'BTL Landlords go long'

going2die_rich

Benefits_Blagger wrote: »

rent wont rise for the simple reason that as prices fall, the new LL's of these properties will able able to charge the same rents as existing LL's but acheive a greater yield, thus keeping a lid on rents.

Thats assuming the houses being sold are rentable properties. Not every property is appropriate for renting. Any fall in prices will scare many from buying buy to lets if they hear a friend of a friend stories, only the savvy buy to let buyers will see this a business opportunity and buy the property up cheaply. But many of these savvy people are likely to be people who already own plenty of buy to let property to start with, so why reduce your income when you can push it up to match your other properties. You would presume they will see their buy to let portfolio as a whole, whereby if one property is taking a hitting, you make up the costs else where. So wouldn't this lead to higher rental prices overall?

Vincenzo

!!!!!!? wrote: »

Sensible BTL is about cashflow and yield (vs putting your equity somewhere else).

If your BTL generates cash for you then thumbs up. If it costs you cash every month then what the hell are you thinking?

Basically, people have been ignoring the above simple equation and continuing to buy in the last few years because they perceive that capital gains on their BTL property will compensate for the fact that it is a cash sucking financial leech :rotfl: These people are about to find out how misguided they are.

I agree that this has been the case but dispute the fact that you could not buy property as an investment in the 'last few years' and still achieve a good initial yield. BTL is a business and those that failed to realise this and bought on conjecture and good feeling deserve no sympathy.

pickles110564

Benefits_Blagger wrote: »

If BTL'ers are such great business people, which they have been telling us, then they need to get out now.

or simply to sum it up, why would anyone choose to lose money ?

BB you live in such a dream world, we bought our BTL,s for a minium of 25 years.
How do you know what will happen in that length of time, if you did you would be very rich, but you dont know what will happen over the next six months.
No one is going to listen to what you say as you cant even hold down a job, let alone predict how the market will be in 20+ years time.

pickles110564

Benefits_Blagger wrote: »

rent wont rise for the simple reason that as prices fall, the new LL's of these properties will able able to charge the same rents as existing LL's but acheive a greater yield, thus keeping a lid on rents.

Rubbish as you say if BTL LL's are proffessional they will charge what they can not leaving it at a low price

WTF?_2

pickles110564 wrote: »

Rubbish as you say if BTL LL's are proffessional they will charge what they can not leaving it at a low price

The thing is that many LLs who bought at the silly prices of recent times and gambled on capital appreciation will end up having to sell or being repossessed and the property sold off at much lower prices in the future.

Anyone in a position to buy once prices have dropped back to sustainable levels can make the BTL work financially in a way that the previous landlord (with his massive mortgage) could not...... Quite simple.

Once the market has dropped to a level where a BTL can generate positive cashflow for me (taking into account voids and the various costs), I'll certainly consider getting into the game. However, currently there is next to nothing out there in my area that it makes sense to buy for BTL and there hasn't been for a couple of years at least.

EdInvestor

Professional buy-to-let investors would look to exploit a housing market downturn by snapping up cheap properties, according to 44% of the 3,179 intermediaries questioned by the Mortgage Works.

http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content.aspx?ID=301659

Interesting to see what level of price fall will deliver value to these buyers - this will potentially put a floor under that part of the market.You can easily see that the next few years could see quite an expansion of professional BTL ( as opposed to flippers,property club buyers and other speculators) portfolios, accompanied by rising rents and higher yields. Might not be good news for FTBs as the pro landlord is obviously a better risk for the banks.

LillyJ

I think BTLers are laughing their heads off just waiting for cheaper houses with massive rents! That can only be a bad thing for Joe Public trying to get on the ladder.

WTF?_2

LillyJ wrote: »

I think BTLers are laughing their heads off just waiting for cheaper houses with massive rents! That can only be a bad thing for Joe Public trying to get on the ladder.

Yes, cheaper houses 'can only be a bad thing for Joe Public trying to get on the ladder'. :rolleyes:

LillyJ

No, cheaper houses is a bad thing if you can't get credit and are trying to compete with BTL who are snapping them up quicker than anything! The banks are going to lend easily to someone like that who will make massive profits. It is BTLs that got us in this mess in the first place so why on earth you think it is a good thing that they will be buying up all the cheap places that you waited so long for to drop is beyond me.

WTF?_2

LillyJ wrote: »

No, cheaper houses is a bad thing if you can't get credit and are trying to compete with BTL who are snapping them up quicker than anything! The banks are going to lend easily to someone like that who will make massive profits. It is BTLs that got us in this mess in the first place so why on earth you think it is a good thing that they will be buying up all the cheap places that you waited so long for to drop is beyond me.

Where do you think the BTL landlord is getting his credit?

Or do you imagine that they are well capitalised with ready amounts of cash to cover the outright purchase of the large numbers of properties going onto the market?