Is our let-to-buy project a good idea in the new BTL environment?

Cakeguts

zoothornrollo wrote: »

Yes we have checked out the viability of the let - it is a very popular area and letting it out immediately would be 'no problem' according to letting agents we have spoken to.

We would be able to afford both mortgages yes. It would be close to 50% of our net income but that is manageable for a month or even a few.

So your only research was to ask the estate agents who might be getting it on their books to let? Do you think that there might be a touch of vested interest here?

Do your own research.

zoothornrollo_2

Cakeguts wrote: »

So your only research was to ask the estate agents who might be getting it on their books to let? Do you think that there might be a touch of vested interest here?

Do your own research.

I'm not sure that I said that was the only research we have done.
The area is very popular with corporate lets as several big companies and multinationals have HQs or offices nearby, and there is also demand from Heathrow.
We have monitored letting sites to see how long similar flats remain advertised, and whether asking rents are reduced.

Out,_Vile_Jelly

Why not just sell the flat, buy a bigger place with a garden, sit in the garden with a G&T and not worry about second mortgages, tax, and incompetent rip-off letting agents?

zoothornrollo_2

Out,_Vile_Jelly wrote: »

Why not just sell the flat, buy a bigger place with a garden, sit in the garden with a G&T and not worry about second mortgages, tax, and incompetent rip-off letting agents?

Yes absolutely that is far preferable.
Only problem is there are three similar flats up for sale on our street (probably BTL investors selling up!) and it threatens to be a race to the bottom - local market is definitely significantly softer than six months ago, with more properties coming up for sale. While the lettings trade seems to be pretty healthy.
You are right though - we will just sit tight for a year, tart the place up a bit, and look to sell then.
(Just needed to think aloud with someone who isn't my wife, as we just end up egging eachother on to do the risky thing!)

Crashy_Time

AnotherJoe wrote: »

From your figures, SDLT would wipe out the next TEN years profit on the BTL. Surely on that basis alone this makes it a non starter.

I wonder if you've also factored in the increased mortgage payments on your new residence (deducting those from any nominal profit) since you'd have a much poorer LTV.

This is such a poor financial deal on these points alone let alone the risk and hassle I can't believe you haven't discounted it immediately.

And that is in a prime location?

cashbackproblems

zoothornrollo wrote: »

Yes absolutely that is far preferable.
Only problem is there are three similar flats up for sale on our street (probably BTL investors selling up!) and it threatens to be a race to the bottom - local market is definitely significantly softer than six months ago, with more properties coming up for sale. While the lettings trade seems to be pretty healthy.
You are right though - we will just sit tight for a year, tart the place up a bit, and look to sell then.
(Just needed to think aloud with someone who isn't my wife, as we just end up egging eachother on to do the risky thing!)

And why do you think they are selling up?


Do you realise there are other investments eg stocks and shares which if taking a long term view can give you exposure to emerging markets for specialist sectors which can consistently grow 10%+ per year. PLus no tax (S+S ISA), no hassle and highly liquid

zoothornrollo_2

cashbackproblems wrote: »

And why do you think they are selling up?


Do you realise there are other investments eg stocks and shares which if taking a long term view can give you exposure to emerging markets for specialist sectors which can consistently grow 10%+ per year. PLus no tax (S+S ISA), no hassle and highly liquid

yes understood

Crashy_Time

Your mortgage payments seem big for a flat in this low rate environment, maybe I am just too used to living on the cheap........

Cakeguts

So if there are buy to let landlords selling up how do you think you are going to let your flat and make a profit?

If you sell for less in a softening market you also buy for less. You actually save money if you sell in a cheaper market than if prices are rising because you sell your flat for less and then the property you are buying costs less.

Crashy_Time

Cakeguts wrote: »

So if there are buy to let landlords selling up how do you think you are going to let your flat and make a profit?

If you sell for less in a softening market you also buy for less. You actually save money if you sell in a cheaper market than if prices are rising because you sell your flat for less and then the property you are buying costs less.

One argument would be less rental means more people chasing less rental, and prepared to pay more to get it? I believe this will be offset by Brexit among other things though.