What A Cretin

[purplemonkey]

I don't really post much here anymore cause I'm bored of house prices going up, and saying there going to go down soon, I feel like a salmon most days.

but I just read this artical and I have to make sure you guys have read it, what a t0zzer this ajay charactor is. his advice buy a house for 100k rent it for 10k a year. easy as that :-)

http://money.uk.msn.com/mymoney/asktheexpe...umentid=1354230

[crashmonitor]

I don't really post much here anymore cause I'm bored of house prices going up, and saying there going to go down soon, I feel like a salmon most days.

but I just read this artical and I have to make sure you guys have read it, what a t0zzer this ajay charactor is. his advice buy a house for 100k rent it for 10k a year. easy as that :-)

http://money.uk.msn.com/mymoney/asktheexpe...umentid=1354230

Not such bad advice really.Since the 10% yield doesn't exist,anyone reading Ajay wont buy a house as an investment.

[Orbital]

I don't really post much here anymore cause I'm bored of house prices going up, and saying there going to go down soon, I feel like a salmon most days.

but I just read this artical and I have to make sure you guys have read it, what a t0zzer this ajay charactor is. his advice buy a house for 100k rent it for 10k a year. easy as that :-)

http://money.uk.msn.com/mymoney/asktheexpe...umentid=1354230

still going up!

http://money.guardian.co.uk/houseprices/st...1960695,00.html

[othello]

Another property charleton. Probably makes more money from purveying his maladvice than from investing in property. As long as the suckers keep on coming, he'll keep on making money

[mahmon]

still going up!

http://money.guardian.co.uk/houseprices/st...1960695,00.html

Whether or not the prices are still going up are not necessarily relevant to the investment stategy that Ajay is advocating;

If you purchase a BTL without enough yield to build up a buffer then it means that there is no spare cash accruing to cover unforseen maintenance charges or periods of empty let. Should circumstances change, lose the tenant, lose your job, roof need repairs etc, then without a buffer the landlord would become a FORCED seller, then it is not what the property is worth that is the most important factor but what you can SELL it for QUICKLY. Even with a FTB purchasing I doubt anyone could market, sell, exchange, survey and complete in under 2 months. Not without offering a bargain price.

BTW Of course AJAYs reply makes him sound like a TW^T because as we all know there are no BTL's offering 10% yield

[HenryWeston]

Ajay’s response:

I too think the UK housing market is experiencing a slight over-valuation.

[tenroom]

Not such bad advice really.Since the 10% yield doesn't exist,anyone reading Ajay wont buy a house as an investment.

Actually it does exist. A good friend has recently bought a couple of 3-bed ex-local authority flats in low-rise (no more than 3 floors) buildings which are more than 40% OO. They're both close to tube stations in the Royal Borough and local supermarkets. He rents them out to housing associations on 5 year leases. Gets £2K per month on each after doing just over £450K for the pair. Damn sight better than the 5% yields the period conversions are getting these days . .

[peemac]

Actually it does exist. A good friend has recently bought a couple of 3-bed ex-local authority flats in low-rise (no more than 3 floors) buildings which are more than 40% OO. They're both close to tube stations in the Royal Borough and local supermarkets. He rents them out to housing associations on 5 year leases. Gets £2K per month on each after doing just over £450K for the pair. Damn sight better than the 5% yields the period conversions are getting these days . .

Ok then, you could say it's unusual.

You only have to look at rightmove.

100k buys you this monstrosity in birmingham: http://www.rightmove.co.uk/viewdetails-137...=1&tr_t=buy

10k a year rent gets you this: http://www.rightmove.co.uk/viewdetails-603...1&tr_t=rent

Surely Ajay ain't serious innit?

[Smell the Fear]

I don't really post much here anymore cause I'm bored of house prices going up, and saying there going to go down soon, I feel like a salmon most days.

Do you mean you have been slaughtered, smoked,sliced, sold and then eaten by the rich?

[ABN]

He rents them out to housing associations on 5 year leases. Gets £2K per month on each

did I see a flying pig go past the window?

Don't beleive everything your told ...

[tenroom]

did I see a flying pig go past the window?

Don't beleive everything your told ...

I don't in general but considering Notting Hill Housing Trust offered me only a little less for mine 2.5 years ago, I think it's safe to trust him on this one.

[steve99]

Actually it does exist. A good friend has recently bought a couple of 3-bed ex-local authority flats in low-rise (no more than 3 floors) buildings which are more than 40% OO. They're both close to tube stations in the Royal Borough and local supermarkets. He rents them out to housing associations on 5 year leases. Gets £2K per month on each after doing just over £450K for the pair. Damn sight better than the 5% yields the period conversions are getting these days . .

