10 yrs on will u be envious of all those 'muppets' that got into B2L now?

ad9898_3

Gorgeous_George wrote: »

If you have £100K to invest for ten years, you have many choices but here are two options.

This is the problem though George, most people (including many latecomers to BTL), never had 100k, they had 5k or 10k and borrowed the other 90-95k, this is where the risks far outweigh any benefit, as when prices fall, you're left high and dry, unable to remortgage and left with an asset worth less than you borrowed, add to this that the chances of there being 3% growth in house prices YoY over the next 10 years, is virtually nil.

As and example my parents sold their house in Aug 1988 for 65k, in Oct 1998 the house sold again for 75k, that's a 10% rise in 10 years, and that was through a relatively mild crash and recession compared to the one we are experiencing now.

Pobby

mewbie wrote: »

Oh and the unwinding of the biggest house price bubble in history. It's certainly in my memory when you could buy a house on a credit card, because property was so unloved. And on what utility basis does a house in the states become worth a dollar?

Of course it depends whether you think we have just been through a bubble, or a slight over pricing of a few %.

House on a credit card. You better believe it. I have a mate who did just that in West Wales. Btw, you could pick up a farm down there before all this hpi for £30,000.

Gorgeous_George

ad9898 wrote: »

This is the problem though George, most people (including many latecomers to BTL), never had 100k, they had 5k or 10k and borrowed the other 90-95k, this is where the risks far outweigh any benefit, as when prices fall, you're left high and dry, unable to remortgage and left with an asset worth less than you borrowed, add to this that the chances of there being 3% growth in house prices YoY over the next 10 years, is virtually nil.

As and example my parents sold their house in Aug 1988 for 65k, in Oct 1998 the house sold again for 75k, that's a 10% rise in 10 years, and that was through a relatively mild crash and recession compared to the one we are experiencing now.

I agree and fully understand that my 'options' were limited. I was on a lunch break and spent all of two minutes composing the posting.

It wasn't meant to be a business plan but more an attempt to show why BTL is attractive. Ignore rent and it ain't a bad investment. Ignore capital growth and it ain't a bad investment. Normally. Ignore falling prices/stagnation/risk of long term voids and it could lead to financial ruin. In abnormal times and over any short term, it may prove to be spectacular, ok or disastrous. Buy at the wrong time and it could bankrupt. Buy one or two properties and you should be able to manage any problems. Buy loads of properties and the impact of any risk materialising could be huge.

Becasue I own one BTL, I elected for a tracker deal. I'm enjoying a rate of 1.39% at the moment (for life). If I had lots of properties, I'd have been 'forced' to go for a fixed rate at 6% or more.

GG

RomansProperties

I treat my properties like a business. I am not looking for capital values to increase over time, that would be a bonus but not part of the calculation.
I look at investing in properties which return over 10% and provide me with an income for the efforts I put in.
There is still properties worth investing in but at this time you need to be particular and I think in the past people thought any property was a money spinner
I understand where people are coming from when people are boasting about money and how many properties they own but would people not think the same about a salesman who boasts about how much he makes as well?

mewbie_2

chucky wrote: »

an out of date government graph

I can't really fathom that graph, nor it's provenance. So I'll just repeat what happened, based on an assimilation of information, probably the same as you have been reading, over the last ten years. Ten years ago there was no such thing as a BTL mortgage. Over the last ten years numbers of FTB's have shrunk while BTL's have increased. In recent years they have taken the bottom rung of the market and made it virtually their own. Exaggeration to make a point but you get the idea.

Now we have no BTL's and no FTB's. (Oh and no banks or building societies - well you know what I mean). Insidetrack perhaps encapsulates (you know I'm struggling with the argument when resorting to long words) the BTL pinnacle the best. A queue of idiot investors buying into a pyramid scam. There is surely no other way of looking at it.

I notice you didn't bother copying the graph from the next page of that linked article. Always best to be selective I find, don't you Chucky?

Pobby

How a lot of serial buy to let guys did it was this way although I guess you already know. First off release some equity from your own home. Buy at least one property, slap of paint, wait a month or three, get it revalued and strip another bit of equity out and if you were very clever you repeated step one on your own home. Before you knew where you were you had tons of property and loads of mortgages with smaller and smaller yields.

Anyway, good luck to them with their nice, low mortgage rates which us savers are now supporting.

Gorgeous_George

Pobby wrote: »

Anyway, good luck to them with their nice, low mortgage rates which us savers are now supporting.

Most BTLers have high interest rates and support the savers.

GG

Pobby

Sorry GG, seriously not having a go but I don`t understand what you mean.

chucky

mewbie wrote: »

I notice you didn't bother copying the graph from the next page of that linked article. Always best to be selective I find, don't you Chucky?

i have nothing to look at the next page because you're little rant (that you seem to do every day now) was exclusively about BTL not affordability. i don't have an argument there.

but if you want to move the goal posts or even cloud the issue because you're initial point was compete tosh about BTL like most of the nonsense that comes from the usual suspects. it was even a view it was nonsense that has zero susbstence which that graph proves wasn't the case.
please feel welcome to move goalposts to try and prove something.

chucky

Pobby wrote: »

How a lot of serial buy to let guys did it was this way although I guess you already know. First off release some equity from your own home. Buy at least one property, slap of paint, wait a month or three, get it revalued and strip another bit of equity out and if you were very clever you repeated step one on your own home. Before you knew where you were you had tons of property and loads of mortgages with smaller and smaller yields.

Anyway, good luck to them with their nice, low mortgage rates which us savers are now supporting.

an average BTL rate is around 5% or 6% at least except for those on trackers and SVR. new style trackers are not cheap now.
it's best to have a combination of old style trackers and fixed rate.