Bruce Banner Posted November 12, 2012 Share Posted November 12, 2012 Yes but isn't it more about taking on a mortgage and getting mug tenants to pay it off for you and it's a bonus to make a bit extra on top...? Because you own a house outright at the end of your mortgage term yet haven't paid any money towards it, your tenants do it for you Why is the tenant a mug? I don't consider myself a mug for paying less in rent than the opportunity cost of capital that would be otherwise tied up in an illiquid, depreciating asset. Many buy to lets are "bought" with interest only mortgages, at the end of which the full purchase price is due, even if it's more than the current value of the depreciating asset. Quote Link to comment Share on other sites More sharing options...
Venger Posted November 13, 2012 Share Posted November 13, 2012 Lots of people buying up property and trying to rent it out will mean lots of churn in the private rental sector and accurate price discovery. Low wage inflation and high inflation in other costs will keep rent inflation tepid, despite the hundred prognostications to the contrary from ARLA.The BTL game was always a greater fool based leveraged bet on the asset price bubble. Late entrant BTLers are heroes - gamely giving up their bubble equity to recapitalise the banks. The more of them the better. The only thing that strikes me as interesting is for how long the losses will have to continue before the great unwashed realise that they are being mugged by the banks. Agree. Probable 3p fuel duty rise coming and people squealing they can't afford essentials. Which? also said the figures showed 8.7 million households curbed their spending on essentials last month, while 6.4 million households used savings to cover outgoings. They're mugging themselves. They want BTL for their pensions in the face of housing crisis for the young, on the basis that people will be forced to rent no matter what. A crisis with very high asking prices and high rents in many areas of employment. Generally older people who bought their homes many years ago, looking to deliberately take advantage of others, given at the moment the banks are lending more generously to BTLers. I hope UKAR has been dumping their holding into this landlord buying frenzy whilst pursuing existing landlords on their main homes, or sweating them for repayments and arrears. Quote Link to comment Share on other sites More sharing options...
JustYield Posted November 13, 2012 Share Posted November 13, 2012 This business of taking the rental income from a BTL, dividing it by the sale price and calling it a yield is going to separate a lot of fools from their money. There's a huge push on in Singapore at the moment for London BTL. I recently went along to a JLL off-plan exhibition for the redevelopment in Finsbury Park N4. The sales girls were lovely. Looked ready to head out to the clubs right after they'd finished work. I briefly went through projected cash flows with one young lady. You know how they estimate the rent? They take 5% of the sale price and call that achievable rent. Then at the bottom of the cash flow, after all the working out, they show Gross Yield: 5%. Anyway I kept a few of their cards. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted November 13, 2012 Share Posted November 13, 2012 Agree. Probable 3p fuel duty rise coming and people squealing they can't afford essentials. They're mugging themselves. They want BTL for their pensions in the face of housing crisis for the young, on the basis that people will be forced to rent no matter what. A crisis with very high asking prices and high rents in many areas of employment. Generally older people who bought their homes many years ago, looking to deliberately take advantage of others, given at the moment the banks are lending more generously to BTLers. I hope UKAR has been dumping their holding into this landlord buying frenzy whilst pursuing existing landlords on their main homes, or sweating them for repayments and arrears. With reference to the which? quote. I have run out of money for the first time. 3 days before payday with no excuse to liberate some savings because of an extraordinary expense. This is why I'm becoming more militant toward my housing costs. It's can't be sustainable. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted November 13, 2012 Share Posted November 13, 2012 There's a huge push on in Singapore at the moment for London BTL. I recently went along to a JLL off-plan exhibition for the redevelopment in Finsbury Park N4. The sales girls were lovely. Looked ready to head out to the clubs right after they'd finished work. I briefly went through projected cash flows with one young lady. You know how they estimate the rent? They take 5% of the sale price and call that achievable rent. Then at the bottom of the cash flow, after all the working out, they show Gross Yield: 5%. Anyway I kept a few of their cards. I find that very encouraging, a sure sign that the bubble is reaching it's final stage, desperately sucking in new investment from afar. Quote Link to comment Share on other sites More sharing options...
Crashman Begins Posted November 13, 2012 Share Posted November 13, 2012 +1 With one caveat - it was only capital appreciation if nobody was getting funny with the money in which the price was denominated. That ship sailed. The only way to see that kind of price inflation continuing will require the value of our money being destroyed. Agree Quote Link to comment Share on other sites More sharing options...
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