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Buying house for BTL
Comments
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It was great to have all these useful informations. Thanks!0
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Gorgeous_George wrote: »I smell a troll but aplologies if I'm wrong - again!
I don't really understand Generali's reasoning. Regardless of percentages, it's £££s that are lost or gained.
The answer is to do the sums. Say the house is £150K and you intend to pay cash. £150K invested in safe, hassle-free investments should return about £5K - £6K so that is what your BTL needs to return BEFORE you make a profit. So, rent needs to be £750 per month to make it worth even considering.
House prices are regarded to be too high by many people. If prices fall by 10% you would see the value of your BTL fall by £15K. That's £15K of your money.
Good luck.
GG
To turn it into cash terms:
Buy a house for £150k for cash. If the value drops by 5% you lose £7.5k If it rises 5% you gain £7.5k
Buy a house/houses for £1,000,000 with a £150k deposit (you are making the same intial investment). If the value drops by 5% you lose £50k, if the value rises 5% you gain £50k. The leverage amplifies your profit or loss.
It depends on your attitude to risk which is better. I reckon the former is better in the current market but it's your cash.
PS Watch out, watch out there's a troll about!!!0 -
How about buying a house for BTL with cash ,no mortgage.
Is it still good idea?
Hi,
With such a tiny understanding of property investment - you would be wise to do nothing, keep the money in the bank and spend a long long time learning about property investment and financial inteligence.
There a massive financial penalties if you get it wrong
tiny10
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