Buy to let? Or put the money in the bank?

clutton_2

i kind of agree with Tassotti - i also am making fairly decent profits on my BTL portfolio, as i bought at the right price - even allowing for Interest Rates increasing, property has, historically, doubled in price every 7 years during the last 100 years (I suspect that the last 5 years has changed these figures quite dramatically in this current 7 year period).

But, even if a BTL landlord makes a small yeild at the moment, the added bonus is the long term Capital Gains to be had. if you keep a property for the requisite amount of time, and/or you live in it for a while you can legitimately dramatically reduce, or even zero, your capital gains tax liability

Property was, still it, and always will be, a long term investment strategy.

PoorDave

realwildone wrote:

Ha ha ha ha I would rather stuff my money down the throat of a dead cat

Each to their own

Tassotti

I will admit though that I no longer purchase property unless it is significantly below market value (30%)

I am investing elsewhere at the moment and my returns are 156% per annum.

:beer:

LittleTinker

Sisyphus wrote:

yes, a great alternative to a bad investment in this country, is an investment you know absolutely nothing about in another country. Nice advice.

I get you.....you want the easy money without all the hard work of research, visiting places, learning a language perhaps, meeting people who have been through the same thing......etc etc ??? Its called LEARNING! And besides all that.....if someone were buying their first house here, how does that mean they know ALL about it??

There is absolutely nothing wrong with investing abroad.....you just need to remember not to let go of your common sense and use it like you would use it here.

dunstonh

I think the general feeling of many of the regulars that post on this subject isnt that UK buy to let is a bad investment. Its just that it requires more research and knowledge than before and that other areas offer better potential at this time.

The negative attitude is towards those that go into mortgaged buy to lets thinking its a one way street to big money without actually having a clue about the consequences of their actions.

prudryden

Take your time. Buying a little house and a cat and putting your liquid funds into a bank (savings account) or other liquid secure investment vehicle (A or better rated sovereign/corporate bonds) sounds fairly stress free. That, in itself, is worth a premium and, even though it is an intangible return (less stress), must be added to any investment return.

On the subject of investing abroad - if you get it wrong, it can be decimating. E.Q. A lot of people buying property in the USA don't realize that many houses are actually considered a "wasting asset" in the long term. Reason being is that they were not built to withstand the test of time i.e. limited life expectancy.

Alan_M_2

BTL is increasingly becoming hounded on this forum, but I think a lot of the comments are being a little missunderstood or taken slightly out of context.

Right now, particualrly in the South East I'd say you'd be barking mad to be starting a Buy to Let business (unless you have the capital to get into commercial property). As already pointed out, the rental yields are historically low, due to the increase in value of the property.

Now those BTLer's that invested in the rising market had their heads screwed on/got in at the right time/had a little luck on their side as the yeild of a property is only relevant based on the figure that you paid for the property, any capital increase in value is the cream on top.

It's no different to being a stockbroker, you wouldn't jump in at the top of the market with as much leverage as possible (well unless you're running hedge fund and shorting!) you'd want to enter as low as possible or enter a rising market.

BTL isn't dead, it's just not sound at this point in time, the econmic cycle will continue on it's inevitable way and this will change again in years to come when housing prices reduce or rents increase or maybe a combination of the two.

PoorDave

LittleTinker wrote:

I get you.....you want the easy money without all the hard work of research, visiting places, learning a language perhaps, meeting people who have been through the same thing......etc etc ??? Its called LEARNING! And besides all that.....if someone were buying their first house here, how does that mean they know ALL about it??

There is absolutely nothing wrong with investing abroad.....you just need to remember not to let go of your common sense and use it like you would use it here.

Last paragraph is a good one, and applies to lots of stuff, not just investing abroad.

On the face of it, investing in the UK is more hassle free, but less likely to make a good return if you buy now. Anyone doing their research abroad should make sure they're buying because they have checked, and can see for themself why it's a good idea, and not because they've heard everyone else is doing it.

scorpio_princess

Tassotti wrote:

Hi Anon

Don't be discouraged by a few posters who have no real idea about how to make money.

Your idea will work out just fine as long as you do the research.

By this, I mean, calculate the interest payments if you remortgage.

Speak to letting agents to obtain a realistic price (as a renter) for letting the property (add insurances and 2 months voids per annum {exaggeration on the voids})

Do the figures.

May be better investments out there at the moment,but the saying always holds true 'safer in bricks and mortar'

I will probably get slated for this but I am a BTLetter who makes a decent profit (even in thses days)

Time to raise the rents

Tass

Nooooo! If rents went up, i'd be homeless! It's expensive enough as it is in my area

Why should rents go up just because a few more people want to jump on the BTL bandwaggon? It's a flooded market, with what seems to be too many people thinking it's easy money.

scorpio_princess

Tassotti wrote:

I will admit though that I no longer purchase property unless it is significantly below market value (30%)

I am investing elsewhere at the moment and my returns are 156% per annum.

:beer:

Blimey! I don't know where you live, but even the scummiest properties around here go for much more than 30% under market value! But then the market is very over-inflated here....