It's a funny old world - BTL's are prospering!

Gorgeous_George

Lotus-eater wrote: »

But they are all investments, all the bad things that come with having a BTL need to be taken into consideration when you are thinking about investing your money.

I agree completely. My point is that you cannot compare a BTL yield with that of a shareholding (without taking account of selling/buying. costs).

GG

Zammo

Gorgeous_George wrote: »

My 4 bedroom BTL house makes more than £25 per month:rotfl:.

I said an extra £25, try reading my posts properly next time.

Gorgeous_George wrote: »

If it loses £1K per month, it will worth £20K in 5 years and my yield will be huge. Maybe I'll buy another when prices crash.

Not quite sure what you're getting at there, can you rewrite it in English?

Those who became landlords over the last couple of years are getting royally fooked right now. Did you buy in the last couple of years?

Gorgeous_George

No, I bought in 2001. A dump of a house for £15.5K just before it went to auction after being marketed for 6 months at £20K. Rent now is £5K. Not a bad return for my hard work, foresight and the risk that I took. If it fell down tomorrow I would not be out of pocket.

I agree about the more recent [strike]flat[/strike] apartment BTL LLs.

Apologies for the trypo. If you could not underrstand what I was saying, it is you that needs lessons in comprehension.

I'll pass on the £25 reference. You lost me.

GG

Vincenzo

Gorgeous_George wrote: »

I think it's like comapring apples with oranges. As previously stated, selling a house incurs significant costs and CGT. Buying another one when the market sentiment improves incurs costs again.

Dumping a few shares or ISAs costs next to nothing by comparison.

So, selling my BTL and buying another at a later date could incur the following costs:

£600 Solicitor to sell
£1,500 EA
£200 mortgage redemption fees
£500 Survey on new property
£1,000 mortgage arrangement fee?
£600 Solicitor to buy
£1,500 for three months' void when selling
£500 for a void when buying

There'll be more but that's enough for now (£6,400). Then there's the stress.

GG

This is why investors typically use a Net Initial Yield (NIY). This takes into account purchasers costs. As a rough guide costs for a property purchase (over £500k) would be in the region of 5.75%. So to work out the NIY you would add these costs to the pruchase price and then work out the yield as before.

Granted there are other running costs associated with residential BTL but if we started to look at Return (income and capital gain), rather than just Yields, property wins hands down over any other form of investment over the last 10+ years. Add gearing into the equation and it is easy to see why so many have bought (and continue to) into the market.

subjecttocontract

I'm a landlord....have been for almost 10 years. I've bought quite a few properties over that time, most of them I still have. I've also bought a few in the last couple of years and have done resonably well with them.

Example 1. This time last year I bought a 1 bed flat in excellent condition for £103K. Its current market vaue is £120-125K. I have an 80K mortgage on it @ 5.84% = £4672. The rental income is £6300. After just 1 year its proved an attractive investment......so far.

Example 2. I'm in the process of buying a 1 bed flat for £96K that will let for £525pcm.....again looks like a good investment.

There are still opportunities out there.