Is there going to be a scramble for properties????

socrates

confused31 wrote: »

I dont need to look ive just been on the savers forum and there are people advising savers to buy, buy to let properties already on there, take a look you may see some.

Im even considering doing it myself if houses come down 40%, i might take the risk and get in there myself just use the eqiuity i have got already from my own house.


Anyway your getting boring now, run along and do your own research.

How could you take the equity from your house if prices go down by 40%?

Put a couple of links up from the Savers Board where they are suggesting purchasing BTL's

confused31_2

stephen163 wrote: »

A few points I had in mind. This unprecedented fiscal stimulus will probably overshoot and translate into increasing inflation by 2011. The MPC will then put interest rates back up to between 5%-6%. Meanwhile, there will be more repossessions as mortgage payers are now more likely to miss repayments. The flood of new houses hitting the market will further depress/curtail house price growth and the economic misery of the previous 18 months has translated into lower rents. The subsequent 3 or 4 years will probably be characterised by slow recovery with interest rates at close to long term averages.

So, over the 7 years, your average interest rate on savings may well be closer to the 5% mark, giving a return on £100k of about £40k.

Worse case scenario the house falls 20,000 pound after a year i did state buy when the market has bottomed out,

Meanwhile, your £100k house has fallen to £80k (optimistic estimate) and your total rental income on a 10% yield has been approx £9k/year, or £63k over the full 7 years. Out of that £63k, you have had to pay all the usual costs of being a landlord, amounting to about £2k a year, or £14k over the 7 years (maybe more!). So you're left with £50k rental income and £30k profit after the £20k drop in house prices.

Worse case scenario the house falls 20,000 pound after a year i did state buy when the market has bottomed out. thats the risk , so say you buy the house at bottom price, make 50,000, but when the market does hit bottom, i will garantee you now 7 years on from then the house you bought for 100,000 pound will be worth a lot more.

So to keep it simple a saver buys a house for 100,000 pound when the market bottoms out(no one knows when this is, but lets just pretend they do)

Everyones waiting for houses to drop and most people are scared to jump in incase house prices fall even more, this includes savers and first time buyers.

Now the saver who is looking to invest for 10 years, not seven 10 years, even if it pays him 100 pound a week cash its more than what he his going to get from the banks.

Plus has he has bought at the bottom of the market, the only way house price will go is up so if he earns 48,000 pound in them 10 years he will still have a property that should gain in price.

Its risky but when you look at the data houses fall and then peak, i bought mine at the last drop and i paid 70,000 pound in 1999 now at its peak it was supposoingly worth 170,000 pound.

looking at these graphs if you looking to invest for 10 years and you are not to greedy if you get out at the right time a lot of money can be made.

http://www.moneyforums.co.uk/moneyforumstopic962.html

confused31_2

socrates wrote: »

How could you take the equity from your house if prices go down by 40%?

Put a couple of links up from the Savers Board where they are suggesting purchasing BTL's

Ive had my house 10 years, even if house drop 40% and my house drops to 100,000 i will still have over 55,000 pound equity has i only have a small mortgage.

Now the property i was looking at was on for 240,000 pound now if you take 40% off that it would be worth 144,000, so im sure i would get a mortgage with my equity.

infact if they do come down to them prices i will become a buy to let landlord, ive seen similar properties for mine go for 750 pound a month rent, if i can clear 600 pound that would more or less double my mortage payments on my current property.

And i will also have some to pay towards my new property, whilst keeping both houses.

socrates

Like I said before good luck with your new venture.

confused31_2

socrates wrote: »

Like I said before good luck with your new venture.

heres one post not saver,but in the saver section, but someone whos got some spare cash, you will have to have a look yourself.

http://forums.moneysavingexpert.com/showthread.html?t=1459113



I think i may speak to a letting agent and see what costs i will have to pay out, thats if i decide to rent my property out, i would love to do it, its just having the opportunity, but if houses do fall 40% my decision will be easy for me to make and i will be joining the btl landlords club.

socrates

That advice was to save for a deposit and then buy- not using a lump sum of cash to buy outright.

Please post some links that suggest using a lump sum at anytime peak or trough to buy a property for cash then let it out.

confused31_2

DiscoPaul wrote: »

Personally.. I would wait while the housing market continues to fall. Save for a deposit. Then buy when it's around the bottom, and let it.

the person stated they he had some spare cash and asked what they should do with it save or invest and someone said the above.

Look im not really bothered what you think you go and trawl through the savers post's ive showed you one.

socrates

they had £500 a month to spare not £100k.

Not a good example and not a saver saying they are considering using a lump sum to buy a property outright to rent out.

Anyway its been fun touching base with you and hopefully you will keeping us updated on your current yields

Ulfar

Being a LL is not easy money, there are intangible costs as well as the ones you have to budget for. Tenants can be a pain, as can letting agents.

You would have to be making a lot more than 10k a year in rent to make 10% profit. The tax bill alone will takes the rent up to over £12k to get 10% profit on its own.

The other expenses aren't small either.

I don't know many £100k properties that have a £1k rental figure.

socrates

Ulfar wrote: »

Being a LL is not easy money, there are intangible costs as well as the ones you have to budget for. Tenants can be a pain, as can letting agents.

You would have to be making a lot more than 10k a year in rent to make 10% profit. The tax bill alone will takes the rent up to over £12k to get 10% profit on its own.

The other expenses aren't small either.

I don't know many £100k properties that have a £1k rental figure.

Ulfar I have been trying to tell him that for hours - and if prices do come down by 40% so will rents so the equation will be the same and by that point interest rates will have gone up and savers will not want the risk.