Should I buy to let?

hethmar

I dont think people are talking about an "empire" winter, just a way of staving off a dire retirement in some cases, buying when prices are low the retirement home that they will need and can then release the large family home for another family.

Kenny4315

YOu should definitely rent, for at least another 9 to 12 months, to get a feel for where the bottom of the market is. Once it gets to the bottom it is not going to go up very quickly it will be fairly stagnant for a 2 years (ish) while before it starts the cycle again.

Kenny4315

Generali wrote: »

I suppose that's ok if the defaulter is a baby eating BTLer but .

Yummy, can I have mine with chips please, medium rare. I'll wash that down with a nice glass of Chianti

stevetodd

meester wrote: »

£1,000 annual costs on my property

.

I think £1,000 is very light, typically for a 2 bed flat I tend to allow £2,000 (and I don't use an agent) to pay for:

£850 service charge
£600 repairs, maint, gas safety cert
£350 redecoration, white goods, furniture sinking fund
£100 misc (post, travel, telephone, advertising etc)
£100 voids (low but I never seem to get any except when I redecorate instigated by me, between tenancies)

I also think you should allow about £8,000 for improving the flat (if it's bought at rock bottom price in an auction it will need work) i.e. redecoration, fixtures and fittings, new kitchen, laminate floors (unless the carpets are very good), good quality furniture and mortgage/utilities during the initial void when you do the work. It's just not worth skimping on these things as they will get you a better rent, better tenants and less rental voids. If you look after your tenants you will have far less hassle.

ad44downey

stevetodd wrote: »

I think £1,000 is very light, typically for a 2 bed flat I tend to allow £2,000 (and I don't use an agent) to pay for:

£850 service charge


.

In London that's more likely to be 2 to 3 thousand pounds per year

stevetodd

ad44downey wrote: »

In London that's more likely to be 2 to 3 thousand pounds per year

My flats are in London, battersea to be exact, although ours are run by a management co-op so cheaper, I would anticipate that this low value flat in Palace would have a comparatively low low service charge of less than £1,000/year but it is something he needs to find out in advance of buying/bidding. Also he should ensure that there are no forthcoming major works bills or planned work as this can be very costly.

Also my wife and I tend to do the redecorating work (every 4-5 years) ourselves with one paid helper, if he is going to get it done professionally that too would cost more.

dopester

wintersunshine wrote: »

NOW when same said posters are all considering getting a BTL empire. It's just greed - as I said no better that Krusty and Phil. In fact worse than Krusty and Phil 'cos you do get a sense that they are in it for enjoyment not just the money.

I set let them do it if they want. The banks and the country has no money. There isn't going to be some sudden house price boom when we hit the bottom of the market. If anything the deflation is going to last 20 years+ and bring house prices in many areas down to price levels that are hard for some here to imagine.

The house I'm in at the moment is probably worth £380,000. At the end of this crash I doubt it will be worth anything more than £60,000, and even then will be expensive as deflationary powers put more emphasis on the need to build sound financial assets for new generations and to rebuild banks capital balance sheets.

Conrad

Meester

Given the yield you expect and the 60% price reduction, it sound like a goer to me.
Buy to let mortgages on new builds are exceptionally difficult to obtain, and one factor that catches people out is lender group exposure per development (for example; if HBOS already has broad exposure accoss its various brands to this development, that could lead to a decline).

I'm in the same quandry right now.
I have recently pulled out of one flat as I got cold feet on the price at the last.

Those flats in London sound cheaper than anything I've found, any chance you could let me know the details, either openly or by PM, and dont worry I only want one property so there should'nt be a bidding war!.

Conrad

dopester wrote: »

I set let them do it if they want. The banks and the country has no money. There isn't going to be some sudden house price boom when we hit the bottom of the market. If anything the deflation is going to last 20 years+ and bring house prices in many areas down to price levels that are hard for some here to imagine.

The house I'm in at the moment is probably worth £380,000. At the end of this crash I doubt it will be worth anything more than £60,000, and even then will be expensive as deflationary powers put more emphasis on the need to build sound financial assets for new generations and to rebuild banks capital balance sheets.

C'mon dopester, this is going a bit far. You have failed to factor in the Human spirit and comparative investment yields into this. Yields will be outrageously high if your scenario comes to pass.
Having control your own space is a key Human driver, indeed the territorial imperative is within all organisms.

Even 6 years of WW2 didn't end the world as we know it. People dusted themselves off, and aspired, just as this will from this upheaval which is minor compared to WW2 in terms of impact on daily lives. If prices were going to fall for 20 years, then surely WW2 aftermath would have been the time.

stevetodd

Conrad wrote: »

Meester

Given the yield you expect and the 60% price reduction, it sound like a goer to me.
Buy to let mortgages on new builds are exceptionally difficult to obtain, and one factor that catches people out is lender group exposure per development (for example; if HBOS already has broad exposure accoss its various brands to this development, that could lead to a decline).

I'm in the same quandry right now.
I have recently pulled out of one flat as I got cold feet on the price at the last.

Those flats in London sound cheaper than anything I've found, any chance you could let me know the details, either openly or by PM, and dont worry I only want one property so there should'nt be a bidding war!.

I think he is talking generally based on previous auction results rather than a particular lot in a forthcoming auction