BTL dreams go up in smoke

RomansProperties

Or you could look at in on return on investment rather than yield on property value.

If you put down a 30% deposit on the £52K house that would be £15,600
Leaving a mortgage of £36,400 @ 5.5% = £2002PA
Rental Income £450PCM *12 = £5400
Therefore profit before expenses = £3398
Or as a percentage of investment = 21.78%
You would need to factor in purchasing costs as well

andrewmp

Are the govt going to stop paying so much in rent to the BTL people?

!!!!!! houses, going for less than £50k and the govt are paying out £450 per month or more on rent. Nobody would pay that themselves but the govt do.

andrewmp

RomansProperties wrote: »

Or you could look at in on return on investment rather than yield on property value.

If you put down a 30% deposit on the £52K house that would be £15,600
Leaving a mortgage of £36,400 @ 5.5% = £2002PA
Rental Income £450PCM *12 = £5400
Therefore profit before expenses = £3398
Or as a percentage of investment = 21.78%
You would need to factor in purchasing costs as well

Nobody would pay £450 PCM rent for a 52k house. Not working people anyway, yes the DSS will pay it but for how long. Surely they will have to reduce the rent they'll pay the BTL brigade.

stevetodd

macaque wrote: »

For several years, BTLs turned into a swarm locusts and bought everything they could find. When people warned them about the dangers, BTLs responded with: 'I'm in it for the long term'. As business plans go, this makes about as much sense as investing in a three legged horse in the hope that a fourth leg will appear in time.

The more first time buyers complained that they could not afford a home, the more BTLs gloated about their 'portfolios'. The only problem was that the 'portfolios' actually belonged to the banks.

For a few years the country went stark mad with greed and stupidity. At one point Foxtons trumpeted that they had 80 buyers for every house on offer. Today Foxtons are in diffculties and house prices are falling like a stone. Today we learn that rents are also in free fall.

To all those idiots who thought they could have a free lunch by borrowing upto the eyeballs; my advice is to now go and get a proper job.




http://www.guardian.co.uk/business/2009/feb/25/rents-fall-amid-glut-in-lettings-market

I am in it for the long term why is that so difficult to understand? I suspect that you would not know a good business plan from a bad one, what businesses plans have you prepared yourself? As for your reference about 'get a proper job' I am (or rather was) a chartered surveyor, what job do you do? But getting back to 'in it for the long term':

My interest payments are now much lower than a year ago (and I was in good profit then) and my rents haven't fallen, I don't know where you get this rents in freefall notion from (the linked article is simply not correct as an average scenario, perhaps you should not accept at face value everything you read on the net).

Yes capital values have fallen about 20-22% (from peak) but they are still over 300% above what I paid.

It's mainly the short term speculators that are in trouble i.e. LL's who never did thier homework, the LL's in it for the long term I suspect are in a far healthier condition. I put it to you that you don't understand the difference of LL's that are in it for the long run and those that simply jumped on the 'bandwagon' who didn't get the microscope out to examne market rents, valuations and yields before buying

RomansProperties

andrewmp wrote: »

Nobody would pay £450 PCM rent for a 52k house. Not working people anyway, yes the DSS will pay it but for how long. Surely they will have to reduce the rent they'll pay the BTL brigade.

http://www.rightmove.co.uk/property-to-rent/property-11322435.html
They will

The new maximum weekly Local Housing Allowance rates for Leeds from 1st February 2009 are

• Shared accommodation £65.00
• 1 Bedroom accommodation £101.54
• 2 Bedroom accommodation £121.15
• 3 Bedroom accommodation £138.46
• 4 Bedroom accommodation £196.15
• 5 Bedroom accommodation £335.00

This type of investment can also be picked up in Middlesbrough
http://www.rightmove.co.uk/property-for-sale/property-18976472.html
I am getting £100 Per week for a house on the next street to this.
There is properties advertised cheaper than this.
Also in Middlesbrough the council is buying a lot of the property to knock down and re build the area.
This property on Albany street is staying so when the house over the road gets knocked down and a nice new house built this should increase the values of the remaining old houses.

Also while the council is in the process of buying up there is less houses to rent.

Usury_up_and_wear_it_out

I know plenty of BTL'ers who are doing OK, gov wont let rents fall because most of the MP's have rental properties themselves?

ad44downey

macaque wrote: »

For several years, BTLs turned into a swarm locusts and bought everything they could find.

To all those idiots who thought they could have a free lunch by borrowing upto the eyeballs; my advice is to now go and get a proper job.

May I say that it is beautifully put.

RomansProperties

Also where else is the government going to put all these people

stevetodd

ad44downey wrote: »

May I say that it is beautifully put.

But his whole arguement is faulted! It is the LL's that are in the business for the long run that are going to get through this, yet he is foolish enough to ridicule the 'in it for the long term' comment. He obvioulsy does not appreciate the difference between somone who does prepare a business plan for the long trem and someone who merely speculates in the short term.

lostinrates

RomansProperties wrote: »

The new maximum weekly Local Housing Allowance rates for Leeds from 1st February 2009 are

• Shared accommodation £65.00
• 1 Bedroom accommodation £101.54
• 2 Bedroom accommodation £121.15
• 3 Bedroom accommodation £138.46
• 4 Bedroom accommodation £196.15
• 5 Bedroom accommodation £335.00

When would these figures have been set?