Buy to let fever?

Tassotti

Exactly,

If anyone wants a 1 bed flat for under 50K within 20 mins train journey from London village, let me know. They are out there

lynzpower

Tassotti,

You could PM me if you like

rizla01

Very Interesting thread.

Glad to see that it has cheered up a bit as opposed to all of the doom & gloom at the start.

1stly I will continue to buy flats at auction & EAs (At the right price) and am still able so to do even in the saturated South East.

I find that the knack is doing a 80k prop up to being valued at 110k, letting it for a sum to cover the loan of 85% Mortgage which I then take out on another property (costing about 90k) do it up and to sell on for 120k.

Initial investment of 80k now gives a return of 120k (40k less cost of doing up two flats (10-15k) and four mths work) = 40k profit plus any (?) accruing value of the original purchase.

Doesn't always work out this way but the last two did - and do bear in mind that I am able to do most of the work myself.

Property market collapsing?

Most of the MPs have large portfolios so I cant see that happening again, ever.

Re the stocks v the property market argument. The difference here, surely is that when stocks start to move downward you should be able to cut your losses and get rid whereas in the prop market downturn it takes a lot longer and the losses would surely be greater.

These are just the thoughts of a simple but rational person (me) without the benifit of a degree in economics or financial services and therefore open to scrutiny. Fire Away!

balsingh

Tassotti wrote:

Exactly,

If anyone wants a 1 bed flat for under 50K within 20 mins train journey from London village, let me know. They are out there

Enlighten me!!

gallygirl

F_T_Buyer wrote:

This post sums up the thinking behind Buy to Let.

Yes, you have done well. You found a high yielding property two years ago - a 7.8% gross yield. After maintenance that is 7% - still good.

But look at that investment today. The gross yield would be 5.3% gross. With a net yield of 4.8%. No very good at all. They are many other investments that will easily out perform that!

I always struggle with the reasoning behind the above argument. I would far rather be getting a yield of 4.8% on a property I've made 30k on than be getting a yield of 7% on a property still worth what I'd paid for.

Also, what about voids? Debt servicing costs? etc etc. This needs to be taken into account.

What about voids??? Renting at the lower end of the market means there is a constant stream of potential tenants - we had a possible void a few weeks ago, although tenants stayed in the end. £16 advert in paper, 12 phone calls, 3 viewed, all wanted it.

Not sure what you mean by debt servicing??? But if you mean mortgage payments you'll see from my original post that this is more than covered.

Ah... but it's going up in value... innit... (I hear some people say to themseleves)

Is it? We can argue which way prices will go from now on - but's that's been covered far enough. Either way there is a huge amount of contridictory evidence from different house price surveys. The general consensus is prices will be flat!

I haven't commented on what WILL happen, just what HAS happened. 2 neighbouring properties just sold for 92 & 97k.

But to price the investment on future growth is simply bubble logic. Just like the recent tech bubble. No one cared about the earnings of the company (the yield) it was going up in value so they didn't care - it was a bubble. When it stopped going up in value it crashed.

I agree, the yield on some companies is incredibly low when one looks at how the market is valuing them, and we're talking about investment houses etc, not lemmings who don't know any better. But I've never expected great growth.

To think BTL is a good investment because it will go up in value, proves my point that the housing market is a bubble.

I'm not saying that money cannot be made, it can if you look very hard. But to assume your capital gains will continue as it did is rather foolish.

I haven't made this assumption, although I live in a very cheap area with increasingly good transport links to London. As long as house prices keep pace with inflation I'll be happy - I'm getting the benefit of the rise of the whole property, not just my initial stake.

But can we please bear in mind that for the last 3 years people have been talking about the bubble bursting and it hasn't happened. Prices are rising slowly in most areas.

Making money out of property is not as easy as it once was, and K&P producing a program to ramp BTL is purelly irresponsible.

Maybe we should watch the programme before we decide whether or not they are being irresponsible. However, no matter what I will prefer to keep my money in property - not necessarly BTL, and not necessarily buying more. But I know too many people whose pensions were with Equitable Life, or we read all too often about the schemes which have been wound up before they retired so they'll be getting a pension of 1k, instead of the 12k they were expecting. And I have made profits from shares & unit trusts - but never felt comfortable with them. Making informed decisions based on my knowledge of the local market will always feel more comfortable to me.

The sort of naive people you seem to referring to would no doubt have lumped into tulips or the South Sea a few hundred years ago, or tech shares 5 yrs ago. But don't tar us all with the same brush. For every one of them there are 100's on 'me's' - slowly ticking along in unspectacular fashion, watching the mortgage being paid off and grateful to take the bonus of capital growth as and when it arises.

ReportInvestor

ali007 wrote:

Maybe we should watch the programme before we decide whether or not they are being irresponsible.

Good point.

75 replies and nearly 2,000 viewings and it's nowhere near Tuesday 8.00 pm .

lynzpower

In guessing all the production crew and C4 bods will have bought up all these fantastic bargains before the show gets aired so I wont be calling my broker just yet

meanmachine_2

Just to warn you, viewers will be given a privileged glimpse into Countess Kirsty's palatial London pad.

The reason? She's desperate to let it out.

Funny, I thought she was trying to flog it.

I wonder whether she'll be telling us the yield on her place...

lynzpower

Surely the markets not going flat round Kirstys way? It cant be true!?!? If so maybe its one of those unexplained property blibs where everywhere else "is flying off the shelves" and we all better "hurry" before "we cant get on the ladder" and its "too late"

gallygirl

meanmachine wrote:

Just to warn you, viewers will be given a privileged glimpse into Countess Kirsty's palatial London pad.

QUOTE]


OOOOHHHH, hope we see her shoe collection!!!!!!!:D