Buy-to-Let high yield locations...

master_ian

DOH! Just rang Newham Council - private lettings team - and they've just suspended their 'let to the council service'. They're using a private lettings co at the mo. and I'll try and find out who it is.

However, have gone to http://www.eastlondonproperties.co.uk/index.php?page=landlords and spoke to someone in their office and for TOWER HAMLETS they do provide guaranteed rent for 3 - 5 years max for your property should you let to them. So that guarantees landlords monthly rent for that period even through voids in the property. I asked about rates and they are paying £950 - £1000/month for a ground floor 2 bed flat in Tower Hamlets. They work for the council so there is No commission, No admin charges, and no maintenance call outs (they have their own maintenance team for the properties) Obviously if the boiler breaks down we pay for it...but thats not a bad deal. The scheme is providing housing for the homeless.

Lynz, you know of anything like this in Newham?

littlesaint

I lived in Sheffield as a student. Most of the students live in three bed terraces, with the attic converted and a downstairs room turned into a fourth bedroom. They are fab houses and I hope to move back up there into one of those in a couple of years time, if I can still afford to live there. My mate got one of those in Crookes/Walkley eighteen months ago for £140,000. She reckons it was a bargin, because prices have gone up.

Back in 2000 we were paying £36 a week in rent, but that was cheap, even then, and prices have gone up since. Best areas for students are Broomhill, Hunter's Bar, Crookes, and Walkley. Prices have gone up loads in these areas though. The first two were expensive in the first place and prices in Crookes have almost doubled since we were at uni.

There are probably still bargins to be had in Walkley and from what I've heard students are starting to move out to other areas, eg Hillsborough, Meersbrook and Nether Edge. Might be an idea to find out what these up and coming areas are, so that you avoid buying something really overpriced.

Mrs_pbradley936

When my son went to university he was going to Nottingham and we looked at buying a place in his name up there and renting out rooms to others. We did the homework and it all looked fine. Then he ended up in the south and the figures made no sense at all so we shelved that idea.

mystic_trev

If you care to trawl through previous posts, I've probably said this a couple of times before!

I bought two BTL properties, one over ten years ago the othe just over eight years. One has more than trebled in value and the other more than doubled, which is great. However, the original reason for buying these properties was part of a balanced portfolio of Investments to provide me with an income, as I don't have the minor Inconvenience of a job! The properties were therefore bought for Income with Long term growth prospects. BTL purchasers are now turning this "on its head" and buying for long term growth (many thinking It'll be a quick buck!) and at best breaking even on yield. I think they've got it wrong and it'll all end up in tears!

All IMVHO !

Will_it_make_me_rich

Hi I have a BTL and until I read this post I had no idea what the yield it was.
I still don't understand whats all the fuss is about, great so you get 7% yield on the mortgage valve, by the time you have subtracted all your expenses for the year you could well end up making a loss.

I was told it's the growth you want if you receive any income it's a bonus.

With growth in mind I would avoid Nottingham at the moment instead look at Leicester and Derby.

master_ian

Point Mystic. Some of us are in it for the long haul.

What's IMVHO?

Bargain_Rzl

master_ian wrote:

What's IMVHO?

In my very humble opinion...

Mrs_pbradley936

Will_it_make_me_rich wrote:

Hi I have a BTL and until I read this post I had no idea what the yield it was.

Well, when you have money to invest many people consider different options open to them. That way that can judge whether one thing might be better for them than another. For instance I am not bothered by what will be in 30 years because I expect to be pushing up daisies but if I was in my 20s or 30s I might well be thinking differently. Yield is just a measure that allows you to compare investments.

Oh and it is not always certain that property prices will increase. It has in the last decade but the reason that there was such a song and dance about endowment mortgages was because the market did not perform as well as it had previously. As a result many people find themselves with a shortfall because they relied upon past performance.

Alan_M_2

Mystics point is the same as mine actually, there's as much chance of a correction as there is of sustained growth (more in my opinion). A long term investor will be looking to buy at as low or reasonable a price as possible.

Buying at what is a historical high in any investment vehicle isn't good practice (historically speaking).

A stock broker customer of mine once hit the nail on the head - during the dot com bubble He'd sold all his stock about 2/3rds of the way up the market and made enough money that He didn't matter if He never worked another day in his life. He didn't have a crystal ball - He didn't know a crash was going to occur, he made his decision on one thing - when members of the public that have no previous stockbroking experience are opening internet accounts and day trading and giving people advice on what to buy and what to invest in because it can only ever go up, that's the very time all the professionals sell out.

The market has become irrational.

For those of you reading this that don't understand the difference between investing and speculating this may be a shock.

Buying a BTL on which the rental yield doesn't even cover the interest only payment on a mortgage and banking on future capital increases is speculating - it's gambling in another word - nothing wrong with that if that's you're cup of tea.

Buying a property in a low market that returns a yield that covers a full repayment mortgage and has cash to spare to cover administration costs is an investment - someone else is paying for your house - they are effectively paying into a savings policy that at some point in the future you realise, any capital growth on top of this is just a bonus.

From the posts above you can clearly read that Mystic_Trev is an investor and Will_it_make_me_rich is a speculator.

Not clearly understanding the difference between these two can be financially very risky.

master_ian

"Buying a property in a low market that returns a yield that covers a full repayment mortgage and has cash to spare to cover administration costs is an investment - someone else is paying for your house - they are effectively paying into a savings policy that at some point in the future you realise, any capital growth on top of this is just a bonus. " Alan M

is what FTB master_E is endevouring to achieve.

Now to the original question - those 'low market price' locations....