Bishop Bashes Boomers

IveSeenTheLight

Percy1983 wrote: »

As I said its only if tenants don't pay and landlords have to do the unthinkable and contribute towards buying there own asset that there may be problems.

Can you direct me to another business that provides a service / rents an asset etc free of charge?

Why should any business provide goods free of charge?
That would be a recipe for a failing business.

Percy1983 wrote: »

I good business minded landlord should be able to absorb voids so it makes sense why the figure is lower.

Voids are a separate issue.
A void is a period when the property is not leased.
I do agree that most business minded LL's factor in void peiods, however I can also relate that in the last 6 1/2 years of leasing properties, I've had 16 days void over three properties.

Voids can be avoided if marketed correctly

Percy1983 wrote: »

It would be interesting to compare how many tenants are in arrears compared to how many landlords are in arrears.

It would be interesting.

The below is not a true comparison but roughly
http://www.guardian.co.uk/money/2013/jan/18/rent-arrears-high
10.1% of tenants rent was in arrears



www.cml.org.uk/cml/media/press/3517

of over three months, only 8.3% were buy-to-let (down from 9.0% the previous quarter and 10.5% in the first quarter of last year).

Mortgages were a lower percentage.

Percy1983

IveSeenTheLight wrote: »

Can you direct me to another business that provides a service / rents an asset etc free of charge?

Why should any business provide goods free of charge?
That would be a recipe for a failing business.



Voids are a separate issue.
A void is a period when the property is not leased.
I do agree that most business minded LL's factor in void peiods, however I can also relate that in the last 6 1/2 years of leasing properties, I've had 16 days void over three properties.

Voids can be avoided if marketed correctly



It would be interesting.

The below is not a true comparison but roughly
http://www.guardian.co.uk/money/2013/jan/18/rent-arrears-high
10.1% of tenants rent was in arrears



www.cml.org.uk/cml/media/press/3517

Mortgages were a lower percentage.

I suppose its hard to compare directly as I would guess there is many LL's which no finance on properties. to which its probably in the margins.

Can you think of any other buisness where you rent an asset out and the asset actually goes up in value? geniune question as I can't.

CLAPTON

Percy1983 wrote: »

I suppose its hard to compare directly as I would guess there is many LL's which no finance on properties. to which its probably in the margins.

Can you think of any other buisness where you rent an asset out and the asset actually goes up in value? geniune question as I can't.

for most products, if the demand increase more are produced.

for houses this doesn't happen

we need to build more

IveSeenTheLight

Percy1983 wrote: »

Can you think of any other buisness where you rent an asset out and the asset actually goes up in value? geniune question as I can't.

For a rental business, usually you factor in depreciation of the asset

For property rental the main residence is not treated as a depreciating asset, that said, capital gains are also applied and remember Capital Gains are not real term adjusted.

To answer your query above, it depends when you bought and sold.
There may be instances where an BTL asset is sold for less than it was bought for.
For most over the longer term, this will not be the case.

Incidentally, I note you have not been able to answer the question I posed: -
Can you direct me to another business that provides a service / rents an asset etc free of charge?

Conrad

grizzly1911 wrote: »

You are a seasoned professional I am sure there are many chancers who aren't in as such a strong a position.

I doubt interest rates will rise for a while yet but when they do there is no guarantee they won' rise quickly and leave little room for said chancers to manage their position.

This is precisely the bears argument from about 2005 when they promised us all those chancer numpty LL's would definitely bail out as prices and rents fell, after all "most are only in it for capital growth":rotfl:

Lender reps always say to me that B2L arrears are the lowest category, and equity abounds.

Seriously grizzly I find the vast majority of LL's to be grounded, cautious and street wise. Very few will bail. Also if interest rates do rise that's a fair signpost the economy has improved meaning property prices will have risen anyway.

Conrad

Percy1983 wrote: »

Can you think of any other buisness where you rent an asset out and the asset actually goes up in value? geniune question as I can't.

An airport letting out bays and an office to a taxi company? A station letting space to a pasty or coffee outlet?
A theatre letting space to a production company?

In general, productive space will increase in value.

Percy1983

IveSeenTheLight wrote: »

Can you direct me to another business that provides a service / rents an asset etc free of charge?

I will admit this is a bit of a cop out, my business does.

grizzly1911

IveSeenTheLight wrote: »

Can you direct me to another business that provides a service / rents an asset etc free of charge?

Why should any business provide goods free of charge?
That would be a recipe for a failing business.

You are right that it woul db emad to let out propperty for free.

No doubt your tenants are fully vetted including fianncials , with a deposit, before you woul dallow them in. You are therefore on a strong footing.

For those that allow HB clients they have a guaranteed rent.

So as you point out defaults should be very low.

I suppose 8.3% of the arrears in that context may be considered relatively high.

CLAPTON

grizzly1911 wrote: »

You are right that it woul db emad to let out propperty for free.

No doubt your tenants are fully vetted including fianncials , with a deposit, before you woul dallow them in. You are therefore on a strong footing.

For those that allow HB clients they have a guaranteed rent.

So as you point out defaults should be very low.

I suppose 8.3% of the arrears in that context may be considered relatively high.

I freely admit I have no idea what level of arrears is reasonable but equally however do you come to the conclusion that 8.3% of all arrears is relatively high?

What calculation do you do to reach that conclusion?

What relationship is there between arrears of residentual mortgages and BTL? Why would we expect one.
apples and pears to me

grizzly1911

CLAPTON wrote: »

I freely admit I have no idea what level of arrears is reasonable but equally however do you come to the conclusion that 8.3% of all arrears is relatively high?

What calculation do you do to reach that conclusion?

What relationship is there between arrears of residentual mortgages and BTL? Why would we expect one.
apples and pears to me

ISTL reveals that ~13% of mortgages are BTL but only ~8% of arrears are BTL.

If a BTL er has done the homework correctly then closer to zero should be in arrears. They are businesses letting out properties and should have allowed for some void periods and or maintenance/refurbishment slots in their cash and liquidity flows. Accommodation is in demand. Rents are increasing apparently.

I am not suggesting there is any relationship between a residential mortgage and a business letting residential property other than the fact the underlying security will be a residential property.

IMO BTLs shouldn't be classified as residential they are business debts and shouldn't be afforded fine mortgage rates.

ISTL made the point that arrears in BTL are lower than normal mortgages.