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kman

Best Time Ever To Purchase Btl?

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A mate has purchased a btl property for 220k, with 25% down on a tracker his monthly payments are only £400, he can let said property for £1200+ pcm. Is he on to a winner? Haven't Japanese interest rates stayed at virtually at zero for the past 10-12yrs? Why should we expect any different?

Edited by kman

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Thats 55K he wont be seeing again soon then!

Does he owe you any money? - get it quick!

He could (as in peak rental prices) rent it out for £1200 pcm - not looking so rosy in the current rental marke though

I'll give him £500 pcm in 6 months time! - so he should be breaking even in 7 months time!

Assuming the boiler doesnt blow up!

Buy him a beer for me - sounds like a good egg for taking the depreciation hit for the rest of us!

Edited by sbn

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Thats 55K he wont be seeing again soon then!

Does he owe you any money? - get it quick!

He could rent out for £1200 pcm - not looking so rosy in the current rental marke though

I'll give him £500 pcm in 6 months time!

University town, letting property here never seems to be a problem. I'm no investor but with interest rates so low, where does one put their savings? his 55k will be earning him 800 a month ; sounds good to me.

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University town, letting property here never seems to be a problem. I'm no investor but with interest rates so low, where does one put their savings? his 55k will be earning him 800 a month ; sounds good to me.

Why dont you ask if you can "come in" on the deal?

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Why dont you ask if you can "come in" on the deal?

Just read your past posts - it appears you are not a troll.

FFS DO NOT ASK HIM IF YOU CAN COME IN ON THE DEAL!!!!!

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A mate has purchased a btl property for 220k, with 25% down on a tracker his monthly payments are only £400, he can let said property for £1200+ pcm. Is he on to a winner? Haven't Japanese interest rates stayed at virtually at zero for the past 10-12yrs? Why should we expect any different?

There is money to be made on rental income IF :

1. over the next ?3 years you do not need to sell.

2. you pick the correct property type/location that will give a high occupancy.

3. Interest rates do not explode and he/she cannot get out of his mortgage deal and on to a fix because additional money is needed for the new deposit.

4. Rents do not implode.

But if your mate can use the profit to pay down the mortgage (+ some savings) and for the ~60k investment your mate will own a property and later down the line enjoy the full rental income.

If it was my money, I would only be jumping in when I house had lost a lot more of its value. Closer to 4x LOCAL average salary.

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Im half inclined to agree, esp if you have 50->100k in a bank earning nothing.... if you can negotiate a BIG discount, the higher income may offset further falls...

Edited by moosetea

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University town, letting property here never seems to be a problem. I'm no investor but with interest rates so low, where does one put their savings? his 55k will be earning him 800 a month ; sounds good to me.

So you think interest rates will stay this low?

Jees it never ceases to amaze me how stupid people are, even when its plastered all over the news.

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A mate has purchased a btl property for 220k, with 25% down on a tracker his monthly payments are only £400, he can let said property for £1200+ pcm. Is he on to a winner? Haven't Japanese interest rates stayed at virtually at zero for the past 10-12yrs? Why should we expect any different?

Where has he found a BTL tracker offering 2.9%? That astounds me.

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I hear that there is a portfolio of 1,000 BTL properties in the Ashford area coming onto the market.

Buy a couple of hundred now. Prices are only ever going up ..... Debt only ever has to be serviced and not repaid ..... Rates are staying low forever .... Rents only ever go up ... The global economy is in great shape ......

What a ridiculous question and line of logic .......

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A mate has purchased a btl property for 220k, with 25% down on a tracker his monthly payments are only £400, he can let said property for £1200+ pcm. Is he on to a winner? Haven't Japanese interest rates stayed at virtually at zero for the past 10-12yrs? Why should we expect any different?

A mate of mine purchased some Northern Rock shares when they were dead cheap. He also believed he was "on to a winner".

his 55k will be earning him 800 a month

The bank's 165k is doing most of the work. As with any leveraged investment, his risks and returns are amplified - he is currently losing £4k or so each month on asset depreciation.

