Risk

dryhat

chucknorris wrote: »

How much do you have to put in? We are expecting to put in at least 110k on our next investment property (if/when a suitable property becomes available):

£82.5k - 30% deposit
£13k - allowance for initial work
£8.25k - stamp duty
£3.5k - fees (solicitor, val, mortgage etc)
£3.5k - furniture

Surely the minimum investment isn't more than 110k!

You crack on mate.
Best of luck.

I'm not here to argue about which investment gives the best return.

I just answered a previous poster's query about what I'm doing at the moment.

I'm happy with where it's going.
Just wish I was getting repaid in bitcoins.

chucknorris

dryhat wrote: »

You crack on mate.
Best of luck.

I'm not here to argue about which investment gives the best return.

I just answered a previous poster's query about what I'm doing at the moment.

I'm happy with where it's going.
Just wish I was getting repaid in bitcoins.

I think you missed the point, I was responding to your comment of:

Obviously these schemes wouldn't suit your average BTLer because it is not a leveraged investment and you need to have some money of your own.

Making the point that even in a leveraged investment you have to put in money of your own.

I would also add that the advantage of a leveraged investment isn't that you don't put money in, it is that any capital gain is magnified, for example the house we would be looking to buy would be approx 275k. But as we would only be investing 110k, for example a capital gain of 2.5% becomes:

2.5% x 275k = £6.875k

£6.875k/110k x 100 = 6.25%

dryhat

chucknorris wrote: »

I think you missed the point, I was responding to your comment of:

Obviously these schemes wouldn't suit your average BTLer because it is not a leveraged investment and you need to have some money of your own.

Making the point that even in a leveraged investment you have to put in money of your own.

I would also add that the advantage of a leveraged investment isn't that you don't put money in, it is that any capital gain is magnified, for example the house we would be looking to buy would be approx 275k. But as we would only be investing 110k, for example a capital gain of 2.5% becomes:

2.5% x 275k = £6.875k

£6.875k/110k x 100 = 6.25%

Thanks.

I think you missed the word "average".

Now, your average BTLer (recent entrants with one or two properties on IO mortgage) hasn't got a pot to p155 in.

Without HPI, "equity" and more borrowing they have no deposit.

So making money from lending to small businesses is not an option.

IveSeenTheLight

Graham_Devon wrote: »

I dunno why you are asking me this?

It's a bit random old fella.

It's not random at all.
The thread is about risk, lending, borrowing and investments.

You brought BTL into the thread and I was asking you

Originally Posted by IveSeenTheLight
What investment would you recommend in the current market that provides a return with a reduced risk basis?

IveSeenTheLight

dryhat wrote: »

Thanks.

I think you missed the word "average".

Now, your average BTLer (recent entrants with one or two properties on IO mortgage) hasn't got a pot to p155 in.

I wonder if you consider the use of the word average.

I would presume (not looked to see if the stats can be found), that your "average" BTLer is not recent entrants with one or two properties on IO mortgages.

I also spot a contradiction in your statement regarding the "average" BTLer not having a pot to !!!! in.
In order to get a BTL mortgage, you need to put down at least a 20% mortgage.

IO mortgages make good sense for the BTL LL as it maximises the tax benefits and retains more profit which can be used to invest elsewhere.
There's no point in having excess equity tied up resulting in more profits being taxed.

chucknorris

dryhat wrote: »

Thanks.

I think you missed the word "average".

Now, your average BTLer (recent entrants with one or two properties on IO mortgage) hasn't got a pot to p155 in.

Without HPI, "equity" and more borrowing they have no deposit.

So making money from lending to small businesses is not an option.

I didn't miss your 'average' but I think you are assuming a lot there, unless of course you have spent a lot of time surveying residential property investors. Do you really think that you are qualified to comment on the 'average' residential property investor? I'm a chartered surveyor and have been an investor for almost 22 years but tbh I don't feel qualified enough to express an opinion as to the financial position of the 'average' investor.

crash123

chucknorris wrote: »

I'm a chartered surveyor

I would be interested to know how you would value a piece of land/property with a right of way that runs through not just the land but the building on it?

dryhat

IveSeenTheLight wrote: »

In order to get a BTL mortgage, you need to put down at least a 20% mortgage.

Which in most cases comes from remortgaging an existing property.

Which most people ignore when calculating costs.

I am personally aqcuainted with many BTL investors and mortgage advisors and can tell you for a fact that without equity from HPI, most, if not all, are skint.
These people are your average and are representative of the whole.

100% guaranteed.

Anyway, I am in the business of lending not borrowing.

dryhat

chucknorris wrote: »

I didn't miss your 'average' but I think you are assuming a lot there, unless of course you have spent a lot of time surveying residential property investors. Do you really think that you are qualified to comment on the 'average' residential property investor? I'm a chartered surveyor and have been an investor for almost 22 years but tbh I don't feel qualified enough to express an opinion as to the financial position of the 'average' investor.

I have been a property investor for slightly longer than you then.

And I do feel qualified to express an opinion.

Which in this case is 100% fact.

purch

How can a Fact also be an Opinion ? :eek: