Struggling BTL Investors

islandannie

Generali wrote: »

BTL is just like any other business. You invest hoping to make a profit, if you succeed you make money, if you fail then you make no money or at worst go bust.

It is a service in much the same way that Pfizer or a debt collection agency or Sainsbury's provide a service: they provide something their customers need and hope to make a profit.

We need to have bankruptcy in a capitalist economy as there needs to be a formalised way to write off debts that are not repayable - the costs of negotiating and regulating each unrecoverable debt separately would be too high otherwise. That the penalties for going bankrupt should be more or less severe (eg debtors prison, public execution etc) is a different matter of course. My feeling is that the IVA system is too lenient on the debtor but I don't know enough about it to be sure.

Is an IVA any more lenient than laws which allow company directors to hide behind the bankruptcy laws?

Generali

islandannie wrote: »

Is an IVA any more lenient than laws which allow company directors to hide behind the bankruptcy laws?

An IVA is an Individual Voluntary Agreement (Arrangement?) whereby a debtor enters into an agreement to repay a certain proportion of their debt at a certain rate in return for some being written off. TBH, there are definitely bigger experts than me around esp on the DFW board.

islandannie

Generali wrote: »

An IVA is an Individual Voluntary Agreement (Arrangement?) whereby a debtor enters into an agreement to repay a certain proportion of their debt at a certain rate in return for some being written off. TBH, there are definitely bigger experts than me around esp on the DFW board.

As opposed to brankruptcy law which allows company directors to avoid the total of their debt.

edgex

What is a 'BTL investor'?
surely if you invest in something, you do something like buying shares, investing in a new business etc
this requires real money, not a BTL mortgage!



If someone has inherited a property, & lets it out, well then they arnt a BTL.
There will be quite a few of these about, & is probably set to grow, as more property owners reach old age & die.


Property letting is a business though:
you have to put money in to start a business, if you went to the bank for a business loan, they would be expecting you to be putting in funds, & have a business plan

Tenants should also be protected more:
they have a contract with a specified end date, usually a 12 month tenancy, whether the property is sold, repo etc, the new owner should honour the existing contract

Properties should have a minimum standard:
all let properties should meet minimum standards in terms of insulation, heating, general condition & maintenance etc

Generali

islandannie wrote: »

As opposed to brankruptcy law which allows company directors to avoid the total of their debt.

AIUI, the idea of an IVA is to allow people who can't service their debts to repay part and have the rest written off in a structured way. Many feel that people use them to run up massive debts and then avoid paying them back.

islandannie

No easy answer Generali apart from making everyone equally liable for their actions i suppose.

Anyway how,s life in your part of the world?

We Islanders will be down in that direction next month,a couple of weeks in Java a touch of the Gilis, lombok for a few days and then Perth.

dopester

Kenny4315 wrote: »

don't get me started on IVA's :mad: and BR's :mad: ........ they make my :mad: :mad: :mad: :mad: gnikcuf :mad: :mad: :mad: :mad: blood boil. They make me so :mad: angry :mad: I could turn into the incredible hulk. :mad: :mad:

:mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad:

Live the life of riley and just write it all off :mad: BAR STEWARDS:mad: . :mad: :mad: :mad: If you spent it PAY IT :mad: :mad: :mad: :mad: :mad: :mad: :mad:

You ought not read this thread in full then. Just when I didn't think many landlords could sink lower. I'm noticing a growing trend of BTLers with 10+ properties and now in trouble, blaming it on the properties being over-valued or over-priced, when they bought them. 10+.

Nothing to do with indulging in wild market speculation then, nor individual responsibility. There are two of just that thread with friends who have 10 properties each in negative equity, blaming it all on them being priced too expensively in the first place when they bought them. How many more of these ridiculous chancers with big property portfolios are out there. !!!!!!. :mad:

I have a friend who is in negative equity on his portfolio of 10 properties, all are currently rented and up for sale. He will not be able to sell the properties as they were over priced off plan deals. The rent doesn't come close to mortgages so he's losing money each month and now has no money left. He doesn't have a job (he laughably considered himself a property investor!)Is he entitled to any support from the council? he has 3 kids and a wife who doesn't work and will be evicted from his home in a couple of months. He will be going down the council to find out but it doesn't open until 5th jan. i thought some SPers might know and could put his mind at rest. Any ideas ?

The 'pub expert' (a carpet fitter!) said he should just take the rent, cancel the direct debits and stash it away. He could probably hold off the mortgage companies for 6 months in which time he could have saved £50-60k what do you guys think?

http://www.singingpig.co.uk/forums/1/671340/ShowThread.aspx

Generali

islandannie wrote: »

No easy answer Generali apart from making everyone equally liable for their actions i suppose.

Anyway how,s life in your part of the world?

We Islanders will be down in that direction next month,a couple of weeks in Java a touch of the Gilis, lombok for a few days and then Perth.

Of course not. The simple problems are solved, mostly by the Ancient Greeks I think (triangles, circles, beer etc).They left us with the complex ones. Bloomin' Ancient Greeks :mad:

Life's pretty sweet. We were out on a mate's catamaran on the harbour yesterday - took the dinghy to one of the city beaches with one of the Generalissimos for a bit then back on the boat for a nap.

Woke up feeling like a coffee and something sweet would go down a treat and about 5 minutes later the floating ice cream man chugged past. Result!

We had a BBQ and then watched the family fireworks at 9pm. Generalissimos in bed and then a bit of chat and some cake until the main fireworks at midnight.

We left about 1am and got ashore at about 3am (we had to use the ferry slip sneakily as the yacht one had a massive queue and it was all a bit of a nightmare as we'd had to borrow an underpowered engine). In bed at 4am and the Generalissimos woke me at 9am with a request for breakfast and asking whether we were out on the boat again today.

I've not been to Perth but I am led to believe that it is very nice indeed. Really lovely.

Generali

edgex wrote: »

What is a 'BTL investor'?
surely if you invest in something, you do something like buying shares, investing in a new business etc
this requires real money, not a BTL mortgage!



If someone has inherited a property, & lets it out, well then they arnt a BTL.
There will be quite a few of these about, & is probably set to grow, as more property owners reach old age & die.


Property letting is a business though:
you have to put money in to start a business, if you went to the bank for a business loan, they would be expecting you to be putting in funds, & have a business plan

Tenants should also be protected more:
they have a contract with a specified end date, usually a 12 month tenancy, whether the property is sold, repo etc, the new owner should honour the existing contract

Properties should have a minimum standard:
all let properties should meet minimum standards in terms of insulation, heating, general condition & maintenance etc

Well lots of people (most people?) invest in their own business using borrowed money. Most 'proper' investors would invest in UK shares using leverage (CFDs) as well for tax reasons. BTLers (for the most part) put in money to start with. Especially the reviled Amateur Landlord (TM).

My feeling also is that BTL should be considered and treated as a business by people getting involved.

The idea of an investment is pretty passive for me - you buy shares in BP and all they ask is that you vote at the AGM if you can be bothered. The Chairman of BP isn't going to call on Christmas morning asking what the flaming heck (or words to that effect) you're going to do about the boiler in Head Office.

AIUI, the AST must be honoured on repossession or sale. The obvious exception being (at present) being if the property has been let without the permission of the bank. Mortgage fraud should be investigated in such cases IMO.

seven-day-weekend

I haven't read the thread concerned and know nothing about economics, so tell me how a BTL investor going bankrupt will enable first-time-buyers to get on the property ladder?

In my own limited opinion, should hope that they can keep their properties which are providing a rented home for those who wish it.

I am not a BTL investor.