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Zaranna

Btl....

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Interesting to note that the mortgage agreement specifies that they must use a letting agent. Why? Do the mortgage companies think that a letting agent is more likely to get tenants in? And if so are they right?

Billy Shears

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A nagging fear that the Crowd just might be wrong...

the bandwagon hurling into BTL at such puny yields might just be headed for disaster.

And a "low risk investment" involving high gearing, and ignored vulnarabilities,

just might not be a good idea

People keep on saying that property and BTL is a "low risk investment". I note the quotes and that this is not your opinion. But one thing that no-one says very much is that because people typically borrow most of the money to buy properties, it's one of the few investments where it's not only possible to lose all your money, but also to lose more than you originally invested. If someone "invests" 25K into a 250K house at current prices, and the price drops to 200K, then the amount lost is 50K (plus costs, rent not covering the mortgage, etc.), which is twice what was originally invested. This sounds like a pretty damn big risk to me.

Billy Shears

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People keep on saying that property and BTL is a "low risk investment". I note the quotes and that this is not your opinion. But one thing that no-one says very much is that because people typically borrow most of the money to buy properties, it's one of the few investments where it's not only possible to lose all your money, but also to lose more than you originally invested. If someone "invests" 25K into a 250K house at current prices, and the price drops to 200K, then the amount lost is 50K (plus costs, rent not covering the mortgage, etc.), which is twice what was originally invested. This sounds like a pretty damn big risk to me.

The risk is actually far greater than that. To get finance on BTL they will want security of your principle property in most cases. In fact they have it anyway.

If your BTL fails, you not only lose your 50K but you will also have to make up any further losses from the sale of your principle property.

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Follows on nicely to my "Todays BTL muppets on MSE" threads :lol:

http://forums.moneysavingexpert.com/showth...41&page=2&pp=10

Look at sukey13 details - todays BTL muppet!

He's an absolute muppet, but he does say one thing correctly (hightlighted in bold):

Ask letting agents their opinion on properties and areas before you buy also.

Do NOT wait for the crash. Noone has a crystal ball.

In the long run property will go up and if you buy for less than what it's worth you can always sell up and make a profit. And an even better profit if you can add value.

Don't neglect the possibility of creating extra cashflow by renting out rooms instead of the property as a whole. Just contact you local environment health officer at the local council to the property to get an idea of how much you have to spend on getting the property up to HMO regulations. Also you have to add in council tax and other bills.

Act now, do your research and buy low and sell high.

If he did his research, he'd find he was about to bend over to pick up the soap. However, his signature is even better:

Outgoings approx. £2,000 pm

Profit from Property A £100 pm

Proft from Property B £1,000 pm

1 Buy to Sell property being refurbed. Estimated profit: £50,000

1 Buy to Sell property exchanged: £15,000 profit!!!

1 more Buy to Sell on the market: Potential profit £25,000.

1 sell and rent back being purchased, approx. £100 more profit a month.

4 tenanted flats being purchased: Potentially a No Money Down Deal, £20,000 cash back out in pocket and £400 - £800 per month cashflow.

Credit card debt don't ask - but I am buying assets and will pay it off.

How many multiple streams of income do you have?

Don't ask about his CC debt? Potential profit? Cash back? How many more people are living like this day in, day out? And with the crap advice he's giving, maybe I won't give a shit when things go tits up for him and his kind

Edited by Mr Blek

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  • 302 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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