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Ea Basically Told Me To Walk Away Today

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Been eyeing up an apartment for use as a BTL this week. Went in to go over the maths with the EA today, and he basically told me to walk away from it. Asking price 120K, even if the EA could get it down to 100K with a 40% deposit he couldn't make the figures work, and advised me to walk away.

There's got to be more pain to come.

I'm a bear all the way, but just hanging about for the right bargain, and if the maths work I'll be happy to snap up 2 or 3 deals <_<

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What were the maths?

Out of interest...

GBP450 rent per month max. (GBP400 will probably be more realistic)

10 month occupancy a year = GBP4500 income

5 year fixed rate at 6% on GBP60K = GBP3,600 per year interest

Insurance per year at GBP500

Lease cost GBP200 per year

Total cost per year = GBP4,300 (if no other bills)

Profit of GBP200 on GBP40K deposit

I can get over 4% interest on savings tax free. Therefore it's GBP1,600 for cash and GBP200 for BTL.

The only way forward he agree would be for prices to rise like in 2006/2007, but the guy was honest said his view was more declines, be it slow, and then a long period of stagnation.

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so you came across an EA with a conscience?

or did you come across an EA with an interest?

The guy was very honest and we got on well. He gave me good advise on tax and researching rent, including using other EAs for comparison. He too had BTL of his own.

But I did my own maths before hand and they matched his completely, I was just checking to see if he had access to a lender that may have a rate of 4.5%. He also advise me on other ways of obtaining a lower mortgage on a lower rate which I shalln't get into.

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Guest anorthosite
so you came across an EA with a conscience?

Parallel universe maybe?

Did the estate agent have a beard?

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Not sure the EA was being kind, I suspect he knew it would have been a waste of time trying to flog it to you

By the way if you have that amount of cash you can get yields of 8%+ from BTL if you look hard enough, I've been umming and ahhing about this.

Edited by wealthy

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Not sure the EA was being kind, I suspect he knew it would have been a waste of time trying to flog it to you

By the way if you have that amount of cash you can get yields of 8%+ from BTL if you look hard enough, I've been umming and ahhing about this.

I think a 8% yield can only be possible with repayment interest of 3% and below. Those kinds of loans will not last. Like I said I can achieve 4% tax free returns on cash so where's the profit for the bank? As much as we like to hate them banks have to make a profit.

There's even quicker ways of making a quick return right now especially if you are close to retirement age.

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GBP450 rent per month max. (GBP400 will probably be more realistic)

10 month occupancy a year = GBP4500 income

5 year fixed rate at 6% on GBP60K = GBP3,600 per year interest

Insurance per year at GBP500

Lease cost GBP200 per year

Total cost per year = GBP4,300 (if no other bills)

Profit of GBP200 on GBP40K deposit

I can get over 4% interest on savings tax free. Therefore it's GBP1,600 for cash and GBP200 for BTL.

The only way forward he agree would be for prices to rise like in 2006/2007, but the guy was honest said his view was more declines, be it slow, and then a long period of stagnation.

So 40K cash :blink: , You are poor, very poor, and would need to actually borrow some money to buy the place. :lol:

Please leave these places for those that have 110K cash.

Whose actually going to lend that amount to you? Leverage on a fancy buy-to-let mortgage ??

Buy it for 40K cash and I think it would "work", or find somewhere you can buy for 40K. I think this place is well out of your league.

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Would be funny if the EA went out and bought it.

I would pat him on the back. Especially if the markets turned up and he made a quick profit flipping it. There's no free lunch in life (unless he can allow himself to go bankrupt in which case the rest of us picks up the tab).

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So 40K cash :blink: , You are poor, very poor, and would need to actually borrow some money to buy the place. :lol:

Please leave these places for those that have 110K cash.

Whose actually going to lend that amount to you? Leverage on a fancy buy-to-let mortgage ??

Buy it for 40K cash and I think it would "work", or find somewhere you can buy for 40K. I think this place is well out of your league.

LOL. This is one of the reasons I rarely post, too much testosterone around here.

You're obviously not a very good poker player to think I would paste all my circumstances on a forum and reveal all me cards!

I didn't say I had only 40K. I said was only prepared to put down 40K for that unit. Why use my own cash instead of leveraging a better deal?

There were more clues in my posts about my circumstances. Do you seriously think you can get 4% from cash deposit savings with a sum of 40K??? You need over 100K to achieve that kind of rate.

Sorry try again :P

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To be fair - you and he did the sums and they blatantly didn't add up - he knew he couldn't hide that and he knew that you were clued up wrt the figures.

good outcome I say - he did you a favour.

I would look for yields at 10%+ for an investment and less (prob 6+) for home.

