buy to let council tax warning and other warnings

mynameisdave

ptwparkinson wrote: »

all that is happening here is that the council have found a way to make even more money --- just like speed cameras --

Councils be crafty like that - exploiting those that break the law.

What happens to all the money that is collected for speeding tickets and parking tickets because it doesn`t seem to be spent on repairing our roads --- go back 15 years --- how many pot holes were there then ???

I wasn't aware that the was specifically a rule that said it had to repair potholes. But as you ask. Any profit from speeding fines are given to the local police authority to use for road safety initiatives. Britain's roads see amongst the fewest road deaths in the world and if it means more cameras to stop people dying needlessly them bring 'em on!

ptwparkinson wrote: »

In reply to this --- a landlord does not make a big profit from buy to let rents because of mortgages etc etc etc ---- the money is made usually from the sales profits and even then there is capital gains tax to pay

They can if they buy at the right time, don't over invest in one area, and buy in the right area. You might be right at the other end of the country and never heard of it but I'm starting to think you've bought half of Rhyl, or Blackpool..

I bought a number of properties because my target for profit was somewhere around 1.5 million after 10 or 12 years from sales

£1,500,000 / 20 properties / 11 years = £6800 per year per property.

Out of interest, how much were the properties when you bought them in 2004?

Messa

@ptwparkinson give it up pal, people are analysing your every word just looking for comments they can brow beat you with. You will not win this discussion until you sell your properties and distribute the cash on this forum, I mean, how dare you try and make something of yourself and give your kids a future !?

mynameisdave

Messa wrote: »

@ptwparkinson give it up pal, people are analysing your every word just looking for comments they can brow beat you with. You will not win this discussion until you sell your properties and distribute the cash on this forum, I mean, how dare you try and make something of yourself and give your kids a future !?

You'll probably find half the people in this thread are landlords. Its not about the fact he is a BTL investor that has got him the replies

wolfplayer

ptwparkinson wrote: »

I went in with my eyes open .
if the rents had carried on rising the way they should without a credit crunch in line with earnings then the rents now would be about £ 110 per week and that would have been delivering profits but the council have as I have said actually dropped rents and they don`t seem to want to increase them so we are screwed !!!
I gues the lesson to be learned from myself is that ne matter how good things are at a certain time -- the economy can turn around and bite so hard

I'm glad my rent hasn't gone up for years to fulfil your fantasy business plan.

Tenant with savings in the bank, ready to buy from an overleveraged failed landlord.

Kynthia

Messa wrote: »

@ptwparkinson give it up pal, people are analysing your every word just looking for comments they can brow beat you with. You will not win this discussion until you sell your properties and distribute the cash on this forum, I mean, how dare you try and make something of yourself and give your kids a future !?

Most people aren't sympathetic as the OP seems to be warning other landlords or potential landlords about things they shouldn't need warning about. The cost of CT increasing on properties empty 2 years should be irrelevant as what landlord would have a property empty that long? Also the OP invested setious money in a massive portfolio if properties, therefore this was planned and they had the time and money to do proper reasesrch. However they didn't diversify, bought in an area with high risk tenants and didn't buy properties with a good rental yield but gambled only on property price increases. Yet do they realise they made very poor business decisions, no they bang on about the council???

I've no problem with landlords or people making money, but the OP had a terrible business plan which was risky and relied on the good times continuing. They don't seem to realise they should have done it better which is maddening and insults others who are professional landlords.

gallygirl

OP you've said you have other btl's in more prosperous areas. Rather than concentrating on these poor ones, what is your overall position of equity/debt? That may offer more solutions (albeit unpalatable ones).

BillJones

ptwparkinson wrote: »

point taken --- however my point about the banks is that the banking system and the special interests got all of us into this global mess and they are doing very little to help.

They lent you the money when you asked for it. Please don't try to blame them for your decision to invest it in a business that you then promptly caused to fail.

I genuinely don't understand the hypocrisy of posters such as you, borrowing money, blowing it, and then blaming the very people that were willing to believe in your business in the first place.

ptwparkinson

Kynthia wrote: »

Most people aren't sympathetic as the OP seems to be warning other landlords or potential landlords about things they shouldn't need warning about. The cost of CT increasing on properties empty 2 years should be irrelevant as what landlord would have a property empty that long? Also the OP invested setious money in a massive portfolio if properties, therefore this was planned and they had the time and money to do proper reasesrch. However they didn't diversify, bought in an area with high risk tenants and didn't buy properties with a good rental yield but gambled only on property price increases. Yet do they realise they made very poor business decisions, no they bang on about the council???

I've no problem with landlords or people making money, but the OP had a terrible business plan which was risky and relied on the good times continuing. They don't seem to realise they should have done it better which is maddening and insults others who are professional landlords.

