Buy to let sums - flat comparisons

rizla01

I have a one bed (Not new build) in Essex. Cost £66k. Spent £3k & 8 weeks developing it and is now worth £80-85k. Rent is £450 Pcm.



I also don't see how new builds stack up unless as you say you rely on the rising market (big if) but overall they are a better investment than a pension these days, which is what they are mostly being used for. In 20 years time they almost certainly WILL be worth more but how much more no-one can guess.

If you look around though, and do your homework you can still find bargains. My partner (A new-homes saleslady) was selling some 2 bed flats for a small time developer for £135k (4 mths ago) and they are now letting for £650 pcm. The ones on the top floor rent for £700. (3 storey)

Property investment is and always will be a gamble. Your abilities and wisdom will decide how much of a gamble.

geo555

Dont forget the Tax liability.
You do get relief on mortgage interest, but not capital repayment.

This site will give you more info
http://www.yourmortgage.co.uk/03_btl/btl3.htm

rizla01

Giving further thought to this subject, I think that a lot of people buying props and subsidising the mortgage are doing this instead of paying into a pension fund.

They are happy to pay out for the probable returns which historically have always been high whereas pensions are dismall, to say the least.

If you can purchase WITHOUT subsidising then all the better but in my experience, you can only succesfully do that with the older properties and the type of tenant will be reflected in this.

I would be very interested to know who it is that mainly invests in property.

If it's mainly working class then that would worry me somewhat. If it's mainly the company directors & higher management then I would feel safer.

The reason I say this is because I can imagine a few years down the line the Government could see this as a means to make more money and if the working classes are the main investors then you can be sure that they will, whereas if it's the higher echelons of society that are the majority of property investors then, my guess is that the goverment wouldn't dare to levy huge taxes on these people.

Can you imagine the problems of a sudden multi-owners tax being imposed and everyone selling their flats like crazy? Prop prices would collapse and cause huge hardships for those investors.

FTBs would be in their element.:)

Anyone else got any thoughts on this?

kinster_2

rizla01 wrote:

I would be very interested to know who it is that mainly invests in property.

If it's mainly working class then that would worry me somewhat. If it's mainly the company directors & higher management then I would feel safer.

working-class? middle-class? directors? higher management? They're all in the same category as they are all dependent upon a job and can't survive without it. If you're basing it upon disposable income a lot of non-managers/directors etc 'earn' more. So to me they're all in the same category as they seek job security.