Is Buy-to-Let silly right now?

p00hsticks

nm123 wrote: »

What would you do? Is now a silly time to buy-to-let?

Regardless of the timing, I'd say no to option 1 simply because of the problems involved in trying to run a BTL from the other side of the world. It's all very well thinking that you'll get a 100% reliable management company in to handle it all (do you know one ?) , or rely on relatives, but that only works when things are going smoothly. As soon as any problems occur, you'll need to get involved and that's not easy when you're in Australia.

mlz1413

poohsticks beat me to posting excately the same opinion. B2L from any distance is difficult, from anyother country just not worth it.

Re moving in with parents when you get back, why not rent somewhere, gives you 6 months to get back home, see friends & family, start looking, find and buy a place. Remember if you did rent a place out there is no promise the tenancy would run excately to your dates and you would probably have to sort out alternative accomdation on your return anyway.

Gorgeous_George

GDB2222 wrote: »

George are you saying that you would happily pay three times as much now as you paid in 2001?

That's right.

I bought prior to auction for cash. The house was on the market for 6 months in a very sorry state with an asking price of £20K. I made a cheeky offer of £15K cash but settled at £15.5K and had the keys within 3 weeks. It took some time and a lot of work to put the house in order but the rent is now £5,400 per annum and it works well.

Coincidentally, I heard today that a similar 3 bedroom property in the same street is being repossessed (tenant just had a letter from the lender). I will be interested to see what it is marketed for and may make an offer. If the house is as bad as the garden it will be more work but I know two families who would like to be my tenants. The rent would be about £475 but I'd charge £425. So, what is the house worth? My rule of thumb says £42,500 to £47,500 (100 x monthly rent). The market value will probably be £80K if it is reasonable condition so will be out of my range. I just hope the tenant trashes it before he leaves (:whistle:) (only kidding).

GG

Rick62

You would have to be certifiably mad to buy.

You don't have enough for a deposit, you don't have funds to fit the place, you don't have contingency funds, you are going to be on the other side of the world so will be totally reliant on your (unknown) letting agent and property is expected to fall by another 20% plus in the next year or so.

GDB2222

Gorgeous_George wrote: »

That's right.

I bought prior to auction for cash. The house was on the market for 6 months in a very sorry state with an asking price of £20K. I made a cheeky offer of £15K cash but settled at £15.5K and had the keys within 3 weeks. It took some time and a lot of work to put the house in order but the rent is now £5,400 per annum and it works well.

Coincidentally, I heard today that a similar 3 bedroom property in the same street is being repossessed (tenant just had a letter from the lender). I will be interested to see what it is marketed for and may make an offer. If the house is as bad as the garden it will be more work but I know two families who would like to be my tenants. The rent would be about £475 but I'd charge £425. So, what is the house worth? My rule of thumb says £42,500 to £47,500 (100 x monthly rent). The market value will probably be £80K if it is reasonable condition so will be out of my range. I just hope the tenant trashes it before he leaves (:whistle:) (only kidding).

GG

Interesting to see what happens. Certainly, the sort of property you are talking about, with a price of £45k combined with a rental in the region of £100 pw, seems a reasonable letting proposition. I'll be interested to see if you can find that. Although the income is pretty good, you'd have to expect capital losses at least equal to the rent for the first couple of years, so you might be better off keeping your powder dry for the time being.

Conrad

The timescale is too short to risk. Note there will be buying, upkeep and selling costs to factor in. Rents everywhere are dropping as people let thier place instead of selling now.

Like George I'd also only invest if the yield after costs and those inevitable repairs was above 7%.

carolt

Rick62 wrote: »

You would have to be certifiably mad to buy.

You don't have enough for a deposit, you don't have funds to fit the place, you don't have contingency funds, you are going to be on the other side of the world so will be totally reliant on your (unknown) letting agent and property is expected to fall by another 20% plus in the next year or so.

I think that sums it up excellently.

Your call, OP - but don't say you weren't warned.

mystic_trev

There certainly is a 'spring bounce' in the Market at the moment. A house I was interested in todays Savills Auction had a guide price of £100,000. Sold for £139,000 At that price the net yield would still be just under 5% and the house needs at least another £10,000 spent on it, before it can be let!

besonders1

I suppose if you were intending to buy the house to live in and rent it out whilst you are away then it might not be such a bad idea but if you were buying as a sole investment then it could be one big mistake especially if you are buying with a mortgage.

TroJon

Really it boils down to how much you like this house...