You actually don`t know what my business plane was


I bought the cheaper ones only to keep for 3 years and sell on to make about £ 5,000 on each one ---- I would have used the profits to buy say two better ones with less leverage --- but the credit crunch came along and as we all know prices dropped considerably


I bought a mixed commercial unit in an affluent area which I got for an absolute bargain price of £ 65,000 -- 3 flats , shop unit , large separate basement and garage -- the year before the credit crunch it was valued at £ 290,000 -- we bought it in 2001


We bought our house for £ 130,000 cash in 2001 and it was valued at £ 295,000 the year before the credit crunch -- we mortgaged the house to buy the commercial building to avoid taking on a commercial mortgage ( we had the cash for the house because we had sold our house in London ) .


Took on two partners so that we could use our equities to borrow a hunting fund from the Yorkshire Bank -- we borrowed £ 220,000 which was on call when we needed it --- we bought from auctions or from distressed sellers ( we would just tell the distressed sellers that we had worked out what we could afford to pay based on yield percentages and that we could exchange within the week --- but if they needed a higher price than we were prepared to pay then we would wish them the best of luck and tell them if they were not absolutely desperate -- hang on longer because someone would probably come along and pay them more eventually -- but our discipline was not to pay more than we could afford --- we would see the amateurs at the auctions going well beyond what properties were worth and thinking that because they had bought at auction they had bagged a bargain -- when in fact some of them had paid the price they would have paid through an estate agent ) -- so we didn`t steal properties from anyone --- we were as fair as we could be --- anything that we bought we would refurbish and re-value and take out a mortgage so that we could pay back the bank to release us from the 8% interest charge on what we had drawn down --- the original allowance was £ 120,000 which was against our shop and my two partners homes -- when we increased it to £ 220,000 I told the bank that I personally would only be signing to accept the new amount if it was covered 33.3% by each partners property ---- it went totally skeewiff and I made a huge mistake by trusting the bank and signing and guess what --- there was obviously more equity in our shop so they gave us the money --- we actually spent £ 166,000 before they put the brakes on ---- now they will not renew the loan and they want their money back -- we are meeting a loans adviser today with our accountant but I will probably have to take out a mortgage for most of the money which puts the brakes on us selling our shop building until the properties held by the company can be sold to pay back the mortgage on mine --- the third partner is unable to raise a mortgage on his property because his wife didn`t pay off some credit card bills and it prevented him from re-mortgaging -- however my other partner and I will take out a charge on his property for the amount that we have raised which should have been his 33.3% contribution


we had bought a bungalow with land attached -- paid £ 200,000 for it -- used the loan money as deposit and for refurb --- the idea was to get planning permission to build a 2 bed bungalow on the land which was plenty big enough and to sell on both properties --- plans were drawn up --- planning just rejected appeal after appeal -- not within keeping with the area --- not enough space between the new bungalow and next door -- but they have given permission for 2 other developments where there is only 6 ft between the new and the established and there are windows in the existing house ---- our property was of a sympathetic design and very very similar to the existing properties

---

we rented out the bungalow and had no problem paying the mortgage etc --- then totally out of the blue the partner who can`t raise finance who is a builder -- without telling us went to see the tenant and said that she had to move out because we wanted to sell ( and this had not been discussed with myself or the other partner ) -- she had 2 children with special needs -- she panicked and decided to move back to Manchester and sorted out schools ( her children were attending the school across the road which had been ideal ) and then I found out and she said it was too late because she had made arrangements -- then the bungalow was put on the market with the agent who our builder partner does a lot of his work for -- we lost some £ 40,000 plus on that sale and it was sold on to another developer --- plus they shoved in VAT on top of what had been an agreed fee which was supposed to be inclusive and our builder partner argued in their favour --- my other advice --- be very very careful when you go into partnership and make sure that you have protected yourself with a watertight bubble and never trust the bank --- I have a letter proving what I had discussed with the bank --- by the way -- the Yorkshire Bank and the Clydesdale Banks are owned by the National Australia Bank and they have decided to clear their books of all commercial property loans in the UK !!!
And you say I can`t be blaming the economic climate for what is happening --- lives are being totally destroyed and people are not seeing the big picture and how we are all being conned and defrauded !!!!!

gallygirl

You over-leveraged, had a poor business model (any model based on capital growth over the short-term is poor) and chose poor partners - I don't see how you can blame the banks, except that they chose to lend you the money?

ptwparkinson

gallygirl wrote: »

You over-leveraged, had a poor business model (any model based on capital growth over the short-term is poor) and chose poor partners - I don't see how you can blame the banks, except that they chose to lend you the money?

COR BLIMEY --- have you not been following my two posts


originally there was nothing wrong with the business model --- we were making profits on the rents -- not huge profits but we were actually in profit

---

the credit crunch changed everything in many many ways --- capital growth was just just a natural part of the business model and it was something that we would have to wait for


don`t blame the banks --- who else is to blame for the meltdown --- they have been gambling with our money -- they have been greedy -- they have caused an almighty global depression


yes -- my choice of one partner was poor -- but you don`t know how bad that choice is sometimes until it`s too late -- my other partner has been brilliant and has always stuck by me because we are both fair people with a total grasp on reality


seems to me that in this country we get criticised for even trying to better ourselves !!! so what`s the point anymore


if you are so clever let`s be hearing how you have succeeded and see if you can teach any of us anything -- what have you done with your life ?