Thursday, Mar 08, 2007
BTL is a great idea!
Daily Telegraph: Buy Two, Let One
Snapping up two neighbouring properties then renting one out can be a very smart move, explains Sue Corbett.
Although rental income may not be the best part of the buy-to-let deal at present, it is encouraging to think of the likely growth in capital value, and the useful claim you could be staking in the property market for the benefit of your children in a few years' time.
Posted by little professor @ 10:27 PM (157 views) Add Comment
15 Comments
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1. Timbuk3 said...
Great idea. then the BTL portion (plus maintenance) will cost you more than the rent received, but thats alright because the 'likely' capital appreciation will be your saviour . I'd like to know how these journo's reach their conclusions, do they just bowl back from the pub, pluck some figures out of the ether and file their copy. Houses should come with warnings like shares - ' price of houses can rise & fall - you may not recieve back more than you invested.
2. enuii said...
VI alert, I think this dizzy womans bestest mate is a London estate agent!
3. Jim Tallis said...
Yeah, great idea if you've got £1 million spare cash!
4. daft boy said...
Is this really how the other half live ? How much do plumbers earn these days ? I must be out of touch with reality
5. Geed said...
"and you are property-hunting with a bit of money to spare"
Since when is a million or two referred to as a bit of money?????? I truly am a pauper.
6. Nasha said...
Look at the link at the bottom of the page, all this is an advert for the telegraph property section. Articles like this should be marked with (This is a advertisment)
7. maddison said...
Has anyone considered that people buying to let are not in it just for the money.....? A new feudal system is developing. Some people like the feeling of being in power owning someone else's home....
8. monty said...
Yeah, but just think how cool it would be to vet your own neighbours. Don't like their 3a.m. hip-hop sessions? No problem - give 'em notice.
I'm now in my second home with the landlord living next door and I'm very well behaved. :-)
9. Davros said...
If you want to know how ludicrous it's become, my neighbours house identical to mine has come on the market at 450K. My rent is 1000 a month.
It doesn't even vaguely add up.
10. Davros said...
> And, although rental income may not be the best part of the buy-to-let deal at present, it is encouraging to think of the likely growth in capital value, and the useful claim you could be staking in the property market for the benefit of your children in a few years' time.
Thanks Dad. You took your financial advice from an article in the paper and blew our inheritance on a house you bought at the top of the market..
11. george monsoon said...
I think BTL is great if its your pension. Lets face it, you stand to get a better return on sale, than your pension would give you. Otherwise I think all BTL's who are in it for the money should be stripped of all their financial assets and told to go and "buy a house now you tosser!"
See how well they fair in my world and then explain to them that BTL' GREED is making a first time buysers life Hell on earth.
12. Chilli said...
Maddison - what I see happening, is a whole lot of cheap credit, inspiring everyone to compete to buy their dream home/investment, which is driving the global house market up. When, one day, interest rates go up, these people will be spending a long long time paying it all off. And the banks, and repo predators will cash in when these people start to default.
Cheap and easy credit is ruining the middle class. The lower classes generally find ways to survive 'off-book' really, and the government offers them support in the name of 'social justice'. The middle class, then is left to pay the bill, and increasingly has to pay it on credit. The super rich, of course, will always have the means to guarantee that they pay no tax.
I don't think that when the music stops, it will be the home owners who will become the new landlords. When the music stops, everyone will realise we are living in a dump and suddenly there will be the policitical will to ensure that there is much more investment in property and infrastructure. This will cause london to expand and the supply of houses to increase, and then houses will drop in price. There are other things that effect supply such as the property developers hoarding available sites that have been earmarked for development in london. (Just look at the difference in actual homes built vs those given planning permission in london) Eventually, their game will end. They will get very rich in the meantime however.
Also, considering that the middle class always pay the major portion of tax, wiping them out doesn't bode very well for the country's future. We are reaching the limit to how much the government can tax. If they tax more than currently, they will actually get less tax revenue as people decide its just not worth working. (Happened in the 80s) They are also the people who have some money and an interest in not maintaining the status quo. So any really new innovation or entrepeneural spirit comes from the middle class.
13. Davros said...
>I think BTL is great if its your pension.
See I don't get this. Could someone correct me if I'm wrong, but assuming you bought today with record house price to earnings ratio/house price to rents etc. Should you come to sell at retirement and we're at a time when we've still got record measures of affordability, then all that has happened is that houseprices have risen in line with earnings in the preceding years. Otherwise, your investment hasn't kept up with earnings.
Doesn't this mean, that at best, your 'pension' has averaged 3% a year for 25 year and at worst, lost you money?
14. Chilli said...
Davros - I don't know where you are getting your numbers from but:
My thinking is its all about supply and demand. We are either short on homes, in which case there are loads of people crowded into existing accommodation. In other words a dump.
Or the politicians (spelt correctly this time) do their jobs right and build houses, and accommodate us all (and other things like controlled immigration) and coincidentaly lower house prices by increasing supply.
So its a simple choice really in the long view. Are you really going to depend on houses to keep on going in 25 to 40 years it will take for retirement. What will the UK be like in that case. Do I really want to retire here then? Granted I could sell at that point and move, but everyone else is going to be asking the same question. At some point, things will ease, immigrants will drop off, native britons will leave for greener pastures, whatever... Houses will stop going up in relation to earnings. and very likely come down. Its almost inevitable.
15. Davros said...
It is inevitable. There's a finite supply of money, hence a limit on price rises. If people are expecting 10% a year for the next 25 years, that means in 25 years time the average house will be over 2 million quid. If wages rise at 3% a year, house prices will be 32 times average salaries. Even 10% over the next 5 years, will result in houseprices 10 times average wages. It's just doesn't add up.