'BTL Landlords go long'

Gorgeous_George

I don't do remortgages. My residential and BTL mortgages are small LTVs and life of mortgage deals.

Any surplus from the BTL is used as income. Surplus income is used to reduce my residential mortgage (well, added to my offset account just in case I need it later ).

When I can buy another property that will bring in surplus income commensurate with the risk, I'll buy. I look for 10%+ yields on proper family homes. A drop of 25% in my target area will result in 10%+.

GG

Gorgeous_George

dolcevita wrote: »

That's the proper way to do it for us amateurs and has served me well over 20 years.

I've started to reduce my exposure to property now but over the years, as I was buying, selling, renting, whatever I never ever borrowed from one house to pay for another.

Each house has been self-financing with any extra income paying down the mortgages on that house, and I have now ended up with 4 houses mortgage free.

Given the choice between owning 4 houses "worth" 400k mortgage free and earning a decent income or 100 houses mortgaged at 85% and worrying about whether interest rate are going to drop by 0.5% I know which I would choose.

You may be missing out on valuable tax allowances.

GG

WTF?_2

EdInvestor wrote: »

!!!!!!



IMHO you are seriously out of touch with the realities of the letting business. Landlords are interested in yields.So they will start buying in when prices drop to give what they regard as a profitable yield.( They will have their own view on the likely outcome for capital values long term - the current arrangment is just a blip of course.) The desired fall may be quite small in some areas, certainly some landlords are already reportedly buying in.

They will not wait for any "bottoming out" - they don't have crystal balls - but rather they will create one by moving in at the relevant yield level. Because they will be ahead of FTBs in the queue on risk grounds, they will get any available funding first.Most professional landlords are not highly leveraged.

It's quite possible IMHO that the private rented sector will expand quite a lot over the next couple of years.

You lot need to be careful what you wish for.

Yes - a small number of professional BTL landlords with enough prudence and foresight to have cash in hand are going to underpin prices of the housing market and catch that falling knife. Uh-huh.

Cash-flush landlords may well jump in if they see the right property returning a good yield but it's not going to put a floor under the market. Houses keep on selling in falling markets - a sale doesn't mark the bottom.

By the time this is over there are going to be a good few less BTL properties out there.

BTLNEWbie_3

!!!!!!? wrote: »

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

They will be excellant for cash rich BTL's, I for one will jump in whenever I see the return will be greater than the mortgage.

BTLNEWbie_3

Benefits_Blagger wrote: »

the problem is that most of the main predictions are that we are going to have falls of upto 10% at worse. Any buy to letter sitting down and working through the transaction costs will realise it's not worth selling up yet. however when predicted falls of 30%+ become accepted as mainstream a lot more will be rushing to sell up.

What you mean is when falls of 30%+ happen we will be snapping up loads of bargains:T

pickles110564

!!!!!!? wrote: »

By the time this is over there are going to be a good few less BTL properties out there.

I am not so sure, I for one will be buying several more bottom end houses if your predicted falls of 30%+ happen.
My EA contact says several BTL's have been putting in orders if the crash does hit 20% below current prices.

WTF?_2

BTLNEWbie wrote: »

They will be excellant for cash rich BTL's, I for one will jump in whenever I see the return will be greater than the mortgage.

Good for you. I'm a cash rich buyer looking to get myself a home and I'll be pretty happy too.

As long as yields stay favourable I'll be looking to get a BTL sometime afterward.

silvercar

For months people have been saying that the recent drop in the CGT rate t 18% would lead to a glut of BTLs on the market. It didn't happen.

One reason I think there are not more BTLs on the market is that the people thinking of selling are doing so because money is tight. To seriously sell a BTL you need to get the tenant out, which leaves the problem of an empty property, no rental income and the mortgage to pay. Manageable if you are confident your property will sell in 2-3 months, too risky if you could take 4-6 months to sell. For people with good tenants it is easier to put off the decision until such a time as the property is empty.

m00m00

the reason the 18% rate didn't bring many sellers out, is you actually need to have made a gain to pay capital gains. Not likely for most people who bought off plan/investment city centre flats at any point in the last 2-3 years in most areas.

Undersized_Rascal

IveSeenTheLight wrote: »

I think you think (wrongly) that the majority of BTL landlords are on the very edge of affording the property and subsidise the monthly mortgage payments

I rent out two properties, one has an LTV (paper valuation) of 39% and the other 58%.
Both have tenants which cover the mortgages and the associated costs and the extra is utilised to reducing the mortgage even further.

You may think that I bought these properties a long time ago, but I bought one 4 years ago and the other 16 months ago.
I have significantly reduced the mortgage since buying them.

Do you think I am at risk, I think not.
I have a long term strategy which I am very confident will proove correct and I suspect many BTL landlords are in the same position.

sure there will be some that have miss calculated, invested for the wrong reasons. I just don't buy into that this is the majority.

I hope that in the unfortunate event that property prices drop 30%+ all the greedy ones who screw tenants for deposits/don't fix stuff/ lie go out and never come back AND THAT ALL THE NICE ONES STAY AND CONTINUE TO TREAT TENANTS FAIRLY ......yes I know tenants can be bad too