New at buy to let .. help!

m00m00

My point was missed

i was deliberately NOT talking about HPI at all, I actually said it didn't matter in the short term

i said what is most important of all at the moment, is the YIELD you will receive for your expenditure. Even at a BMV will the mortgage be covered by the rent. I think Generali's landlord is paying well over 30% extra on top of the rent being paid, according to one of his posts.

Generali

HugoSP wrote: »

With a number of BTL investors having got out of the market recently, there will be a shortage of reasonable places to rent in the future, so, according to the principles of supply and demand, anyone thinking of a BTL at the moment could be in a very good position in the future if they choose their property carefully now.

It's my firm belief that if/when/as house prices fall, rents will rise in nominal terms as well as relative to the value of the house/flat for this very reason (pretty much anyway).

I also suspect that it won't last as the unfortunate would be sellers find that in a falling market, sometimes there aren't buyers at any price they can afford to take! They'll be forced to go back to renting it out in an attempt to cover mortgage costs.

In general I would agree with what you've said but I don't think it will take that long for the market to recover. Judging by the last crash it may take around 5 years, depending on how much below BMV the OP paid for it. Also I fear that BTL investors could once again push the market up, or stop it falling below prices that would make acceptable investment yields, given the low interest rates we have compared to the late 80s.

I was refering to being able to reduce risk to almost nothing rather than making any prediction about future house prices.

I've got a horrible feeling that the most likely outcome is that they won't recover (like the NASDAQ post dot com or Japanese house prices) but what do I know.

Generali

m00m00 wrote: »

My point was missed

i was deliberately NOT talking about HPI at all, I actually said it didn't matter in the short term

i said what is most important of all at the moment, is the YIELD you will receive for your expenditure. Even at a BMV will the mortgage be covered by the rent. I think Generali's landlord is paying well over 30% extra on top of the rent being paid, according to one of his posts.

My LL pays about double my rent.

From the mortgage statement I think he's got a self cert OO mortgage!!!

BettiePage

granville wrote: »

With all due respect... you've just spend £73K on a BTL and are asking basic BTL questions on a money saving board?!?

Did you not research this prior to buying? Has the world gone mad?
:eek:

Granville, you forget. People put more thought and research in to which car or tv they're going to buy than they do when spending 10's or even 100's of thousands of pounds on a property. :rolleyes:

thriftybabe

Ok guys some harsh words have been said but here is my look on it. I have a tenant who is very interested in renting this (another reason why i bought in this area. A young couple who do not like where they are renting at the moment and are looking to move to a cottage flat but cannnot afford the mortgage themselves!). I will have a tenancy agreement in place that has been sorted through a lawyer shortly. I do have a very up-to-date book on how to avoid property tax but was a bit bamboozled by some of the terminology and all I was hoping for you guys here could make things a bit clearer. The property is outside Glasgow and the prices of the same type of property have gone up from 55k to 75k in the last 3 years. The property is a lower cottage flat - 2 bedroom. Nothing needing done so tenant can move right in. I have done a bit of research on this and think I should be okay. I have put a 20k deposit on the place and my rental income will cover my mortgage no problem. I am looking to have this long-term and just want to dip my toe in the water! Thanks to everyone who has clarified some of the areas regards interest on mortgage etc.

thriftybabe

Sorry one other thing prices in Scotland have not fallen the way they have in England and the south. They have slowed down but I do not think there is going to be a price crash here.

motch

Need to include the loss of interest on the £20k deposit to make a fair calculation of the yield, approx a grand a year at say 5%

epz_2

eco-friendly wrote: »

glasgow is a capital G sassenach !

didnt reaslise that living 7.4 miles south of glasgow made me a southern, ill call my home town what i want, mostly a sh!it hole

epz_2

thriftybabe wrote: »

Sorry one other thing prices in Scotland have not fallen the way they have in England and the south. They have slowed down but I do not think there is going to be a price crash here.

edinburgh has seen prices drop 5% in 3 months and that is without hips, also our economy is a lot more dependant on the public sector which is going to need cutting back

clutton_2

additional expenses may include

CORGI gas certifixate annually
insurance
repairs and redecoration
office/stationery/print/postage
travel to and from if you are self managing 40p per mile
mortgage interest
membership of landlords association
% of of home utilities if you have a dedicated office at home to run your
business from
utility bills inbetween tenancies
emergecy repairs such as boiler breakdown
cleaning in between tenancies
inventory company to do inventory on check in and check out
cost of joining Tenancy deposit scheme

court fees if you cannot get a tenant out

loss of rent if they stop paying


and

so

on

all of these are offsetable against rental income profit.