There will not be a crash

The_Dangerman

dolcevita wrote: »

That explains your optimism.

good luck to you but remember, making money during a boom is easy - any idiot can do it - hanging on to it when the !!!!!! hits the fan is the hard part.

Oh indeed. But isn't life wonderful when you look on things with optimsm? Have you ever been friends, partners, or even colleagues with someone who is just always positive? They make you feel good right? Ever been friends, partners or colleagues with someone who is always negative? Always sees the worst in everything? Everything is going to go wrong? Makes you depressed doesn't it?

I used to be the latter, but having developed a good friendship with a person of the former who is a also a millionaire along with all his family, that optimism and enthusiasm for the future rubs off until you think "you know what, the worst might not actually happen"

The_Dangerman

Gorgeous_George wrote: »

How BTL works.

1. Buy property with a 6% yield in year 1

2. In year 2, increase rent by 2.5%

3. By year 10, the yield (against initial cost) is 7.6% and rising

Its a l....o....n....g term investment. There will be voids and occasional scumbag tenants but, in the long term, it can and does work.

There will be better times to buy. I don't think there'll be worse times than right now. But it can still work.

GG

Thanks GG, that is my plan. I'm sure there will be hiccups along the way I don't suppose I will get everything right first time. But I am learning and feel I have put myself on a good footing and am nowhere near as exposed as some in the BTL game.

Pez2

The_Dangerman wrote: »

Erm, by "leveraging" my intial deposit I assume you mean borrowing it? If so then that's not how I am funding my deposit so not sure where that came from.

No, leveraging means increasing the size of your investment by borrowing. So, for instance, by borrowing £80,000 to add to a deposit of £20,000 then you end up with an asset worth £100,000. The idea is that, just as a lever amplifies a small force into a larger one, so 'leveraging' your investment amplifies your return. Of course, it can also have the effect of amplifying your losses.:eek:

Having said that, I'm not knocking your investment, I'm just trying to get a handle on how much new BTL investors are actually making. And I agree that it's good to be optimistic, which is why I'm looking forward to property being a lot cheaper when I'll be looking to buy in a few years time.;)

smigger1979

The_Dangerman wrote: »

What you have forgotton is that Alfonsee and Britnee still need a place to live. If they can't save up enough deposit or borrow enough money they will rent. If both of them want to rent because they can't afford to buy there is a demand for rental properties which some BLTer will come along to fill. My letting agent will allow a bigger earnings to expenditure than a mortgage.

If Alfonse and Britnee can't afford the rent maybe they will co-habit. This could possibly result in mini Alfonses and Britnees and everyone is happy.

Why do they still need a place to live? They must be already living somewhere

Laughing_Man_2

Unsurprisingly, when questioned the property maestro turns out to doing very well which obviously supports his views on the market he claims to trade. We should be grateful that he has seen fit to devote so much of his valuable time and insight to defending his many successes to complete strangers on the internet, whose opinions can have no possible impact on the glamorous lifestyle of a BTL prodigy.

Seriously, why do you all think he started this thread? For informed discussion maybe?

Frankly, I'm detecting an air of depseration: this young man clearly has alot riding on continued HPI and can sense the tide is turning and just wants things to be like they were six months ago, when stating 'prices can only go up' was obviously true and even showed some level of investment 'savvy' (God knows why everyone was saying it). Defending this thread is simply an attempt to get everyone back 'on message' and have things work out the way he wants (or more likely, needs) them to.

O.K Dangerman, now you can repeat how awesomely things are going for you, state how little my opinion means and use a bunch of smug smileys.

The_Dangerman

Laughing_Man wrote: »

Unsurprisingly, when questioned the property maestro turns out to doing very well which obviously supports his views on the market he claims to trade. We should be grateful that he has seen fit to devote so much of his valuable time and insight to defending his many successes to complete strangers on the internet, whose opinions can have no possible impact on the glamorous lifestyle of a BTL prodigy.

Seriously, why do you all think he started this thread? For informed discussion maybe?

Frankly, I'm detecting an air of depseration: this young man clearly has alot riding on continued HPI and can sense the tide is turning and just wants things to be like they were six months ago, when stating 'prices can only go up' was obviously true and even showed some level of investment 'savvy' (God knows why everyone was saying it). Defending this thread is simply an attempt to get everyone back 'on message' and have things work out the way he wants (or more likely, needs) them to.

O.K Dangerman, now you can repeat how awesomely things are going for you, state how little my opinion means and use a bunch of smug smileys.

If you have read my posts you will know that I am not riding on continued HPI, because I'm not planning to sell anytime soon. My plan is based more around rental income, so I think that was wide of the mark.

But you are welcome to your opinion. Yes you're right, I am doing quite well at the moment. Long may it continue! Here's another smug smiley...

The_Dangerman

smigger1979 wrote: »

Why do they still need a place to live? They must be already living somewhere

There are many reasons why people need a place to live. New area, new job, new country, new baby, new partner, new divorce, new split, etc etc

Of course it's a fine line between moving as being "highly desirable" and "essential". If you were lodging with a mate, and that mate then decided he wanted his girlfriend to move in as the two of them, he probably wouldn't kick you out onto the street. But I'm sure you would desire a move sooner rather than later.

The_Dangerman

GavP wrote: »

No, leveraging means increasing the size of your investment by borrowing. So, for instance, by borrowing £80,000 to add to a deposit of £20,000 then you end up with an asset worth £100,000. The idea is that, just as a lever amplifies a small force into a larger one, so 'leveraging' your investment amplifies your return. Of course, it can also have the effect of amplifying your losses.:eek:

Having said that, I'm not knocking your investment, I'm just trying to get a handle on how much new BTL investors are actually making. And I agree that it's good to be optimistic, which is why I'm looking forward to property being a lot cheaper when I'll be looking to buy in a few years time.;)

Good stuff! I hope it works out for you! You don't need me to tell you to do your homework as much as possible. I've gone for property that is easy to rent, with strong demand. Speaking to a letting agent is always a very smart move.

Pez2

The_Dangerman wrote: »

Good stuff! I hope it works out for you! You don't need me to tell you to do your homework as much as possible. I've gone for property that is easy to rent, with strong demand. Speaking to a letting agent is always a very smart move.

Actually, I'm just talking about becoming a FTB. I'm not fussed about property investment.

moft100

Hi All, First time post..... just wanted to add that I am in the process of buying a house atm. Yes, prices are higher then I would like and there is a risk that prices may depreciate or stagnate until wages catch up but thats the way it is.

There are mortgages and credit still out there. Lending criteria may have tightened, but its not hugely difficult to find the right mortgage even with 5% deposits.