There will not be a crash

PayDay

The_Dangerman wrote: »

I've already answered that.... 23

First house bought at 20..... all houses with significant equity and ALL turning a profit from the interest.

So I'm not even concerened if they did go down in value(although I don't think there will be any significant changes this year, up or down) , because I have no intention to sell, but the profit will creep up year on year when I put the rents up.

If you had voids on your houses for 2 months could you pay the mortgage payments?

Pez2

The_Dangerman wrote: »

First house bought at 20..... all houses with significant equity and ALL turning a profit from the interest.

If it's not being too nosey, how much qualifies as 'significant' here? And where did this equity come from? Having you been ploughing your own money into this as deposits, or have you been buying well below market value? Just curious about your business model.

chrisandanne

The_Dangerman wrote: »

I've already answered that.... 23

First house bought at 20..... all houses with significant equity and ALL turning a profit from the interest.

So I'm not even concerened if they did go down in value(although I don't think there will be any significant changes this year, up or down) , because I have no intention to sell, but the profit will creep up year on year when I put the rents up.

If you look at my posts, I didn't start bragging about money - I started by stating my believe that prices will stagnate this year. Then I got abuse stating that I was "stupid, insane, and idiot". It really doesn't bother me, but I thought I would point out that so far it seems I have done something right.

My point was Dangerman, that you cannot charge people what they cannot afford to pay...you can't keep putting up rents if people are financially distressed and can't pay them, i.e. Chlamydia becomes ill and cannot work, Britnee now has to find all the rent which was originally shared by the departed Alphonse and the ill Chlamydia, she can only afford £350 per month because she is on a basic wage, what, as a landlord will you do ? will you take the £350 and the rest in kind ?, Will you let her rack up a couple of thousand in unpaid rent and evict her ? Will you lower your rents ?.
You could buy some really cheap houses in very bad condition and rent them out at a very low rent, and call yourself Rackman Housing Ltd, or you could corner the market in large cardboard boxes because there may be a future demand and you could rent them out.... of course the rents on these would vary according to location.
And as for sharing, I thought, if loads of homeless people got together and pooled their bit of money together they could rent a really nice place.
I am pleased you have done well and I hope the future is as kind to you as the past few years but you seem to be a little detached from the real world, sometimes you win and sometimes you lose, that's life, be prepared for anything.

chrisandanne

Addy1 wrote: »

Thanks very much. I actually find that pretty offensive as you have no idea of my abilities and nothing I have said on here indicates that I cannot do my job.

I am just a normal person trying to buy a home and I am trying to work out what is going on with the housing market at the moment.

I have no financial knowledge but am doing my research so I do not become one of those people buying a 1 bed new build with 100% mortgage at 10 times salary.

I was not trying to argue with people just trying to understand.

It's not all about you Addy, relax

The_Dangerman

PayDay wrote: »

If you had voids on your houses for 2 months could you pay the mortgage payments?

Yes I have budgetted for around 6 months, but that is an extreme case. Obvously that contingency fund is used for any repairs, finders fees etc. But it's in a high interest savings account so can and does vary in amount. The more properties owned though and the more unlikely it was they were all emply at once, but I never say never!

If anyone else is thinking of doing it I would recommend a minumum of 3 months contingency fund.

The_Dangerman

GavP wrote: »

If it's not being too nosey, how much qualifies as 'significant' here? And where did this equity come from? Having you been ploughing your own money into this as deposits, or have you been buying well below market value? Just curious about your business model.

A bit of both. Mimumum deposit is 15%, and that may now be rising to 20% as it is diffiucult (but not impossible) to get a 85% BTL mortgage.

However all my offers are "competitive" because I want to ensure it turns a profit. I don't need the house, so if the seller wants to hold on that's fine by me.

As for what significant is.... well it would take a crash of 40-50% to take me into serious negative equity. Even that doesn't really concern me because I bought with a view to keeping them not to make a quick buck. Therefore long term rental income is what I am after. Anywhere with a bouyant rental market is good for me.

The_Dangerman

chrisandanne wrote: »

My point was Dangerman, that you cannot charge people what they cannot afford to pay...you can't keep putting up rents if people are financially distressed and can't pay them, i.e. Chlamydia becomes ill and cannot work, Britnee now has to find all the rent which was originally shared by the departed Alphonse and the ill Chlamydia, she can only afford £350 per month because she is on a basic wage, what, as a landlord will you do ? will you take the £350 and the rest in kind ?, Will you let her rack up a couple of thousand in unpaid rent and evict her ? Will you lower your rents ?.
You could buy some really cheap houses in very bad condition and rent them out at a very low rent, and call yourself Rackman Housing Ltd, or you could corner the market in large cardboard boxes because there may be a future demand and you could rent them out.... of course the rents on these would vary according to location.
And as for sharing, I thought, if loads of homeless people got together and pooled their bit of money together they could rent a really nice place.
I am pleased you have done well and I hope the future is as kind to you as the past few years but you seem to be a little detached from the real world, sometimes you win and sometimes you lose, that's life, be prepared for anything.

I did say that my last increase was only 3% and I hadn't increased it for 18 months, so thats a very low increase. However life is not a charity, renters have to expect their rent to go up every now and again. They should be thankful I'm not increasing it in line with inflation! I accept people are facing a squeeze and thats why if I have a good tenant who keeps my house in good order and doesn't overly complain then I am happy not to raise them every 12 months by inflation.

After all, it is in my interest to keep them happy - they are looking after my investment. As for the scenario you mention, I will always give a bit of leeway to a good tenant who has previously paid the rent on time without hassle. But I am not a charity, and the mortgage company wouldn't let me get away with it so I can't just give freebies away.

I really am not this monster I have been made out to me. I do look after tenants. When I say "don't overly complain" I am(well via my agent) happy to rectify any faults ASAP but I you do get odd ones who seem to take great delight in complaining over everything.

I believe I am prepared for ups and downs and not some overnight con-artist. But I have taken calculated risks and am entitled to some reward, because nobody would be bailing my out if they went wrong! But nor would I expect them to.

PayDay

The_Dangerman wrote: »

Yes I have budgetted for around 6 months, but that is an extreme case. Obvously that contingency fund is used for any repairs, finders fees etc. But it's in a high interest savings account so can and does vary in amount. The more properties owned though and the more unlikely it was they were all emply at once, but I never say never!

If anyone else is thinking of doing it I would recommend a minumum of 3 months contingency fund.

If a tenant doesn't pay you, a LL will need more than 3 months worth of rent in a contingency fund. A missed mortgage payment will cost you dear when you try to remortgage.

On the subject of mortgages, if houses prices fall, how will you get another BTL mortgage on a good rate? Or will you just have to go onto SVR?

You have come into this BTL at a very late stage in the game.

Pez2

The_Dangerman wrote: »

A bit of both. Mimumum deposit is 15%, and that may now be rising to 20% as it is diffiucult (but not impossible) to get a 85% BTL mortgage.

However all my offers are "competitive" because I want to ensure it turns a profit. I don't need the house, so if the seller wants to hold on that's fine by me.

As for what significant is.... well it would take a crash of 40-50% to take me into serious negative equity. Even that doesn't really concern me because I bought with a view to keeping them not to make a quick buck. Therefore long term rental income is what I am after. Anywhere with a bouyant rental market is good for me.

Okay, a bit more nosiness: what are your typical rental yields like?

Also, which part of the country do you buy in?

brit1234

Don't buy in the North or the Midlands, rents are falling due to oversupply.:D