For all the BTL fans

chewmylegoff

cells wrote: »

I must be doing well in the choices of what i buy then

I suppose it's easier if you just make some numbers up and you don't actually have to buy the property or rent it out.

Generali

chewmylegoff wrote: »

The best example of this I ever saw was a guy drawing down cash advances on his credit card and using the money as margin on CFD trading in an AIM oil exploration company. He lost his shirt but at least he had the sense to buy CFDs rather than spread bets so his losses were tax deductible...

What could possibly go wrong? :rotfl:

cells

chewmylegoff wrote: »

I suppose it's easier if you just make some numbers up and you don't actually have to buy the property or rent it out.

if you say so

Graham_Devon

cells wrote: »

The return on capital invested is indeed higher than the return on capital employed

In total its more like £500 + £15 stamp duty + £10 other (refurbish legals etc)

So 27 rent over 525 cost is ~ 5.15% gross on capital employed

Or 9 pre tax profit / 150 capital invested = ~6.0%

OK, but the problem is, you have mentioned 3 bed houses getting the sort of money you are looking at achieving.

The lowest priced 3 bed house I can see available today thats 3 bed and in south hackney is £650,000.

Where are you going to get one for £500,000? One that doesn't need work done on it?

lisyloo

I was renting at St George's wharf which is pretty "swanky". We were paying £1500 direct for 1 bed (the market rate via an agent was £1800, so I'll raise to £21,600).
maybe landlords don't get such a good deal in zone 1 as prices are so high?

chucknorris

Graham_Devon wrote: »

So you are expecting a yield of 9% from month 1?

In London?

Double, and in some cases, 3x the average yield?

Good luck.

That would be a 5.4% yield (not 9%) Graham. I have a flat worth about £485-£500k in London (SW11 Battersea) the rent is £21.6k per annum (so a yield around 4.4%), we used to rent it cheaper, but very recently we increased the rent to nearer (but not right up to) the market value.

Generali

colsten wrote: »

An interesting story that I will follow to see whether they are making a profit. Assuming they will keep their blog running.

http://www.arbing.co.uk/london-property-investment/

It's a really interesting website. There's a great piece on getting a business selling ping pong bat covers going.

While we're on the subject of BTL, I've not seen this on here:

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11816720/Death-of-buy-to-let-landlords-wake-up-to-Osbornes-150pc-tax.html

Hundreds of thousands of landlords and their accountants are digesting the impact of George Osborne’s shock tax change unveiled in the summer Budget on July 8.
The tax increase, on which there was no consultation, will be phased in from 2017 and fully implemented by 2020.
The change was unexpected, and the new regime is highly complex, so investors and their tax advisers are only now fully grasping its effects. Many investors remain unaware of the change, or underestimate its severity.
All higher-rate taxpayers who own buy‑to‑let properties on which there is a large mortgage will pay substantially more tax. Some current basic-rate taxpayers will also be hit, because the change will push them into the higher-rate tax bracket.
Those who are worst affected will see:
● the actual tax they pay on their investment rising twofold or more;
● the tax rate payable rising above 100pc, meaning that more than all of their profit is paid in tax;
● a degree of tax that pushes them into loss, making their investment financially unviable and forcing them to increase rents sharply – or sell.

chucknorris

Generali wrote: »

It's a really interesting website. There's a great piece on getting a business selling ping pong bat covers going.

While we're on the subject of BTL, I've not seen this on here:

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11816720/Death-of-buy-to-let-landlords-wake-up-to-Osbornes-150pc-tax.html

That is a particularly poorly written article, I wonder if the writer didn't fully understand the forthcoming tax changes. It doesn't even mention the withdrawal of the wear and tear allowance. There is a thread on this:

https://forums.moneysavingexpert.com/discussion/5286112

EDIT: Or did you mean that the (potential) impact of the forthcoming changes (hasn't been seen on here)?

sthrax

So does the tax changing mean he's got it wrong and is in fact making less than £66 a year? That's pretty bad!

chucknorris

sthrax wrote: »

So does the tax changing mean he's got it wrong and is in fact making less than £66 a year? That's pretty bad!

It should never be about the first year's profit, property is a long term investment. Our properties only made a small profit in year one, but now our annual rental profit is significant.