Titanic news: 90% of landlords decide to 'ride out' ice berg

Alan_M_2

dopester wrote: »

Because house prices may well crash to levels pre-1998. Why not cash in rather than ride it all the way down - but fine... let him get schooled by the market. Any outstanding mortgages? If so, you and he might not think so but even glory BTL-boy might be snogging negative equity before we are through.

Maybe you should just look out and see the carnage so many of the banks are in, and we now have the government making noises to show how fearful they are of the market proper (for gilts and bonds ect).

He has no mortgages on any of his UK properties. All his UK property was bought between '93 and '98 on 10 year commercial mortgages.

He's a builder, nice guy, very sensible and doesn't feel the need to surround himself with stuff, all his money is invested/reinvested. Many of the properties he bought as distressed sales and in a rundown condition, refurbed and let.

It's difficult to be in negative equity when you own outright.

These are nothing more than an income for him now that everything was repaid....He doesn't need to go to work but he's one of those chaps that doesn't have the ability to sit still for more than 10 minutes. He's one of the people that all this nonsense genuinely won't effect.

mower5

Alan_M wrote: »

He has no mortgages on any of his UK properties. All his UK property was bought between '93 and '98 on 10 year commercial mortgages.

He's a builder, nice guy, very sensible and doesn't feel the need to surround himself with stuff, all his money is invested/reinvested. Many of the properties he bought as distressed sales and in a rundown condition, refurbed and let.

It's difficult to be in negative equity when you own outright.

These are nothing more than an income for him now that everything was repaid....He doesn't need to go to work but he's one of those chaps that doesn't have the ability to sit still for more than 10 minutes. He's one of the people that all this nonsense genuinely won't effect.

Your mate has the ablity to sell his portfolio while prices are still relatively high and buy back in again in a few years. Why should he hold onto a sharply depreciating asset? If he sells soon he realises some of the past 10 years hpi, although he will have tax to pay on the gains.

islandannie

mower5 wrote: »

Your mate has the ablity to sell his portfolio while prices are still relatively high and buy back in again in a few years. Why should he hold onto a sharply depreciating asset? If he sells soon he realises some of the past 10 years hpi, although he will have tax to pay on the gains.

And exactly what safe options does he have to invest this cash asset before returning to the property market?

None as far as i am aware ,infact he could be in a far worse financial situation as things stand,with investments chaotic and savings rates dire he would be taking one hell of a risk.

I`m sticking with my portfolio because i think i`m making the best of a bad situation.

Mortgage free and the rents keep rolling in.

Suggest a better alternative?

mower5

islandannie wrote: »

And exactly what safe options does he have to invest this cash asset before returning to the property market?

None as far as i am aware ,infact he could be in a far worse financial situation as things stand,with investments chaotic and savings rates dire he would be taking one hell of a risk.

I`m sticking with my portfolio because i think i`m making the best of a bad situation.

Mortgage free and the rents keep rolling in.

Suggest a better alternative?

You are communicating with a complete incompetant, namely myself, all i would say is that everyone has their own acceptable level of risk/reward ratio. I believe the term used is Balanced Portfolio, This implies some cash some gold, some bonds, some shares, some commercial property, some domestic property. Only you can decide but one of the factors will be how close to retirement you are, the closer to god people get the more cautious they normally choose to be.

I would say that i see nothing special about renting out domestic property as an investment, surely it should be treated as all the rest of the asset classes. Sorry i have no idea which shares or bonds you should think about, maybe Savings & investment board could help.

socrates

I think islandannie should be commended for being mortgage free. Do not envy your tax bill though.

A number of cash rich investors are now providing sensibly priced bridge financing for mortgage free properties (7-8%) where the owners have cash flow problems.

You would be surprised - one guy inherited a house which he divided into bedsits its worth £450k. His money is all gone into refurb. He has no cash left to finish the job and can only borrow £16k!!! from banks due to redundancy.

Normal bridge finance companies want 10-12%.

He has found a private investor - who has given him £100k @ 7% (linked to BR) plus 1.5% arrangement fee. The investor takes first and only charge on the property. He cannot lose - if the guy defaults he takes the property.

It sounds cut throat but when the owner finishes the property his income can be around £40k.

JACKBLACK

islandannie wrote: »

So should i stick or twist?

You should be careful of the advice you receive on internet forums. Some posters who give out financial advice on this board are actually in their twenties and still live at home with their parents;).

Alan_M_2

mower5 wrote: »

Your mate has the ablity to sell his portfolio while prices are still relatively high and buy back in again in a few years. Why should he hold onto a sharply depreciating asset? If he sells soon he realises some of the past 10 years hpi, although he will have tax to pay on the gains.

Yup never been a better time to sell, houses flying off the shelves at Estate Agents.....:rolleyes:

Generali

islandannie wrote: »

Well I`ve decided to keep my property portfolio,it`s all mortgage free and provides me with a very hefty income.

Does that make me stupid?

Or can you suggest a better avenue for investment?

Index linked Gilts will return more in the medium term I suspect.

Having said that, if I was in your apparent position, I'd hold on to the asset right now unless you think you'll need or want to sell in the next 5-10 years.

napoleon

macaque wrote: »

Napoleon once described us as a nation of shopkeepers. He forgot to mention we were also stupid.



http://www.dailyrecord.co.uk/lifestyle/homes-in-scotland/2009/01/31/landlords-are-keeping-their-portfolios-until-prices-rise-86908-21085420

There are none so blind than those that see. By to let chancers allow naked greed to blind their judgement. They'll get their just desserts soon enough

Gorgeous_George

What is the problem?

There is a clue in the term buy to ***let***. (I've added a little highlighting to the relevant word for those of you are a little slow this afternoon).

I've just agreed to raise the rent by 7.1% while my mortgage payments have fallen by 64% over the last year. I must be barking to hold on to this dummy when I could sell up and bank the cash to earn 1.5% if I'm lucky.

GG