Buy To Let - would you pay £150K for a £625 BTL ?

Doozergirl

Come on pickles, did you buy these properties last week or what?

wecanhelpu

Sorry for the confusion. I'll try to make my point as clearly as possible

1. Since I did not buy my properties with the intention of letting them then, by definition, I am not a BTL landlord.

2. Because I own 3 properties it does not mean that I see them as a "pension"

3. The words "property ownership" and "investment" do not automatically mean the same thing

4. If I was to enter this farcical charade of debt masquerading as wealth, which is BTL, I would certainly not be doing so by remortgaging my home to pay for a deposit.

5. When people talk of subsidising their tenants to the tune of £200 p.m. they often overlook the fact that they have borrowed money in order to pay a deposit on thier BTL property.

To sum up:

I am not stupid and I am not greedy.

And I know of far better places to invest my money

Generali

pickles110564 wrote: »

When I retire in 20 years time how much would I have had to pay into a pension fund to bring in £2200 per month ( that's with rents staying at current level) ?

According to the FSA website, £900pm for 20 years will provide that in annuity income at age 65 for a man.

However, if the £2200 pm is compared with an annuity, you're not comparing like-with-like. Your property is likely to be a good hedge against inflation which an annuity is unlikely to be. Your annuity isn't going to do a runner without paying you or call at 3am to complain that the lights don't work.

What would be correct would be to compare the annuity with the income you could realise in 20 years by selling your investment.

Out of interest, what level of leverage are you on (including money borrowed for deposits if that's what you did)?

ManAtHome

pickles110564 wrote: »

When I retire in 20 years time how much would I have had to pay into a pension fund to bring in £2200 per month ( that's with rents staying at current level) ?

Are we talking apples and pears here..? Example was £500 pm mortgage - can't see this returning £2200 pm rent, or do you mean rents staying at current levels but increasing by 5% pa..?

Doozergirl

ManAtHome wrote: »

Are we talking apples and pears here..? Example was £500 pm mortgage - can't see this returning £2200 pm rent, or do you mean rents staying at current levels but increasing by 5% pa..?

Pickles is talking about themselves.

Again.

rizla01

Why would you want to pay £150 for a £650 PW return when you can buy an £100k, 2Bed property with a similar return in other parts of the country?

OR better still pay £85k and spend £15k doing it up for the same return.
(Claim relief on the £15k, before you ask.:))

Alan_M_2

I think a lot of the problem with the fascination in BTL is the misuse of the word "Investment".

I will expand:-

Buying a property that generates enough income annually in rent to cover the cost of purchase, maintenance, voids and standard overheads, plus a little extra on top, that's an investment.

Buying a property that is break-even annual income, or even requires subsidy to keep occupied is relying on one thing only and that is increase in capital value. That's speculation, not investment.

BTL 10 years ago was a great investment, in those 10 years the investors also benefited from huge capital growth, this was the cream on the cake. Now 10 years on, people are looking back and saying to themselves, "look how much money these people have made by buying a house and getting someone else to pay for it".

Look at the market now and in a reasonable number of areas (but not all I add) there is no viable BTL investment. At least not what I consider to fall under the meaning of the word "Investment".

wisbech_lad

Housing has a few issues as a pension that you need to be at least aware of

- Regulatory risk. In the last 30 years, how often has tenancy law changed? It is a dynamic, and political, area of the law.

- Asset risk. An annuity is not counted as an asset AFAIK for means testing.

- Liquidity risk. Property is not a liquid asset (i.e. it takes time to sell, and it is not certain that you will sell it - chains break down etc.)

- Management risk. Yes, you can appoint a property manager, but at a cost. But when you are 78, do you want to be dealing with burst pipes?

Having said that, property does have a place in a portfolio. I've got about 10-15%, but mostly commercial shares/ trusts/ reits. And a small property development for family reasons... (actually, that was quite fun, a small middle income development of 10 townhouses, building out some family land along with FIL and BIL's)

TinLondon

I think the key is to find a buy to let that meets your requirements. Some people want to take greater risks and others don't, so I would suggest look around at other areas in the UK too.
Sometime I find it useful to check out property investment companies websites cause they will usually have location of properties where they think it may be worthwhile investing. Could be a good starting point for research and don't forget that a lot f buy to let mortgage rates are actually lower then residential. My starting point would be do a lot of research before buying anything.

Good luck!

poppy10_2

BTL now is asking for trouble. Seriously, don't do it.