A friend who bought her council flat has been stung so many times for building mantainence that she would have been much better off renting, she has had it for 15 years and to date she has paid out nearly 100K in various fees, this is on a tiny studio flat. Check this out for a list:

£20K for new roof

£10K for new windows (was nothing wrong with the old ones)

£25 K for a new security system ( which failed within 1 week of instalation and still hasnt been fixed , this was 5 years ago)

£12 K for another set of windows ( they replace em every 10 years just because??)

£6 K to replace the concrete paving stones in a comunial court yard ( I could have done it for £2K and this was costed out between 10 flats ie 60K for 2Ks worth of concrete blocks and labour)

many other fees and service charges way in excess of normal maintinence you would pay on a normal house (10 bed house would be much cheaper)

This is not to mention the types of neighbours the council sees fit to dump on you, ex cons, drug addicts/dealers and other filth all paid for by taxpayers

They seem to do these things as a mater of routine, as stated she had to pay for 2 lots of PVC windows, there was nothing wrong with the original cast iron windows which had been there since the 30's, The fees they pay are well over the top and although the council can justify them on paper, the sums in reality dont add up, this poor woman got an independent double glazing salesman in who gave her a quote of 4K however the council has them specialy made and has to have lots of well paid cretins involved in the process, this has all been taken to court by the owner ocupier association and unfortunatly they lost.

Another issue with renting out to councils is the fact that most of their tennents are on housing benefit, if the housing benefit agency stops payments because the claim is fraudulent then guess who has to pay them back for the whole time the claim was fraudulent? Ill give you a clue, Its not the tennent, and its not the council. (get a lawyer to read the fineprint)

This is just a warning to those thinking of buying ex council flats, especialy in inner London boroughs. Wont say where exactly cause they like to sue anyone with an opinion.

Edited December 1, 2006 by steve99

[purplemonkey]

Do you mean you have been slaughtered, smoked,sliced, sold and then eaten by the rich?

actually I meant it in the uphill struggling way of a FTB. but I think your statment is ye olde nail and head scenario.

I'm quite annoyed by Ajays artical, cause its on MSN so people might read it and believe it. I bet he's bought all these cr*p houses in cr*p areas, can;t get any tennants in them, and its his idea to generate some new buyers for his cr*ppy stock. so he writes this artical convincing people that buying cheap houses in crap areas is a great idea cause you can rent them out for top dollar? such a c*ck, he needs putting down.

sorry for the rant.

[DaggaDagga]

This is just a warning to those thinking of buying ex council flats, especialy in inner London boroughs. Wont say where exactly cause they like to sue anyone with an opinion.

Agreed, don't touch ex-council flats with a bargepole. I saw some telly programme where the council insisted on re-roofing a block because the roof was 30 years old - this was their policy. They filmed inside the loft and it was as good as new. For giving this job to some back-hander builder they were asking all the right-to-buy owners for thousands each. As the council own more than 50% of the block, what they say goes.

I'd go a step further and say avoid anything other than freehold. Far too many complications with all the leasehold nonsense.

[tenroom]

Another issue with renting out to councils is the fact that most of their tennents are on housing benefit, if the housing benefit agency stops payments because the claim is fraudulent then guess who has to pay them back for the whole time the claim was fraudulent? Ill give you a clue, Its not the tennent, and its not the council. (get a lawyer to read the fineprint)

This is just a warning to those thinking of buying ex council flats, especialy in inner London boroughs. Wont say where exactly cause they like to sue anyone with an opinion.

While that nightmare scenario might hold true for traditional rental arrangements between tenant and landlord, it doesn't work like that when you lease propety to a housing association. Because my friend is leasing his properties to the housing association, his contract is withthem and not with the actual tenants who'll be living int he property. What this means is that in the event of any fraudulent claims, the Housing Benefit agency would claim back money from the housing association and not my friend. The Housing Association cannot approach him for recompense.

I admit that purchasing ex-local authority property can be fraught with pitfalls similar to those you describe but there are ways in which you can protect yourself. It's no different to buying private really. You do have to know what major works are planned and you do have to do some research into the local authority's record on maintenance because not all lawyers are created equal.

I found myself in a situation where I was going to have to dish out nigh on £13,000 for roof repairs and window replacement - both of which really needed to be done. I got a grant from the local authority as I'd recently been made redundant. They paid the lot and as long as I didn't sell up before 5 years, I wouldn't have to pay a bean. You just have to know how to deal with these things and ensure you're fully informed.