Buying properties for investment

Tassotti

You are correct. From recent cyclical history, every crash has come about 27% drop in prices. Wow, good news for FTBs., but then a recession has occurred...bad news for everyone.

Put your BTLs on a fixed interest, and make sure the rent payments cover the mortgage. No worries.

Borrowing money has always been the way. eg if you are going to buy a new family car for about 25K, do you think oh, I'll just dip into my pocket and pay for it, or do you borrow the money and pay it back?

So, the country has huge debts...its inevitable. Unless the situation reverts back to 40 years ago, everyone has to borrow money.

The trick is to be clever with it, and use other peoples money to buy whatever you want to buy, make sure the money you receive covers the costs, rise through the "crash" and come out smiling.

Tass :beer:

sukey13

van_persie wrote:

Sukey13, there is a shortage of AFFORDABLE housing in this country. If there was a 'physical' shortage, why aren't there people living in tents?
And why are there SOOOOOO many properties for sale?
On Hometrack alone, over 633,000...
New-builds are going up and standing half-empty because there's so many of them.
This link may be of interest:
http://portal.telegraph.co.uk/property/main.jhtml?xml=/property/2005/12/17/pempty17.xml&sSheet=/property/2005/12/17/ixptop12.html

And to say the economics aren't right for a crash is incredibly short sighted.
Do you think housing is not over-valued?
Do you think IRs will not go up?
Do you not agree that the market is cyclical and cannot go up forever?

But then your last line gives you away...a crash would be catastrophe for investors, wouldn't it?

They aren't living in tents, they are more likely living at home longer, or moving back in with parents, staying with friends.

There is lots of property for sale. People die, relocate, move up the ladder, downsize,etc. every day.

The "new builds" you are talking about are the expensive loft type "luxury" apartments. Round here they are building swathes of new housing. They don't stay empty they are fiercely sought after by those that like new property.

No I don't think the housing market is overvalued.

No, I don't think IRs will go up.

I don't think the market is going up at the moment. I think it has levelled off. You should always buy below market value anyway. Unless you are a millionaire.

A crash would be fantastic as I wouldn't be selling, I would buy as many more as I possibly could. The rate would have to go back to pre 2000 levels for my buy to sells to lose any money. Then you only lose money if you sell, so I would rent them out. Because, even if there was a crash and property there would still be those that wanted to rent in case the market fell any more.

sukey13

wibble68 wrote:

Is it that time of the month already?

What is your problem mate - can I not express my opinion?
Do you want me to hide my identity like so many on here in order to not be discriminated against?

sukey13

sm9ai wrote:

We are not really that much different to the last crash.

There is definatly not a shortage of housing. But with all the new builds going up there is a surpless.


Looking at your signature I can see why you have your point of view, interest rate rises would push your outgoings through the roof and do little for your income.

One other thing to note.

"How many multiple streams of income do you have?"

Surely you just have one, and its property. If house prices crash it will effect all your "streams" not just one.

I don't have one stream of income.

I own a letting business, have a portfolio of property, have a property development company and create money on the internet through internet marketing.

What do you have? A job?

Why do people like getting sooo personal on this board? It never use to be like this on here.

With my "investment" property - property I keep for cashflow. I buy below market value so I can get most if not all my cash back out. Then the property also has to put money in my pocket after all costs (building insurance, etc). Or I create value and get my cash out that way.

So I wouldn't lose anything. They are all on fixed rates.

We even have spare rooms in our house we could rent out. We had lodgers at one point almost covering our mortgage.

There is a shortage of affordable housing in the UK.

http://www.southwest-ra.gov.uk/swlga/swbulletin/2006February.shtml

This is just one article for my area.

van_persie

Sukey13,
Sorry about comments others have posted - it's not necessary.
I just like to hear what property investors think right now without the sniping and you present a compelling case.

Glad you agree that there is a shortage of AFFORDABLE housing, however, the fact that you think housing is not overvalued is somewhat contradictory and puts you at odds with virtually every economist in the UK; the market is cyclical and has never 'levelled off'. It's up or down, I'm afraid.
Just out of interest, if you believe prices have levelled off, what would your yields be with 0% capital growth?

Why do you think IRs will not go up? I am genuinely keen to know why.

And why should being a millionaire make you go out and buy property at today's crazy prices? If I had 10 million I wouldn't put a penny of it into property right now - there are many more investments with better returns right now.

From what you are saying, it would seem that many of your investments were made pre-2002, which should help you ride out any price correction without dipping into negative equity, (assuming correction of around 25%). Am I right?