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To be fair - you and he did the sums and they blatantly didn't add up - he knew he couldn't hide that and he knew that you were clued up wrt the figures.

good outcome I say - he did you a favour.

I would look for yields at 10%+ for an investment and less (prob 6+) for home.

Totally agree.

Firmly believe you make your money when you buy and not when you sell.

You would have done much better if you timed (or got lucky) with the stock markets in the past 6 months. My investments there have returned 100% profit before tax. Get out now before it's too late though. A bit of a Russian roulette going on at the moment.

Thank you Gordon for you QE handout :lol:

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probably just a seasonal slump in rentals but round my way although the b+bs are full, the To Let boards are prolific with only a few Let.

Same where I am with regard to lets. Flooded.

I negotiated a large drop on mine but reckon I'm paying over the odds just 3 months into my agreement.

Rent and save, rent and save.

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I would go ahead and buy. Surely the crisis is over and prices are booming now again, therefore accidental LL would diminish in the next few weeks so you can increase your rent assumption and your ocupancy assumption to 12 months right away. That EA has to understand.

Surely BTL mortgage rates are dropping like a stone now.

Buy that house and help in a bidding war that will make a FTB unable to buy it and be priced out again.

Do all that please, so I can come a few months down the line and have it back from you for naught when you have to be repossed out of it.

Please.

Edited by Old_Traveller

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10 months occupancy?

Is it a holiday home?

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LOL. This is one of the reasons I rarely post, too much testosterone around here.

You're obviously not a very good poker player to think I would paste all my circumstances on a forum and reveal all me cards!

I didn't say I had only 40K. I said was only prepared to put down 40K for that unit. Why use my own cash instead of leveraging a better deal?

There were more clues in my posts about my circumstances. Do you seriously think you can get 4% from cash deposit savings with a sum of 40K??? You need over 100K to achieve that kind of rate.

Sorry try again :P

yeah but no but, the return was not worth it with a loan.

If you have the cash, then you could make it worth it.

there, ive revealed me cards.

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So where are you getting 4% tax free on the cash, if you don't mind me asking?

Not doubting you, just rather interested.

I have dual residency so I have access to off shore accounts. The only reason I'm using them is that the notice period is much shorter so I can keep things liquid (3 months).

In the UK you can still get very good rate if you tie in for 1 to 3 years. 3 yr tie is the max I would go for as I see IR moving up after 2 yrs from now.

Post Office 3.85% 1yr, 4.15% 3yrs (Growth Bond Issue 9. This is not the N&I product butrun by bank of Ireland and thus has a higher protection of up to 100K Euros)

http://www.postoffice.co.uk/portal/po/cont...ediaId=52900695

YBS 4% 3yr E-Bond

http://www.ybs.co.uk/savings/online/ebond/...nerPromo_june09

Nationwide 5yr ISA 4.5%

http://www.nationwide.co.uk/savings/all_ac...ll_accounts.htm

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I have dual residency so I have access to off shore accounts. The only reason I'm using them is that the notice period is much shorter so I can keep things liquid (3 months).

In the UK you can still get very good rate if you tie in for 1 to 3 years. 3 yr tie is the max I would go for as I see IR moving up after 2 yrs from now.

Post Office 3.85% 1yr, 4.15% 3yrs (Growth Bond Issue 9. This is not the N&I product butrun by bank of Ireland and thus has a higher protection of up to 100K Euros)

http://www.postoffice.co.uk/portal/po/cont...ediaId=52900695

YBS 4% 3yr E-Bond

http://www.ybs.co.uk/savings/online/ebond/...nerPromo_june09

Nationwide 5yr ISA 4.5%

http://www.nationwide.co.uk/savings/all_ac...ll_accounts.htm

bank of Ireland.....you are having a laugh arent you?

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Not sure the EA was being kind, I suspect he knew it would have been a waste of time trying to flog it to you

By the way if you have that amount of cash you can get yields of 8%+ from BTL if you look hard enough, I've been umming and ahhing about this.

I'm heading to the autions in a few weeks time. 2 bed, 2 reception room terraced house advertised at £35k but needs modernising - ca.£10k work. In todays market, it will bring in between £375 to £400pm.

Yes, there is still good returns in BTL out there, but they are not common.

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Honesty is the best policy and quite a rarity in this day and age :( .....Nationwide 4.5% 5 year fixed interest rate....going up. ;)

Exactly, they tie you in to a low rate for saving. BOE eventually has to increase their IR. Lending rate goes up. Bam you're locked into a low rate, they make money.

IR are artifically low by a long long way. The only way to benifit is to take that QE handout right now. Lots of people doing it both sides of the pond :D , but probably too late to join the club right now.

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