Buy to let - advice please

Fitzy29

it would take about three years of voids to wipe out 15K equity in a 100k property, if you have voids for this long, well you shouldn't be in the business in the first place!

As with any business, cash is king, keep a contingency fund!

Tassotti

BobProperty wrote:

You might remember my answer from previous threads, 15%. I'd go as low as 10-12% if the market was hot and I could see some easy improvements either to the rents or the capital value. That's not "today's market".

Bob, did you ever get 15% yield for any of your past properties?

Tass :beer:

ginger_nuts

silvercar wrote:

You have all the equity in your own home, so you could mortgage that with the cheapest residential mortgage you can find and use that money to purchase the BTL property outright. This is perfectly legal and you can still set the mortgage interest against rental income for tax purposes as it is the purpose of the loan that counts not where it is secured.

I did this .the tax man was happy with it . If you decided to go down this road as I did ,try to avoid long term tie in with your mortgage lender . No point in being tied in if you decide to sell your BTL early .
If you intend to retire in 10 years it may be worth looking at interest only repayments .

BobProperty

Tassotti wrote:

Bob, did you ever get 15% yield for any of your past properties?

Tass :beer:

Yes, first one cost about £7k and £3k to do up, rented, guaranteed, started at about £2k. Had another which cost £11k-12.5k and rented for about £200 pcm. I can't remember the exact figures as you can tell that was a while ago. Looking back, those were the obvious ones that were profitable. I have owned a couple of others, I never was a full time landlord. Personal circumstances prevent me doing anything at present, but that in a way suits me because of the way the market is at present. I will get back into property, either renovating, letting, or both when the BTL bubble bursts and prices and returns become more realistic.

Conrad

Tassotti wrote:

As it happens, I own property in Bulgaria and Estonia.

I also buy below BMV in UK and release 25-30K on most deals (every month)

QUOTE]

I know experienced property dealers that USED to do this. Now everyone of them to a Man says its very very rare and not worthwhile.

I know several owners of Estate Agents (some of them large very succesful firms) yet none of them manages to secure these 'fabled' BMV deals even thought they have are first to be aware of property comming up for sale.

As for Bulgaria, Ill leave that one to other people thanks.

Why buy there when I can buy in Germany which is just as cheap yet far more secure and where a real second hand market exists, oh and Germany remains the worlds number one exporter (yes it realy is ahead of the USA when it comes to exporting).

Morocco is also a much better investment than Bulgaria. The season is year round, mainly big international developers are involved (Bulgaria has a few big developers involved but mainly its crooked small UK and other developers), plus it has vast untouched beaches far nicer than those on the Black Sea. BTW it also has 2 ski resorts which are bieing developed - skiing in Africa!

As for my Estonian adventures, I dont expect overnight profits, I buy there for long term holds. £20000 for a 77000 sqm farm isnt too bad, people p1ss that away on a dumb car which is GUARANTEED TO DEPRECIATE!

mikeyw

Tassotti wrote:

I have several 100K properties that rent at 550-575/month. All 1 bed flats...maximum void 3 weeks

Where mate ? - where ??

Conrad

Fitzy29 wrote:

Done correctly strong returns can be made, i work with investment landlords every day some have up to 70 properties on the go and most use the guide I showed in my earlier thread. That's how I learnt about it. All avoid CGT as they never sell and use the re-finance options to raise capital to fund their lifestyles and pension funds further investments etc...

I also know such LLs but they all bought when our market prices were low. Noone experieinced I know has bought anything in the UK for at least 3 years as the yields dont make sense given the high prices.
Thats why we are going abroad.

Germany is like the UK market was in our last house price crash. I was looking at a whole Victorian school for under £60000! Imagine the development potential in 5 years time (Germany is comming out of recession now).
I recently bought land in Berlin, the German capital at a fraction of London prices. Its now just a waiting game.

mikeyw

dunstonh wrote:

Looking at it very very crudely. House purchase is £100,000, a gain of 200% means it is valued at £300,000 minus the interest only mortgage that cost you £141,000 minus a capital gains tax bill of £80,000 leaves you with an overall gain of £79,000 which is an annual equivalent return of 3.16% over 25 years.

Hold on a minute what about the actual rental income !! over 25years that ain't small feed. Your example assumes the house is empty for 25years or have I missed something here

The rent pretty much covers your £141K interest as a minimum

Or is this example a buy to live not let ?

Conrad

Fitzy29 wrote:

Like I've said it's a business, and not without risk. I guess it depends if you want a regular job all you life and end up with a pension worth, well who knows...

He who dares and all that, there are all sorts of opportunities in property, the above, as I said, was a perfect world calculation a simple illustration and very basic at that. Money can be made in all sorts of ways through property, buying below market value, renovation projects, buying overseas etc.

It's obviously not for people like you,

Fitz, everyones doing it!

Every other person I meet from retired Grandmas to FTBs have been getting into B2L. Life tells me that making money cant be this simple.

When the party gets too crpwded its time to leave.

I cant beleive all these millions of simple people are investing in a 'business' that will provide such wealth.

Why isnt every world investment fund doing this is ifs that simple?

musey

My dad always used to say "by the time you have spotted a bandwagon it's too late you've already missed it"