Buying Cheaper Than Renting Everywhere except London

IveSeenTheLight

nearlynew wrote: »

BTL landlords didn't give a stuff about yields 3 years ago.
Most of them didn't even know what it meant, let alone how to calculate it.

It was all based on capital appreciation.
It's only since the assumed, automatic HPI has been removed that they start mentioning yields in an attempt to justify their purchase.

I'm not necessarily having a go at anyone on here, but generally, that is the case.

Is this not an assumption?
Where is the facts to back up this assumption?
It is good advice never to assume anything.

nembot

tek-monkey wrote: »

Agreed, those screaming that prices are about to tumble are usually the ones desperate to buy but unwilling to pay current prices. I assume they are hoping they can engineer a fall by telling people it will happen, but very few back up their 'knowledge' with actual facts.

Its all guesswork, nobody really knows.

Works both ways, yet the bears don't usually call the bulls "idiots" so much in the process.

IveSeenTheLight

nembot wrote: »

Works both ways, yet the bears don't usually call the bulls "idiots" so much in the process.

I think you need to look less blinkered.
There is crap sputed from both labeled factions

nearlynew

chucknorris wrote: »

When identifying potential properties my crieria was and always has been since 1991 when I bought my first investment property:

1. No single bedrooms (ie no bedrooms less than 100 sq ft)
2. The yield!
3. Within the target area

If the property did not satisfy all 3 items I wouldn't even call the estate agent.

The yield you arereferring to is only the rough guide to identify potential properties before arranging a viewing it would have to stack up on my spreadsheet analysis which considers:

1. rental income
2. Mortgage payments
3. Possible voids
4. Maintenance costs
5. Insurance/service charges
6. Misc overheads
7. Tax
8. Cash invested (deposit, fees furniture improvemments etc. for calculating the real yield i.e. the return on your capital invested this is the meningful figure that decides if an investment is a good one or not
9. All of the above over the folowing 10 years with assumptions on interest rates rental and maintenance inflation.

The yield you are referring to does not really tell you much, property is a long term investment with not much return in the early years, you need to know what it will look like in 10 years time.

You are only BTL landlord on here that speaks any sense.

It is clear from your posts that you know what you are talking about. And this comes from experience more than anything else.

The people I was referring to were the more recent entrants to the game who quite clearly know nothing but HPI and based their whole strategy on it.

There are thousands of these around the country and I know quite a few personally.

It is not a generalisation but a fact.

chucknorris

nearlynew wrote: »

You are only BTL landlord on here that speaks any sense.

It is clear from your posts that you know what you are talking about. And this comes from experience more than anything else.

The people I was referring to were the more recent entrants to the game who quite clearly know nothing but HPI and based their whole strategy on it.

There are thousands of these around the country and I know quite a few personally.

It is not a generalisation but a fact.

Thanks for the compliment but I think there are a few others around too.

There is a big difference (as I am sure you know) between genuine landlords who enter the business with the intention of renting out property long term and speculators that want to gain from HPI by getting hold of property and almost as an inconvenience rent it out and put up with tenants while prices rise.

One thing I have learnt from this recession is that a definite exit strategy is needed to make sure I am not lumbered (in my 60's) with the property in next recession. So not being too greedy is the key you have to sell up while prices are still on the way up. I haven't really considered this until this recession as I also thought I would sell up when I was about 60 (9 years time) that might have to wait a year or few to match up with the right time (balance of locking in some increase, good market to sell in and not being too greedy and waiting too long).

IveSeenTheLight

nearlynew wrote: »

You are only BTL landlord on here that speaks any sense.

It is clear from your posts that you know what you are talking about. And this comes from experience more than anything else.

The people I was referring to were the more recent entrants to the game who quite clearly know nothing but HPI and based their whole strategy on it.

There are thousands of these around the country and I know quite a few personally.

It is not a generalisation but a fact.

It is a generalisation as you do not back it up with facts.
Here's a fact for you.
Only 2.49% of all BTL mortgages are in arrears by three months or more.
That means 97.51% are not in such arrears

Given that there are 1.2 million BTL mortgages that means there are 29,400 in arrears and 1,151,322 which are not.

Here's the link to back up the facts
http://www.cml.org.uk/cml/media/press/2358

Of the 29,400 we do not know any more financial detail.
Have they withdrawn capital and invested elsewhere, keeping the loan interest high?
There is the advantage that these people making losses at the moment can carry forward for up to five years on future profits.

My point is that with only 2.49% in arrears, this is the minority and not the "general" situation with BTL LL's

mewbie_2

IveSeenTheLight wrote: »

It is a generalisation as you do not back it up with facts.
Here's a fact for you.
Only 2.49% of all BTL mortgages are in arrears by three months or more.
That means 97.51% are not in such arrears

I'm wondering why any are in arrears. Assuming rent covers mortgage then what is the excuse for not paying your debts? Do 29,400 mortgages not have any tenants? I thought rents were fine, and letting was fine, and blah blah. PLus why do they measure three months arrears - don't the first two months matter? Could you multiple by three and say it is likely that nearly 100,000 BTL mortgages are in arrears?

I wonder how many more are topping up the mortgage on the BTL with their own money.

Need more facts ISTL, more input. It's all good bear food, that's for sure.

nearlynew

If you believe the bullsh1t the CML publish, carry on.

I'll stick to what I know as the truth.

IveSeenTheLight

mewbie wrote: »

I'm wondering why any are in arrears. Assuming rent covers mortgage then what is the excuse for not paying your debts? Do 29,400 mortgages not have any tenants? I thought rents were fine, and letting was fine, and blah blah. PLus why do they measure three months arrears - don't the first two months matter? Could you multiple by three and say it is likely that nearly 100,000 BTL mortgages are in arrears?

I wonder how many more are topping up the mortgage on the BTL with their own money.

Need more facts ISTL, more input. It's all good bear food, that's for sure.

I've no idea why they are in arrears. It does say the number in arrears are lowering. That can't be good bear food can it.

How many more are subsidising? Don't know, can you find the facts or will you let your own mind make up the figures again. Does it matter? If that is their business plan then that's up to them. Not going to be good bear food if they are still managing to get the mortgages paid though is it?

You can't multiply 29,400 by three and assume that nearly 100,000 (well only 88,200 to correct the maths) are in arrears. Actually YOU probably can as you like to make assumtions.

Me, I never assume as it makes an !!! out of u an me, but you go ahead and make an !!! of yourself

IveSeenTheLight

nearlynew wrote: »

If you believe the bullsh1t the CML publish, carry on.

I'll stick to what I know as the truth.

HeHe, Mewbie does, he thinks it's good bear food and you thanked him