Have a good day...

eurows

I don't have one stream of income.

I own a letting business, have a portfolio of property, have a property development company and create money on the internet through internet marketing.

What do you have? A job?

Why do people like getting sooo personal on this board? It never use to be like this on here.

With my "investment" property - property I keep for cashflow. I buy below market value so I can get most if not all my cash back out. Then the property also has to put money in my pocket after all costs (building insurance, etc). Or I create value and get my cash out that way.

So I wouldn't lose anything. They are all on fixed rates.

We even have spare rooms in our house we could rent out. We had lodgers at one point almost covering our mortgage.

There is a shortage of affordable housing in the UK.

http://www.southwest-ra.gov.uk/swlg...6February.shtml

This is just one article for my area.

It is simple why you think property is the only way forward.

You lack intelligence.

Any fool can borrow money and rent out houses. We will see where all these fools are when IR's go up and house prices fall.

The clever money left property last year and probably made a mint on the stock market. The fools are still there proping up a soon to fall market. The trouble is the fools don't know what to do next.

wibble68_2

sukey13 wrote:

What is your problem mate - can I not express my opinion?
Do you want me to hide my identity like so many on here in order to not be discriminated against?

My reference was to this kind of thread (VI's v HPCer's) appearing on a monthly basis.

Everyone is entitled to their opinions, which is what makes this such a good web site.

However, you seem to get very upset when people offer an opinion that contradicts yours.

Maybe you have a lot to lose if the market suffers a correction.

mystic_trev

eurows wrote:

Any fool can borrow money and rent out houses. We will see where all these fools are when IR's go up and house prices fall.

The fixed rate markets already going up,and likely to go up a lot further by the end of the year.

Just out from Reuters - what most us "keeping an eye on the economy" have known for the past couple of months.

http://investing.reuters.co.uk/funds/fundsArticle.aspx?type=fundsNews&storyID=2006-03-14T094727Z_01_NOA435243_RTRUKOC_0_FUNDS-MERRILL-POLL.xml

ChrisFTB

Hi there

If is the case that as well as live in Somerset, you buy property there also, the recent Halifax report must have made worrying reading...

"38 counties have seen a modest fall (an average of 4%) in prices over the past year with these counties being mainly in southern England and the midlands. Four of the 10 counties recording the biggest falls are in the South East, two in the South West and West Midlands and one each in the East Midlands and East Anglia. The biggest house price falls over the past year have been in Somerset (-10%), Oxfordshire (-9%) and Hertfordshire and West Sussex both with -7%. These falls, however, need to be viewed in the context of the substantial price rises recorded in these parts of the country during the last few years."

http://www.hbosplc.com/economy/includes/UKQ42005.doc

Chris

van_persie

In my opinion there are lots of different things still fueling the housing market like investors, parents helping children, inherited wealth, banks coming up with ways for ppl to borrow more like new 'lifetime' mortgaes etc.

We've had historically low interest rates. People have borrowed more. It's as simple as that.
But that is about to change. Cheap credit is history, the world is upping IRs and it's pay-back time...

The recent phenomena of greater personal debt is also something that makes me believe that interest rates will not increase substantially again.

??? Why??? What have personal debt levels to do with IRs? Do you think the banks are responsible for those who've over-borrowed?

It's always in the paper about max'd out credit cards etc and personal experience seems to indicate ppl's personal debts have increased rapidly last few years. The bank of England knows with sooo many ppl having huge debts it would be crippling to increase rates substantially.

The BOE's remit is to control inflation, nothing more. If you think they are responsible for controlling anything else, you are very much mistaken.
Irresponsible borrowing should - and will - be punished.

Also, aren't rates in europe quite low at the moment i.e 2-3%?? I agree that the housing market is cyclic. But i'm inclined to believe that the cycle goes from substantial increases to modest increases, and not necessarily include massive down periods.

Rates in Europe have just gone up and futures are pricing in further rises. Japan is about to come out of 0% interest for the first time in years, the Fed are pricing in several more hikes. Sterling will tank if it doesn't come in line. IR rises are on the way.

Re: housing cycles, talk to anyone who lived through the last 2 crashes. I did, and I can tell you there were certainly 'massive down periods'. A cyclical market means peaks and troughs, not big peaks followed by little peaks. That's not cyclical!

please take a look at this site for more info:

http://www.firsttimebuyerhelp.co.uk/articles/article.aspx?id=3