Monday, Feb 11, 2008
"Make" £1.04 out of tenented DSS in Liverpool.
thepropertygrower.com: Buy to Let
Speechless on this one folks.
Posted by doomwatch @ 12:11 PM (1235 views) Add Comment
19 Comments
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1. theboltonfury said...
wonderful, an opportunity to make a loss, it's even guaranteed!
why the 20k difference between market price and investor price? Surely they are both the same?
2. hpwatcher said...
Just shows how messed up housing in this country is.
3. denzil said...
Hilarious. So, before I even consider maintainence to my BTL I am making a loss of £1.04 a month. Brilliant, where do I sign?
4. confused76 said...
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5. Confused_dave said...
so for £12.48 a year (plus maintenance costs) I can own that house in 25 years? Is that bad?
6. Ndharris said...
Come on people, surely you can see that BTL is a great opportunity even if the rent doesn't match the mortgage? In the case you refer to the tenant pays £400 of your £401.04 monthly mortgage. If the mortgage is over 25 years then the landlord pays £1.04 x 12 months x 25 years = £312. So...over 25 years the the landlord pays just £312 to own a property worth £70,000. Then they sell the property for £70,000 (or even £35,000 if property's value halves) and make a huge profit.
I am all for house prices crashing, I think it's about time, but BTL is the easiest way of making money I have ever come across, and absolutely anyone can do it. However, it does have a negative impact because it means that there is less property available to buy in the UK. The only solution to this is legislation and taxes (i.e. stop landlords doing too much of this, and tax them more heavily) and I honestly don't know if that could be done in a capitalist democracy.
7. uncle chris said...
My goodness, those investor prices are awfully steep for those parts of Liverpool. So as well as making a monthly loss, having to fork out for maitenance and gas checks, and assuming your DSS tenants don't wreck the house, you start off (and are likely to remain) in negative equity.
Anyway guys, ignore them and try my investment vehicle. I will sell you 'Uncle Chris' investment bonds (AAA rated - honest) for 20-30% more than they are worth and you can pay me a monthly dividend plus yearly administration fees for the next umpty-ump years. Any takers ...... no ...... sounds silly ...... then why on Earth would people buy these BTL's !!!!!
8. renting2 said...
Sorry Ndharris, but those figures quoted are for interest only mortgages. ie you still owe the capital £70,000 when you sell the house after 25 years. Then you've got all those bills etc. Does it still sound a bargain?
9. su said...
The first house at the top: 21 Greenway Road "2 bed end terrace"
What's the definition of a terraced house in Liverpool?
10. inbreda said...
"Then they sell the property for £70,000 (or even £35,000 if property's value halves) and make a huge profit."
or perhaps £10,000 - that being what the property is actually probably worth.
Plus the figures quoted look like IO. So in actual fact, after subsidising teh tenant for 25 years (the tenant paying from the social, so in effect the BTLers taxes are paying their own rent) you can sell the property for a £60k loss.
The time to buy is gone. The time to sell is about to become past tense.
11. su said...
The 2 bed "end terrace" attracts the same rent as the 3 bed end terrace - even though the 2 bed is cheaper to buy.
Moral of the story: If you buy to let, stick to buying smaller cheaper properties - you won't get any more rent for splashing out on bigger properties.
12. The Baldman said...
NH harris this is an interst only mortgage you always owe 70K.. Also remember if the tenant has been incorrectly claiming benefits the landlord has to repay. Just invest the £400 in a well managed fund and you will make more money over 25 years. BTL has had its day until capital values are 30+% lower.
13. Ndharris said...
Hi renting2,
Yes you're right, good point. If that is interest only then not much good for the landlord, and if the house value drops over 25 years then very bad news for the landlord. I am a BTL landlord receiving £600 per month with a repayment mortgage of £900 per month. That means I am paying £72,000 over 20 years to buy a flat currently worth £160,000. I suppose its value could drop below £72,000 but I very much doubt that would happen over such a long period as 20 years. Maybe this specific Liverpool option is not a good opportunity, but it doesn't mean that all BTL landlords are going to have failed investments! Cheers...
14. doom&gloom said...
This is suggesting that 'investors' can get a mortgage for 100% of the ('investor') price. Nonsense - 85% at most. Who wouldn't jump at the opportunity of 21 Greenway Road: "lose £35.42/month before taxes, expenses, and void periods! Sign here now!"
15. justwatching said...
hope interest rates don't go up, that may scupper the figures. Lets hope the roof doesn't need replacing, what about if you can't find a tennant, or even one that doesn't pay the rent, or even one who decorates the walls in sh*t. That could cost a few quid. WHY WOULD ANYONE PILE INTO AN INVESTMENT WHICH EVEN THE DONKEY ON THE BEACH KNOWS IS EXPENSIVE.
PRICES CAN GO DOWN YOU KNOW.
16. it_is_going_with_a_bang said...
There are plenty of ways to go bust owning a BTL. That is one shining example of what not to do.
Unless you are a clown.
17. little professor said...
This is suggesting that 'investors' can get a mortgage for 100% of the ('investor') price.
Yes, they can, thanks to dodgy accounting, as revealed by the Panorama programme.
The vendor simply tells the bank the real value of the property is £97,000. The buyer gets a £77,000 (80% LTV) mortgage from the bank, and stumps up 20% deposit (which has been given to them by the vendor.)
Then the bank hands the full £97,000 over to the vendor on sale day. Vendor is quids in, buyer has nice 100% LTV mortgage, and bank is stuck with a house that is worth less than the loan they have secured on it.
18. i-cld-murder-a-blt said...
Dont forget to wear a stab vest when collecting the rent.
When driving round, would recommend toughened glass as well.
Wha hahaha hhhaaaa haahaha hehe hee hee
19. doom&gloom said...
@Little Professor "Yes, they can, thanks to dodgy accounting, as revealed by the Panorama programme."
'Gifted Deposit' schemes and such like are much harder to pull-off now, although v common last year. Requires compliant solictor and surveyor and the spotlight is on the whole murky arrangement since panorama et al.