Landlords enjoy windfall from global storm

teabelly

Question is how much cash have landlords got in the bank to cover rental shortfalls. Cash flow is the key as to whether BTL LLs will go bust or not, rather than negative equity. How many months full mortgage payments/full costs for all your properties do you professional landlords keep in hand?

Generali

teabelly wrote: »

Question is how much cash have landlords got in the bank to cover rental shortfalls. Cash flow is the key as to whether BTL LLs will go bust or not, rather than negative equity. How many months full mortgage payments/full costs for all your properties do you professional landlords keep in hand?

You've hit the nail squarely on the head, like it or not, BTL is a business not a pure investment. Cashflow is everything.

As most BTLers are older with big deposits and most probably with other savings and investments they should be fine. There are a smaller number as far as I can tell of high risk-taking LLs that are more likely to get into strife.

Interesting times old fruit.

Let us not forget that prices are set at the margin not by the average so a relatively small number of forced sellers can move the market. The same is true of eager buyers of course.

MissMoneypenny

teabelly wrote: »

Question is how much cash have landlords got in the bank to cover rental shortfalls. Cash flow is the key as to whether BTL LLs will go bust or not, rather than negative equity. How many months full mortgage payments/full costs for all your properties do you professional landlords keep in hand?

My friends young daughter can't pay her mortgage if the tenant doesn't pay. She has had a couple of scares where the tenant (who runs his own business) has been late. So far, she has just had the rent in time to avoid a missed mortgage payment.

mystic_trev

Generali wrote: »

Let us not forget that prices are set at the margin not by the average so a relatively small number of forced sellers can move the market. The same is true of eager buyers of course.

Another 'word of wisdom' G. Many think that because most wil be OK then it'll all be just that - OK. Most BTL's (and home owners) will be just fine, and I'm talking about over 95% of those. It's the minority (with problems) that'll cause any correction. It just needs a few and the whole 'pack of cards' will collapse. Many recent 'Investors' who subscribed to the likes of Inside Track will find their dreams become a nightmare, with nobody else to blame. I know one personally who've bought a number of Investment properties 'off plan' and think they're just fine! No one knows the future, but if your're paying half the rent a mortgage would cost on a property, you don't need to look in my crystal ball!

Have a good weekend all, it's time for me to open my first bottle. Yes - I know it's only thursday, but it's the start of the weekend for me :rotfl:

Tassotti

Just saying thanks for the alcohol reference.

A correction will sort out the professsionals from the amateurs..

Always good in my books...

Scenario...prices rise...keep buying

Prices drop - more repos- keep buying

Always money to be made if you know what you're doing?

mystic_trev

Tassotti wrote: »

Always money to be made if you know what you're doing?

Yes Tassotti but you're an Investor who knows what he's doing (London I believe) and have done very well. Many here are pure speculators!

PS Are you still buying, or 'extending' your properties?

Half way through first bottle!

WTF?_2

IveSeenTheLight wrote: »

I know this is specifically about the rental market in Scotland, this is where I have a vested interest, however I'm sure the philosophy will be the same across other areas in the UK.

http://business.scotsman.com/personal-finance/Landlords-enjoy-windfall-from-global.3761390.jp

Hopefully this will help to explode the myth that BTL's (of which most are based on the mortgage to rent ratio) being forced to sell up.

If the rent isn't covering the mortgage outgoings then there's little sense in BTL - relying on capital appreciation in the property isn't a viable long term BTL strategy.

I expect that rental yields should improve but that won't be a lot of use for idiots who bought into BTL in the last few years without doing their sums first. They have huge mortgages to pay off and rent isn't likely to increase by anything like enough to help them meet their payments. Unless they anticipate being able to subsidise their tenants over the coming years they can either sell up now or wait until they get repossessed.

People who bought before the market lost its collective marbles though should be in a position to profit.

This is exactly the reason why many of us are complaining about the absurdity of what has happened to the house market and calling for prices to drop. Stupidly high prices benefit very few people in the end - certainly not anyone buying into the market.

WTF?_2

MissMoneypenny wrote: »

My friends young daughter can't pay her mortgage if the tenant doesn't pay. She has had a couple of scares where the tenant (who runs his own business) has been late. So far, she has just had the rent in time to avoid a missed mortgage payment.

Yes - complete madness. What would she do if the house needed an expensive emergency repair (boiler fixed, roofing repairs etc)?

If the margin of paying/defaulting on the mortgage is so narrow she has no business becoming a landlord.

SquatNow

Do any of you people have the slightest clue what "Margins calls" are?

Do you know the difference between a BTL mortgage and a residential mortgage?

Gorgeous_George

SquatNow wrote: »

Do any of you people have the slightest clue what "Margins calls" are?

Do you know the difference between a BTL mortgage and a residential mortgage?

Do squatters have any idea what a baseball bat is?

Do you know the difference between earning a living and sponging off others?

GG