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

sm9ai

Why don't you just re-mortgage your house and invest it all in the stock market.

If you would not be willing to do this then don't get involved in btl.

mystic_trev

I've said it before and I'll say it again. How many newbie (last two or three years) BTL'ers, would think of Investing in any other type of 'negative geared' Investment? They seem to think they understand Property, but don't undersatand cycles and bubbles!

silvercar

My BTL cost £200k and rents out at £800 per month, so similar scenario.

I only bought it to complete a house chain and buy my dream house, so not really BTL more BTB.

To all of you who believe that I am subsidising my tenants etc, firstly I did my homework - the place was rented out within 2 weeks of completion with what will hopefully prove to be a long term and reliable tenant. My deposit is invested (=tied up) in the place but the rent covers the mortgage so this is a long term investment for my pension etc.

Now had I not done it my house purchase wouldn't have gone ahead. Had I tried to buy my house again this year (pesuming no other buyer had zoomed in) prices have gone up so much I wouldn't have been able to afford it.

So my BTL has actually delivered my house move.

dannyboycey

Helonearth wrote: »

Why thank you Danny. Can I just point out the little note to the right of your screen entitled Forum Etiquette. The first paragraph reads thus:

Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.

Apologies if my comment caused offence. I was just amazed by your logic!! People just wouldn't make these crazy decisions if they were investing in an area other than property. Take this scenario as an example:

The market goes into decline and when the market hits bottom in say 5 years time, 40% is wiped off the value of your house. That's minus £60,000. Assuming you had a tenant in there for the whole 5 years making you a whopping minus £300 a month - That's another £18,000 deficit over 5 years - and we're not even taking into account insurances, taxes, repairs etc.

So.... over 5 years, you LOST £78,000!!!!!

It's a possible scenario, so don't say you weren't warned.

CB1979_2

@ "mystic"_ trev - yes but that wouldn't be the last 2 or 3 years that people & "experts" have been predicting the bubble bursting

personally would not be interested in this kind of deal where you're subsidising half the mortgage payments.

I assuming that it's quite a rubbish area, you'll be adding AT LEAST £3.5k to the "price" of the place, is it likely in the area the property prices will be going up by £3.5k each year?

I would consider subsidising for £50-100pcm on something that I was HOPING to go up in value by at least £5k a year , to me now that's not too bad, "invest" £1000 & get back £5000.

but i think you're very optimistic on that one, th eonly good thing you have in your favour is the fixed rate IMO