Buy to let fever?

BobProperty

Tassotti wrote:

The only property investors that lost money in the last crash are the ones who lost their nerve, and sold.

The brave saw it through and are now financially free.

I don't think so. I can remember interest rates of 12-16% on mortgages and commercial loans around the 1990's. There were no BTL mortgage products then. Would your property portfolio still be viable with 12% mortgage interest rates? Because almost anyone who bought into BTL in the last couple of years, using a mortgage, won't be able to cope with 12% interest.

balsingh

BobProperty wrote:

I don't think so. I can remember interest rates of 12-16% on mortgages and commercial loans around the 1990's. There were no BTL mortgage products then. Would your property portfolio still be viable with 12% mortgage interest rates? Because almost anyone who bought into BTL in the last couple of years, using a mortgage, won't be able to cope with 12% interest.

If the rates went up to 12%, I'm sure that would force people out of buying and into renting. As a result, the rent would go up. Doubt if it would cover the mortgage difference though!!

Deemy

balsingh wrote:

If the rates went up to 12%, I'm sure that would force people out of buying and into renting. As a result, the rent would go up. Doubt if it would cover the mortgage difference though!!

12% interest rates will suck liquidity out of the economy, it would drive rents LOWER as people who rent just would not have the cash !

poopscoop

we're all doomed!!! The economy is going down hill and you may not have a job. Oh well you can still post on this forum and say "I told you so"

Jorgan_2

I bought the Location, Location magazine this month out curiosity, there was a an article on property millionaires & how they made there property fortunes. On of the guys had a portfolio worth x million (can't remember exact figure), anyway, he was saying how renting to students could be a nightmare as they were always paying late, which meant he was always overdrawn & if it hadn't been for family friends bailing him out he would have gone under many times.

And here was the magazine telling people the 'secrets' to his & the others success.

Please correct me if I am wrong but one of the points about buy to let is that the tenant pays your mortgage for you?

These programmes need to sensationalise (sp?) the item they are featuring. Seeing Joe Bloggs with his rental portfolio of two flats above a bookies, which he bought 5 years ago & rents out for £300 a month doesn't make interesting T.V. however, Tarquin & Emma with their five loft type apartments which they have bought in the last year & rent for £1200 a month makes 'interesting' T.V. The fact that Tarquin is geared to the hilt & if he has a void or interest rate rise will be stuffed seems to pass the producers/presenters by.

It is still possible to make money from buy to let, its just a lot harder & the returns are lower than the past. P & K need a strap line like the financial companies use, 'The value of property can go up & down & past performance is no indicator of future property increases.'

nelly_2

Tassotti wrote:

The only property investors that lost money in the last crash are the ones who lost their nerve, and sold.

The brave saw it through and are now financially free.

Yeah the pros who know the score not the gang of muppets who have dived in not having a clue what their doing.

ReportInvestor

Overheard at lunch today

Two middle class women bemoaning that it was getting difficult to pick up good b-t-l property these days and cover the mortgage with the rent.

meanmachine_2

ReportInvestor wrote:

Overheard at lunch today

Two middle class women bemoaning that it was getting difficult to pick up good b-t-l property these days and cover the mortgage with the rent.

They make it sound like a pair of shoes, rather than a massive financial commitment.

It's bizarre that, on the one hand, there's a small band of mortgage phobes who won't go near the market, but on the other, those with goldfish memories who think nothing of putting another BTL in their basket, as if mortgages were like loaves of bread.

The banks are laughing all the way to the, er, bank.

ReportInvestor

meanmachine wrote:

They make it sound like a pair of shoes, rather than a massive financial commitment.

The £10,000s of paper profit mentioned on one of several properties was all taken for granted, a sort of "must have" accessory, slipped casually into the conversation and no "big deal".

Tassotti

sm9ai wrote:

Too late for what exactly? how will this effect your children, your childrens children etc. At this rate house will be over the million mark and no future generation will ever own a house :rotfl:

40 years ago when my parents bought their first house, it cost £16000. The house just sold for £180000. I would imagine that back then, nobody would believe that this could ever be possible. A million pounds back then was a great deal of money.

A million pounds today is not that much money.

So, yes, in 40 years, I would expect my childrens' children to be paying well over a million for a 1 bed flat. A million will be virtually nothing then.