything yourself does not necessary save you money.

Kenny4315

kinster wrote:

lol, you don't do that yourself you know? You get other people or letting agents to handle this while you receive the passive income. Doing everything yourself does not necessary save you money.

Yeah !! Letting agents my left leg, when it comes to the crunch the person legally responsible is the landlord, if there is a serious problem, then the letting agency tend to be as much use as a chocoloate fireguard. ie. tenant leaves without notice and they have no clue where or when, sure you have bond but often that does not cover everything. Tenants who refuse to move and don't pay, still have to be shifted via the courts normally even if have tenancy agreement.

How many letting agents are open 24 / 7 every day of the year, not many, and if the SH** hits the fan then the landlord can find himself with lots of hassle, even if he/she has a letting agent.

Kenny4315

al_yrpal wrote:

less:-
Insurance
Capital Gains Tax on 60% of gain at up to 40%
Repairs and maintenance
Mortgage interest not covered by rent
Letting agents fees
Buying and selling costs

Plus hassle factor

Yes it can work if buying in 1995, but more doubtful if you are buying today

At last someone talking some sense on a house price forum, and has appreciated houses at present are a risky and low return investment compared to shares, which to be honest for the last 2 1/2 years have been profit for old rope. I may have to go for a lie down. :money:

kinster_2

Kenny4315 wrote:

Yeah !! Letting agents my left leg, when it comes to the crunch the person legally responsible is the landlord, if there is a serious problem, then the letting agency tend to be as much use as a chocoloate fireguard. ie. tenant leaves without notice and they have no clue where or when, sure you have bond but often that does not cover everything. Tenants who refuse to move and don't pay, still have to be shifted via the courts normally even if have tenancy agreement.

How many letting agents are open 24 / 7 every day of the year, not many, and if the SH** hits the fan then the landlord can find himself with lots of hassle, even if he/she has a letting agent.

works for me, they have a 24/7 maintenance team/number that can be used... or I can use any other many maintenance services out there.

Don't tell me you do it all yourself? LOL