Buy to let fever?

mystic_trev

meanmachine wrote:

But until the next get rich quick scam comes along, looks like we're lumbered.

I've been thinking that Tulips might be the next big thing - are you up for it?!

poopscoop

meanmachine wrote:

The show only got 2.1million - quite poor for the KirstynPhil brand.

Villareal vs Arsenal was on. I think them programmes have gone downhill anyway

BobProperty

lynzpower wrote:

They are nice bob, might encourage my sister to buy one of those (to live in) they look pretty nice.

This will get me into trouble - but it's Reddish, it's the only decent looking property in the area. (OK it borders Heaton Chapel but the views out the back don't make up for the Chav's hanging around.)

lynzpower wrote:

Personally, the manchester market I dont know who can afford it. 2 mates of mine have bought a 2 bed flat n Ancoats, ones a dr, ones an accountant the accountant works evenings in a bar to help him out with money,

Completely agree. Anyone who BTL in area in the last couple of years will be in trouble sooner or later, and so could the owner occupiers.

lynzpower

Bob
Yeah my sis used to live in reddish, in fairness shes a bit of a chav herself lol. Let me get this right, in order to pull a 5% yeild which is what K&P said they would take as minimum, am I right with my maths that youd have to find a tenant willing to stump getting onto 570 a month for it?

ps Those two in ancoats ARE owner occupiers!

F_T_Buyer

meanmachine wrote:

The show only got 2.1million - quite poor for the KirstynPhil brand.

How do you know how many watch the program? If you don't mind me asking..

meanmachine_2

Channel 4 give the overnights on their website:

http://www.channel4sales.com/audience-data/overnights.aspx

gallygirl

My turn to have a moan now..... I didn't find the prog v useful, but I think they did draw attention to the risks.

Leaving the house is risky. So is staying in the house (plane could drop on it, mad axe murderer come to call). It's all about spreading and assessing risk surely?

You only lose money on property if you sell it for less than you bought it for. What it's valued at on any one day is pretty immaterial, unless you need to sell on that one day. The problem is that those who get into it without research are those who are likely to have to sell it (maybe to invest in tulips or something). I have a colleague who was desperately worried 5 years ago as he was in negative equity.... he's just remortgaged to but a BTL (:rolleyes: which I DON'T think is a good idea......)

However, property is very rare in 1 respect. The majority of people who invest in shares etc. do so with their own money ( I know some people borrow to invest, but they are not the majority). Most property purchasers invest with mainly someone elses money and a little bit of their own, but get profit on all of the increase, not the say 10% of the property they actually owned.

And when did you last hear of a house going bust? I've read the same articles as you about a few people whose house is now virtually worthless, however I've read of a damn sight more who invested in dot com companies that went bust, or paid extra into pensions which are worthless.

Rant over for now.....

nmiah786

poopscoop wrote:

It's called leverage. For example, if you borrowed to build a nursing home at 8% and you get returns for 33%, it's called financial leverage. Businesses do it all the time. Check them out when you read the stocks & shares section in various publications. Before you invest in a company you check key points like their debts (good or bad).

Poopscoop

Thanks for that! I think I understand gearing and leverage now but all I wanted to know was how much of that £1m was debt thats all.

Thanks for the insight anyway.

lynzpower

ali007 wrote:

You only lose money on property if you sell it for less than you bought it for. What it's valued at on any one day is pretty immaterial, unless you need to sell on that one day. The problem is that those who get into it without research are those who are likely to have to sell it (maybe to invest in tulips or something). I have a colleague who was desperately worried 5 years ago as he was in negative equity.... he's just remortgaged to but a BTL (:rolleyes: which I DON'T think is a good idea......)

Rant over for now.....

Or you sell for the same price that you bought it for, and you have been subsidising voids & repairs etc that dont get accounted for in sloppy accounting for example. As you say, its those who get into it without research that have to sell.

meanmachine_2

ali007 wrote:

However, property is very rare in 1 respect. The majority of people who invest in shares etc. do so with their own money ( I know some people borrow to invest, but they are not the majority). Most property purchasers invest with mainly someone elses money and a little bit of their own, but get profit on all of the increase, not the say 10% of the property they actually owned.

Yes, but to me that's what makes property investment a "high risk" strategy. In fact, it's classed as a high risk investment because of this gearing aspect.

No, houses themselves don't go bust, but the fact that someone is risking the family home in all of this makes it a much bigger gamble than me setting up a LTD company, then going bust.

If that happens, my liability is limited. If there's a property crash, my kids could be out on the street.

BIG difference.

I'm staggered that some people aren't aware of this. It's almost as if "borrowing someone else's money" is seen as an advantage. On the upside yes, but when the market turns south, you're in DEEP trouble.