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Guest DissipatedYouthIsValuable
University town, letting property here never seems to be a problem. I'm no investor but with interest rates so low, where does one put their savings? his 55k will be earning him 800 a month ; sounds good to me.

Ok, assuming a £1200 a month rental. Student digs only occupied part of the year. Young 'professionals' - most renters I know are looking at around £300 a month + bills on a £1200-1400/month take home to cover paying off car loan, student loans, living life and trying to save.

*Sings*

"These piggies ride a train to Bulltrap......"

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Ok, assuming a £1200 a month rental. Student digs only occupied part of the year. Young 'professionals' - most renters I know are looking at around £300 a month + bills on a £1200-1400/month take home to cover paying off car loan, student loans, living life and trying to save.

*Sings*

"These piggies ride a train to Bulltrap......"

My brother has student BTL properties in the area and has had for many years (since the early 90's) all his properties are occupied for at least 50 weeks a year and the students have been willing to pay even whilst they are not living there.

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Best time ever?

I would think that 1920 probably beats it.

and 1921

1922...

And every year after that up to around 2003.

I would also suggest 2010 will be better than 2009.

But that doesn't mean it would be any better than tying your old fellow to a firework and lighting the blue touch paper.

Edited by bobthe~

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A mate has purchased a btl property for 220k, with 25% down on a tracker his monthly payments are only £400, he can let said property for £1200+ pcm. Is he on to a winner? Haven't Japanese interest rates stayed at virtually at zero for the past 10-12yrs? Why should we expect any different?

Two questions immediately spring to mind.

1. For how long does this tracker last for?

2. Can he guarantee that the base rate will be this historic low for the duration of the answer to 1.?

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Think about it. If something seems that easy then there must be a catch!

Otherwise someone a lot more savvy would have already done it.

Kman - as you used Japan as an example, it may be worth researching what has happened to house prices in Japan for the last 20 years

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A mate of mine purchased some Northern Rock shares when they were dead cheap. He also believed he was "on to a winner".

29 class racehorses have died in The Grand National since 1997. Everyone who backed them thought they were on a 'winner'.

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It really is impossible to say whether this is a good buy or not.

A while ago I was half-considering a BTL as a long term thing to be held over, say, a 20-year period, with a view to selling it at the very end of the mortgage repayment payment, I did a little modeland whether it stacked up or not turned on at least twelve different variables (see below). In particular, the rate of capital growth, or ungrowth, is vital, even if you hold it for 20 years. Interest rate variations are, of course, crucial too.

The variables in my model

Initial market price

Stamp duty at purchase

Gross rental yield on purchase price

Occupancy rate

Maintenance costs p.a.

Contents insurance

Buildings insurance and/or ground rent

Letting agent cut of rents + search fees

Deposit required

Interest rate

Mortgage duration (years)

Growth in rentals p.a.

Real growth in capital values p.a. up the point at which you sell

EA commission @ final sale

Edited by the flying pig

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Sounds like ******** to me.

+1 crap

cannot get that rate

also where can you rent a 220k house for 1200 at the moment? Only HMO/Students possibly.

This is a huge bull trap the patient is on life suport being injected with cheap IR the patient is either going to die or the cheap IR will be removed pending recovery.

Either way housing is foooooked

The smart homeowners are fixing and saving bunkering down. The stupid are waiting for the prices to go up and save them.

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Think about it. If something seems that easy then there must be a catch!

Otherwise someone a lot more savvy would have already done it.

Kman - as you used Japan as an example, it may be worth researching what has happened to house prices in Japan for the last 20 years

prices fell 40%.... so in theory if you negotiate a 35% discount... you need to make sure that 5% is covered by higher rates.

Assuming it is a 100k property, you need to earn at least at extra 5k (which is possible over a couple of years given current rates)

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