want to buy and then rent out

HugoSP

Doozergirl wrote: »

Wow, Stabilo, that's a veritable goldmine of information you've got on that forum. Where did you find so many experts? :rolleyes:

Which forum was that? doozegirl, can you please point me in the direction of the post you replied to.

Thanks

Doozergirl

It was a blatant bit of Spam, Hugo.

brasso

BTL has been a good investment for many, but I'm shocked to see that so many people still think it's a good thing to get into.

With a BTL mortgage, it's very hard to make the sums add up. In a time of high HPI, capital appreciation made up for this but we seem to be seeing a decline in HPI now. It's only London and Northern Ireland that seem to be still buoyant, and are skewing the overall figures.

When you think of all the expense and hassle of buying and selling property, and the potential problems of voids, bad tenants and repairs, and at a time when prices are looking to be dropping, then I wouldn't recommend it to anyone.

If it's investment you're after, you need to be ahead of the market, not clinging to its coat-tails as it vanishes into the distance.

I've been an unintended BTL myself, incidentally, so I do have personal experience. As I said, I know that many people who bought before now have done well out of BTL but I find it hard to see how the sums make any sense now.

HugoSP

Pssst wrote: »

Many BTL-ers are naive about the whole market. There are hoards of renters out there who thrive on it.. They put up a very legitimate front,can even provide refs etc ,then they move in,soon you find your rent isnt forthcoming,then you are paying wads to solicitors etc and taking months to move em out. When you finally get rid of them,they have trashed your place and left it debt ridden with all the people they have ripped off along the way,including you.

You are absolutely spot on. I have had a couple of tenants who were nothing but trouble. The fact is that we were using an agent who seemed to attract and give the keys to this sort of pondlife!

I sacked her after no 2 and then set about gettig rid of him. She was the naive one. Even I know you don't take a tenant without a deposit. She was also negligent into the bargain.

Another agent I went with helped me get rid of tenant No 2 who was so high most of the time he didn't even think about challenging it. He was also known to the police. At one time they wanted to raid the flat he was in and I offered to make myself available with the keys to the door. The raid was called off in the end, but as I had offered to cooperate with then the CID officer was happy to sneak out any info as to his wareabouts so that I could simply get him to sign a bit of paper releasing funds to me from the housing benefit office. I did pursue this but he kept getting kicked out of digs so I decided to leave it as it was taking up too much of my time for the sums involved.

Pssst statement should be kept in mind by even the most experienced of LLs IMO. No one is infalliable. We just need to mitigate the risks involved.

The tenant in the flat at the moment has been there for about 7 years and has never caused any issues. The other tenants we have are by word of mouth.

One was recommeded to us by an estate agent of good standing in our village. He would not even consider taking any sort of intriduction fee as her daughter was a friend of his and he considered that I was doing him a favour by accomodating her.

Another tenant was recommeded to us by the previous tenant in the same property who had unextectantly come into some money and therefore decided to buy her own place. As she handed her notice in she advised us that friends of hers were coming back into the UK after spending time abroad and needed a place to come back to. They took the house on her recommendation without even seeing it!

As a LL I often get people phoning and asking if I have property to let. Most of the time I have to turn them down or refer them to other people in my network.

dannyboycey

HugoSP wrote: »

How do you know this? Over the next 10 years we will enjoy a reasonable increase in capital and the rent we get will increase as well.

Where are you getting this certainty from? Do you have some kind of 'insider knowledge'? There's nothing to say that in 10 years time, your property wont be valued less than it is now!!

This kind of blind faith in house price inflation is very foolish indeed.

PropertyGuru

go for it Woody. (as in the thick barman in 'Cheers'?)

We have just ended a decade-long bull run in which asset prices (including property) have risen aster than in any other period IN HISTORY. The rest of the world has already started the down-leg back to normalcy, including the USA, Ireland, France, Spain, Oz. The UK this year will join them, and the 'tipping point', with hindsight will be seen as Q107.

So now is FABULOUS time to implement your masterplan. Buy at the very top, pay absolute top dollar, subsidize a tenant while still living at mummy's.

Superb! Just think how well you'll know your tenant in 10 years time when the bottom of the down-leg is reached! And how grateful he will be for you subsidix=zing him for a decade so he can save a deposit for a house of his own (that he will buy at the absolute bottom).

you truly are a saint.

Say hi to you Mum for me.

realwildone

I cannot believe this thread. But most important I cannot believe there are people out there telling this poster to 'go for it'.

IR are going up at least another twice if not more. Can the poster stand any voids. Doesn't sound to me like they could stand a round at the bar.

Do yourself a BIG favour. Stay where you are and save. Remember that old word 'SAVE'. People used to do this once upon a time.

It is most likely now IR will go up, house prices will stay static or go down. Savings rates are going up. It can only take an MSE poster to come to the conclusion that this means buy a house to rent out.

Absolute insane stupidity.

sikejsudjek

Herd economics. Most of the BTL'ers in the market have bought at the top, and will end up selling at the bottom. Happens every time in every asset bubble. The smart money is getting out of BTL. The clueless hopefuls won't be able to get out in time. When it crashes, it will fall quickly. The same sentiment that got people taking big risks with massive loans and in the process pumping up house prices, will work in reverse when they all run for the exits. With property timing is everything.

Sure go ahead and buy a BTL. Remember whilst house prices are a matter of opinion and can go up or down, debt is real. Once you sign on the dotted line, when prices fall you will end up with negative equity. Not so easy to walk away from. It won't be long until you see many bankrupt with large portfolios.

As for those intending to buy at the top of the market with interest only loans, frankly you are insane. The truth is that at present a better investment than BTL is just putting the money in a tax free savings account, such is the poor return from rental. Tenants are a pain in the butt. Our 'model tenant' was great for 3 years, then he decided to hit the bottle again and almost burnt the place down twice. Almost everyone I know who rents out property has problems at some point. Being a landlord is not so easy, and its going to get tougher as a result of Government legislation. Its also a nice easy target for Gordon when he wants some more tax.

The BTL market is like watching herd of sheep running off a cliff, and the first few are already falling off the edge.

dannyboycey

PropertyGuru wrote: »

go for it Woody. (as in the thick barman in 'Cheers'?)

We have just ended a decade-long bull run in which asset prices (including property) have risen aster than in any other period IN HISTORY. The rest of the world has already started the down-leg back to normalcy, including the USA, Ireland, France, Spain, Oz. The UK this year will join them, and the 'tipping point', with hindsight will be seen as Q107.

So now is FABULOUS time to implement your masterplan. Buy at the very top, pay absolute top dollar, subsidize a tenant while still living at mummy's.

Superb! Just think how well you'll know your tenant in 10 years time when the bottom of the down-leg is reached! And how grateful he will be for you subsidix=zing him for a decade so he can save a deposit for a house of his own (that he will buy at the absolute bottom).

you truly are a saint.

Say hi to you Mum for me.

:rotfl::rotfl::rotfl:

Dead_Eye_Jones

Its a risky plan, but may pay off. Remember houses prices can go up and down. You could also consider living in a larger place and taking in a lodger? Halving all the bills until inflation/promotion ensures your wages cover the morgage.

margaretclare wrote: »

If they agree to allow you to live at home for free, more fools them.

Allowing your children to live with you. Wow those crazy fools! Im gonna kick my kids out at 16, bloomin parasites. Take take take. One wonders why anyone has them.

:rolleyes:

My folks let me live at home (for "free") after uni whilst I found my feet. Thanks M&D! Guess Im lucky to have parents who wanted me around - I appreciate not everyone is this fortunate.