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laughing_goat

Had A Thought About Serious Ll's

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After seeing uncle Trev's programme last night I thought, that the serious, experienced LL's would be looking forward to a property crash.

If I'm right, they would usually buy property at auction, maybe tart it up a bit (or do nothing) and then rent it out.

During the boom, the auction houses have been full of novice BTLers pushing the prices of these properties upwards and causing the rental market to saturate. Surely now these BTLers can no longer afford to buy at auction (or are even selling at auction), the prices have come down and the rental market is better for the LL.

Of course, I suspect most of those houses being sold to the BTLers in the boom were from the experienced LL, so it could be a case of a win, win situation. But surely they would playing the same game as the STRer? Buy low, rent out, then sell high, bank the money for a while and then start again. So by now they would have sold there portfolio and be ready to buy again, cheaply?

All this said, I must have this wrong, because whenever I read a property forum, the experienced LL's are usually very bullish.

Does this mean I've got it all wrong (highly likely) or are the 'experienced' LL's on these forums really BTLers?

Please feel free to set me straight if I've missed the point, this is a genuine question.

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It occurs to me that the experienced LLs know precisely which way the market is heading but they would like it to happen in an orderly way so that they can manage the process. (Current values are only a loss in relative terms against previous value. They are a gain in relative terms against expected values.) A downward curve rather than a crash would probably be a better management. In that situation I would stay as bullish as possible to balance the bears.

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True investors.

Buy to Let:

They have owned since pre boom and will either have sold near the peak or will keep their investment as they arent looking to make money that way.

Big buy to let investors ditched their portfolio over a year ago and will rebuy more when the market drops.. their profit is in other areas.. areas that make money.. it will come back to the market when the time is right.

Speculators:

True investors left the market over a year ago. They watched the market, understand speculative markets..

those left..

Poor buggers who thought they had no choice but to buy .. believeing that if they didn't when they did they never would.

Inexperienced BTL.. the sacrificial lambs to a speculative market..

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Of course, I suspect most of those houses being sold to the BTLers in the boom were from the experienced LL, ...

...

All this said, I must have this wrong, because whenever I read a property forum, the experienced LL's are usually very bullish.

..

.... or are the 'experienced' LL's on these forums really BTLers?

silhouette200.jpg

We'll make a detective of you yet Watson!

PS : if you've read guys like Yieldman on singing pig who has been in the LL game for ~13 years you'll realise that even LLs with only 1 prop cycle's worth of experience are far from bullish about prices. Anyone who has joined since 97 has only seen rising prices. That's enough to make anyon eover confident.

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I raised this point with TTRTR.

Surely as a professional BTL investor, looking for high yields, you want low property prices?

After all, high prices encourage building, which adds to the supply, which reduces rents.

Not what professional investors want really.

I suggested that the best scenario was like the mid 90's, where prices were low, yields were high, interest rates were low, and the banks created high barriers to entry by not lending to every bipod with a heartbeat.

The golden days of BTL!

Now we have high prices, low yields, and (currently) low interest rates.

If you can fart you can get a mortgage.

Despite there not being any profit in the business, muppets have been piling into the market, and builders have been developing like crazy.

Result? Yields have collapsed.

Warren Buffet always said that he wanted low share prices.

He likes it when the stock market goes down, because as a consumer of the proceeds of company profits, it's better if you can buy those revenue streams at low cost.

But nope, TTRTR wants high house prices, after all, how is he ever going to pay back all that debt?

The way he's going, my guess is he never will.

Edited by BandWagon

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Do you think a professional land lord would go on an internet forum?

I doubt it.

No, I don't either. But there are quite a few posters, mostly on singing pig and TMF, claim they have had a portfolio pre 1990's. Are they imposters, are they as Elizabeth suggests trying to control the market, or (more likely) am I thinking about this too much?

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silhouette200.jpg

We'll make a detective of you yet Watson!

PS : if you've read guys like Yieldman on singing pig who has been in the LL game for ~13 years you'll realise that even LLs with only 1 prop cycle's worth of experience are far from bullish about prices. Anyone who has joined since 97 has only seen rising prices. That's enough to make anyon eover confident.

Wow, what great responses!

I was a bit worried I was asking a stupid question (still think it probably is), but I must say I'm delighted by the responses. This is the reason I joined this forum, to get answers to my questions. :rolleyes:

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  • 337 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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