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cupidstunt

Why I'm Getting Out Of The BTL Market

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Some of you (who've read ther of my threads) will know I STR'd last November. I wanted to move and had a cash buyer who wanted to Exchange and complete within a month - so had to move into rented. I thought about buying another place but everthing just looked why overpriced! It's not that I can't afford somewhere else, but common sense telling me that the markets just gone plain crazy.

Anyway without boring you all with a long post, I had a leter from the Agent who handles my 2 BTL's telling me that the tennants of one have "not been looking after it" and assume the worst. Looking at the yields which aren't much more than 3% net I've decided I've had enough! I bought one property 10 years ago now nearly x4 and the other 8 years ago x3 I've made a great cap app on both but can't see the point of continuing when the figs just don't add up! I'm going to give the tennants two months notice tomorrow then flog them both and pay the CGT. I might re-enter the market at sometime in the future, but certainly not until I can get yields of 7%+

Anybody entering the BTL Market today is barmy.

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Is that 3% a notional yield based on present value? If you bought 10 years ago you should be seeing a better actual return than that.

Yes obviously original yields were over 10% When I bought them they were part of my Investment portfolio for my retirement 10 years ago at 40! At the time of purchase I'd assumed a cap app of 100% over a period off 10- 15years. At there current values I'd be silly not to sell? I can get a better return on a deposit account!

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Good for you. On sale, a successful and well executed investment that has paid off.

And they say BTL is for muppets.

I don't think many on here would claim that BTL is for muppets if they bought in 1996-1998 or so. The muppets are the people buying now (like some I know at work).

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Good for you. On sale, a successful and well executed investment that has paid off.

And they say BTL is for muppets.

No, TTRTR. They say it's for muppets now, pretty much what Cupid is saying.

Seems he's less of a muppet than you, unless you're also selling of course.

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No, TTRTR. They say it's for muppets now, pretty much what Cupid is saying.

Seems he's less of a muppet than you, unless you're also selling of course.

Yeah right. Back in 1996 all my mates were telling me what a winner I was for spending my evenings & weekends renovating! <_<

I don't think many on here would claim that BTL is for muppets if they bought in 1996-1998 or so. The muppets are the people buying now (like some I know at work).

Same for you.

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Yes obviously original yields were over 10% When I bought them they were part of my Investment portfolio for my retirement 10 years ago at 40! At the time of purchase I'd assumed a cap app of 100% over a period off 10- 15years. At there current values I'd be silly not to sell? I can get a better return on a deposit account!

Can I be cheeky and ask (roughly) how much your CGT bill will be?

I'm talking as a % of your gain after the 10 years.

I assume BTL doesn't qualify for business taper relief. Therefore your CGT bill could be quite big.

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It could be as high as 40% of 60% of the gain (less deductable losses) after 10yrs.

:o Better hope he has some taper relief, or he could do a "I've lived here all my life, guv", eh, TTRTR?

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I might re-enter the market at sometime in the future, but certainly not until I can get yields of 7%+

Anybody entering the BTL Market today is barmy.

Oh that's interesting. So you have sold to rent as a private individual, but retained some Buy To Let properties and now have closed that "opportunity". It is extraordinary that you don't seem to see an extreme irony here. I always thought your online name was tastless. I'm beginning to understand it now.

Kind Regards,

VP

Edited by VacantPossession

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Yeah right. Back in 1996 all my mates were telling me what a winner I was for spending my evenings & weekends renovating! <_<

Same for you.

Hello TTR. You have to say that in hindsight 1996 was THE time to buy. And congratulations for your empire building then. Looking at where we are today, with foresight, the prospect of buying to let is a muppets game.

Stop being so defensive all the time. Admit it is not now a time to buy to let. Failing that go out and buy another yourself. You know you won't because you are not stupid.

Good to see you're still around though..

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:o Better hope he has some taper relief, or he could do a "I've lived here all my life, guv", eh, TTRTR?

That's why I'm wondering why he says he can get a better return from a deposit account. Will that still hold true after the CGT deductions?

Mind you, I suppose it depends how much tax he is currently paying on the monthly rental income.

Edited by Without_a_Paddle

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I might re-enter the market at sometime in the future, but certainly not until I can get yields of 7%+

Congratulations on deciding to get out of BTL.

All it needs now is for the rest of the BTL brigade to follow your example, thereby bringing house prices back to more sensible levels.

:)

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Oh that's interesting. So you have sold to rent as a private individual, but retained some Buy To Let properties and now have closed that "opportunity". It is extraordinary that you don't seem to see an extreme irony here. I always thought your online name was tastless. I'm beginning to understand it now.

Kind Regards,

VP

Sorry, I don't get it. Where's the irony? He had some investments, he's selling them up. And as a private individual, he's living where he chooses to live on the terms he chooses to.

Basically, he's calling the top of the market. What's the problem for you here?

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Good for you. On sale, a successful and well executed investment that has paid off.

And they say BTL is for muppets.

Buy low but make sure you SELL high. The losers are the ones who hang on too long and get caught in the rush for the exits.

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The losers are the ones who hang on too long and get caught in the rush for the exits.

When IRs go up, TTRTR might be able to raise his rents - but that's neither here nor there since the ensuing property crash will have wiped out a big swathe of his equity! I don't understand some people. :rolleyes:

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Guest muttley

That's why I'm wondering why he says he can get a better return from a deposit account. Will that still hold true after the CGT deductions?

Mind you, I suppose it depends how much tax he is currently paying on the monthly rental income.

At least he doesn't have the hassle of running the business.

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Yeah right. Back in 1996 all my mates were telling me what a winner I was for spending my evenings & weekends renovating!

you mean a condom packet was talking to you and encouraging you to become a BTL ?

thats quite a story. what else did they say. did they mention sweden and the norfolk broads ?

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Yeah right. Back in 1996 all my mates were telling me what a winner I was for spending my evenings & weekends renovating! <_<

Same for you.

OOOoooh. Who's got the painters in...

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Hello TTR. You have to say that in hindsight 1996 was THE time to buy. And congratulations for your empire building then. Looking at where we are today, with foresight, the prospect of buying to let is a muppets game.

Stop being so defensive all the time. Admit it is not now a time to buy to let. Failing that go out and buy another yourself. You know you won't because you are not stupid.

Good to see you're still around though..

Foresight is subjective. Having said that, why would I want to sell on the verge of higher HPI on the back of higher inflation including higher rents that will restore the yield proposition that cupistunt doesn't like?

No need to answer BTW.

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At least he doesn't have the hassle of running the business.

That's true.

But I'm still intruiged about this from a tax point of view.

I'm the first to admit I'm no tax guru but I'd like to ask a few tax questions (aimed at everyone, not CS)

I thought one of the benefits of BTL was that you could claim some tax relief against rental income. By that I mean you don't pay tax on the part of the rental income used to pay off the interest on your (IO?) loan.

As CS has owned his BTLs for many years, I would guess maybe half of his rental income is now taxable as his interest payments will be small wrt the rent.

If he also has a half decent dayjob then his combined annual income will take him into 40% tax territory.

So he must be getting taxed on the rent. I know he can claim relief for wear and tear and maintenance, but I doubt this will offset much tax in his case.

Therefore I'm wondering why he STRd last November. If he had a mortgage on his main residence then I would have thought he could use the rental income to pay his interest on his mortgage and dodge the tax on his rent. Is this the case?

I also assume he can't use 'BTL rent' to 'pay his STR rent' to offset tax.

Like I said, I'm not a guru on tax, hence the questions.

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  • 301 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% +
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      • Even
      • up 2.5%
      • up 5%



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