'BTL Landlords go long'

LillyJ

http://www.rightmove.co.uk/viewdetails-10367400.rsp?pa_n=1&tr_t=buy
Now I know nothing about BTL, but this came on RM today and the figures seem to stack up, if you get the rent they suggest that is. I reckon that rent is about right judging by the area.

Definately not planning to go into BTL but was just wondering what others thought, especially if you could get a deal on the price.

dannyboycey

LillyJ wrote: »

http://www.rightmove.co.uk/viewdetails-10367400.rsp?pa_n=1&tr_t=buy
Now I know nothing about BTL, but this came on RM today and the figures seem to stack up, if you get the rent they suggest that is. I reckon that rent is about right judging by the area.

Definately not planning to go into BTL but was just wondering what others thought, especially if you could get a deal on the price.

Had a play with the BBC mortgage calculator and I can't make this one work (rent would need to be upped quite a bit and it doesn't look like the kind of area in which people would pay much above going rate). But then if it did, I don't think they'd be selling.

BobProperty

LillyJ wrote: »

http://www.rightmove.co.uk/viewdetails-10367400.rsp?pa_n=1&tr_t=buy
Now I know nothing about BTL, but this came on RM today and the figures seem to stack up, if you get the rent they suggest that is. I reckon that rent is about right judging by the area.

Definately not planning to go into BTL but was just wondering what others thought, especially if you could get a deal on the price.

My rule of thumb says it's worth £34000.
Why is a gross yield of about 7% OK? I really wish someone would explain that to me. Most small businesses would want to make 20-25% return (alright that is on T/O not capital employed). You can get 6% putting the money in a bank.

LillyJ

Thanks, I think I must be doing something wrong, because I put in a £60k mortgage, over 25yrs at 6% and got £300 interest only or £391 repayment?

Just wondered really. No it isn't a great area either!

LillyJ

BobProperty wrote: »

My rule of thumb says it's worth £34000.
Why is a gross yield of about 7% OK? I really wish someone would explain that to me. Most small businesses would want to make 20-25% return (alright that is on T/O not capital employed). You can get 6% putting the money in a bank.

I don't know, I know nothing about BTL that's why I was asking. Like I said it isn't something I would do.

LillyJ

It does show, however that there are still places where rents are higher than mortgages. Not that I would want to live in Woodgate but a lot of people do!

boinging_2

LillyJ wrote: »

Thanks, I think I must be doing something wrong, because I put in a £60k mortgage, over 25yrs at 6% and got £300 interest only or £391 repayment?

Just wondered really. No it isn't a great area either!

Don't forget you get taxed on earnings, you have to look at periods of none rent and also up keep costs (all out of the tiny margins vs mortgage payments). The area is shocking BTW.

LillyJ

boinging wrote: »

Don't forget you get taxed on earnings, you have to look at periods of none rent and also up keep costs (all out of the tiny margins vs mortgage payments). The area is shocking BTW.

OK thanks.

I know the area very well and know how shocking it is! I have a lot of friends who live there and they rent for similar prices to that, that is why I asked. It is only a couple of miles from here (areas change pretty quick in a big city like this)

dopester

LillyJ wrote: »

It does show, however that there are still places where rents are higher than mortgages. Not that I would want to live in Woodgate but a lot of people do!

Hmmm. Factored in periods when the place is without a tenant? Considered capital loss if/when the house price crash really gets under way.

To be honest... it's a minging flat and a minging area. I'd rather burn £60K than live in that place.

Also given any consideration whatsoever to how tenants might pay come an avalanche of redundancies?

LillyJ

dopester wrote: »

Hmmm. Factored in periods when the place is without a tenant? Considered capital loss if/when the house price crash really gets under way.

To be honest... it's a minging flat and a minging area. I'd rather burn £60K than live in that place.

Also given any consideration whatsoever to how tenants might pay come an avalanche of redundancies?

Yep point taken, that is why I asked the question. And I know the area very well indeed, quite a few of my friends live there, and yes it is minging.