BTL: "... a ticking time bomb."

PasturesNew

RomansProperties wrote: »

I have 5 deales ending between June and Sept.
These are going onto LIBOR plus 1.5% to 2%.
I am planning to stick on these deals until I see the LIBOR start increasing.
It will still mean rates of between 3% and 3.5%

Cheap as chips then

RomansProperties

Alan_M wrote: »

all his properties are occupied and these aren't exactly what you'd consider "Executive apartments".....

He's what I consider a professional landlord or BTL landlord.

I think this is the key to BTL. Plently of people are trying to rent Apartments out. People need cheap and cheerfull accomodation.
Basic but clean and well decorated.

RomansProperties

PasturesNew wrote: »

Cheap as chips then

For the mean time
Will wait and see what happens in the next 6 to 12 months.

I dont think there is any new decent mortgage deals out there for BTL at the moment.
I think if you cant buy for cash its best to sit out the market till mortgage lending in this sector increases.

RomansProperties

chucky wrote: »

i've never had a commercial loan long enough or needed to re-finance but would like to know if any one has an experience of these.

I am just getting 2 properties put onto commercial loans at the moment.
Waiting for the bank to get back to me.
I think they will want repayment terms unlike the majority of BTL lenders who were happy with Interest only terms.

Thrugelmir

RomansProperties wrote: »

I am just getting 2 properties put onto commercial loans at the moment.
Waiting for the bank to get back to me.
I think they will want repayment terms unlike the majority of BTL lenders who were happy with Interest only terms.

You obviously built on your (sucessful) business on a certian model. Now that interest rates are edging upwards (even though BOE base will remain low for a while), and interest only mortgages are being withdrawn from the market. Will you have to change your business model?

This is out of personal interest nothing else.

RabbitMad

I am seriously considering dipping my toes back into the BTL market. Once I can find a property that returns 8-10% per annum assuming 95% occupancy I'll be MEWing my residential house and grabbing a bargain. Interest rates are so low at the minute there is no incentive to put it in a bank.

The way I see it is that the rent should cover a repayment mortgage and at the end of 20-25 years I'll have an income generating asset owned out right, any HPI will be a bonus.

Thrugelmir

RabbitMad wrote: »

I am seriously considering dipping my toes back into the BTL market. Once I can find a property that returns 8-10% per annum assuming 95% occupancy I'll be MEWing my residential house and grabbing a bargain. Interest rates are so low at the minute there is no incentive to put it in a bank.

The way I see it is that the rent should cover a repayment mortgage and at the end of 20-25 years I'll have an income generating asset owned out right, any HPI will be a bonus.

There's a lot of assumption in your statement. A lot happens in a 20-25 year time span. You should only risk what you can afford to lose.

carolt

Oh go on - buy buy buy!

I highly recommend all would-be landlords buy now!

After all, those who did it 2 years ago are so clearly onto a good thing.

Can't fail.

RomansProperties

Thrugelmir wrote: »

You obviously built on your (sucessful) business on a certian model. Now that interest rates are edging upwards (even though BOE base will remain low for a while), and interest only mortgages are being withdrawn from the market. Will you have to change your business model?

This is out of personal interest nothing else.

We are changing the type of tenants we have.
Currently dealing with a few homless tenants on a scheme run by our local council.
We have 25 so far.

I also plan to use some of this increased revenue to start reducing the debt on certain properties while interest rates are low.

RomansProperties

RabbitMad wrote: »

I am seriously considering dipping my toes back into the BTL market. Once I can find a property that returns 8-10% per annum assuming 95% occupancy I'll be MEWing my residential house and grabbing a bargain. Interest rates are so low at the minute there is no incentive to put it in a bank.

The way I see it is that the rent should cover a repayment mortgage and at the end of 20-25 years I'll have an income generating asset owned out right, any HPI will be a bonus.

Thats the plan I work to. Properties returning between 7% and 19%.
Although currently they are all on interest only mortgages I may look to change this for a few in the future.
I also have not relied on any increase in value and will be happy if they stay the same. I am in it for the income and not the increase in property prices.
I think the HPI has caused big problems for landlords who bought properties that returned 5% or below