Btl = Control

[WiseBear]

http://www.yourmortgage.co.uk/showPage.html?page=3624664

Landlords invest in buy to let becuase of the control they have over their investment

Aug 17 2007

New landlords are choosing to invest in buy to let property because they have greater control over their investment, according to a survey by Mortgage Trust.

The survey shows that 32 per cent choose to invest in buy to let property because they will have greater control over the success of their investment, compared to alternatives.

John Heron, managing director of Mortgage Trust, said: "With buy to let, investors are in the driving seat. As financial markets become increasingly volatile, this level of control will become more attractive to investors."

However, 68 percent claimed that expected better returns than other investments was the reason they opted to invest in buy to let property.

"Investors continue to be attracted to the private rented sector due to the good returns," added Heron .

"While there is uncertainty in many financial markets at the moment, it is clear that landlords believe buy to let remains a solid investment option."

So what control does a BTL actually have?

Control over rents? No - rents are dictated by the market.

Control over the price of their property? Nop - market again.

Control over their mortgage rate? Sorry.

Control over returns? Yes according to the article but arn't returns a function of rents, property value and mortghage rate?

I'm struggling here can someone please explain what control they have to make it such a "solid investment".

Thanks.

[Gone baby gone]

The only thing I can see they have is the illusion of control. An illusion that has been largely created by a 10 year long bull market in property.

[gravity always wins]

I suppose if your money was in one of these dodgy hedge funds and they closed it to withdrawals you have no control.

But if you have a BTL you can decide to sell it any time you like.

Some crumb of comfort

[Madman]

http://www.yourmortgage.co.uk/showPage.html?page=3624664

So what control does a BTL actually have?

Control over rents? No - rents are dictated by the market.

Control over the price of their property? Nop - market again.

Control over their mortgage rate? Sorry.

Control over returns? Yes according to the article but arn't returns a function of rents, property value and mortghage rate?

I'm struggling here can someone please explain what control they have to make it such a "solid investment".

Thanks.

No, BTL = Selfish & Irresponsible.

[OverInflated]

I'm struggling here can someone please explain what control they have to make it such a "solid investment".

Thanks.

Unlike Stocks and Shares which can go up or down (And you have no control over that), house price only ever go up, so by buying a house and renting it out they have effectively given themself a ever increasing asset and someone else is paying for it. Simple really.

[Bearback]

Using the word "control" maybe some kind of code word for droit de seigneur.

Edited August 19, 2007 by Bearback

[ScaredEitherWay]

BTL is brilliant because:

1) You can borrow the money so easily - and you can get your deposit by re-mortgaging your existing house, so you don't even need any money to start.

2) House prices only ever go up

3) Rents will always cover mortgage payments. Especially with this great 2-year fixed deal obtained at 3.5%, which can of course be repeated when this one finishes.

4) Tenants are easy to find. The world is full of people dying to rent

5) Tenants are never late with their money. If they are, they can be turfed out immediately. And immediately replaced with somebody else - probably at a slightly higher rent

6) Property never degrades or requires repairs. Ever.

7) Property can be dumped quickly. All you have to do is phone up the estate agent and they can find you a buyer. You can probably bank your profits within 2 months.

8) Landlords are raking it in hand over fist from tenants. Always have, always will

9) You can further increase your portfolio of properties without any further investment of your own money, as soon as prices have gone up, you can simply re-mortgage to get the deposit for the next one. Based on 15% growth per year, this means you can double your portfolio every year. The money's always there.

10) By increasing your portfolio, you are spreading your risk.

It's not like the stock market where you can lose a fortune over-night and have to use real money. Your own money.

So, yes, a BTLer is in total control. King of all they survey. Properdee miw-yon-ayres.

Edited August 19, 2007 by ScaredEitherWay

[WiseBear]

Unlike Stocks and Shares which can go up or down (And you have no control over that), house price only ever go up, so by buying a house and renting it out they have effectively given themself a ever increasing asset and someone else is paying for it. Simple really.

Ah...now I understand.

I'm off to buy my first BTL and control my way to a fortune.

[PropertyGuru]

Lwets face it, for the last couple of years, buy to let hasn't made any sense at all. It's just the financially illiterate taking a huge leverage punt with the complicity of the barely-educated numpties currently running the financial sector.

[OverInflated]

Ah...now I understand.

I'm off to buy my first BTL and control my way to a fortune.

Here is the sneaky part though.

The more BTL's you buy, the more money you can make

[ebob]

http://www.yourmortgage.co.uk/showPage.html?page=3624664

So what control does a BTL actually have?

Control over rents? No - rents are dictated by the market.

Control over the price of their property? Nop - market again.

Control over their mortgage rate? Sorry.

Control over returns? Yes according to the article but arn't returns a function of rents, property value and mortghage rate?

I'm struggling here can someone please explain what control they have to make it such a "solid investment".

Thanks.

No fatherless individual can steal it from you, spend it withour your permission (on exemptions for the ultra rich, illegal wars, welfare on those that opt out of the workforce, etc etc). That is why it is more solid than other investments. Furthermore as governments and central banksers continue to play their money printing games, these inevitable actions only increase the value of your house, as more money is chasing a controlled commodity.

This and a thousand other reasons are why property has been and will continue to be a solid long term investment.

A couple of weeks prior to the current market turmoil, I had posted about how the authorities would step in if it got ugly. Many bears challenged me with beautifully presented cases as to how conventional economics would be breached, if the authorities intervened.

Evidently, I am not the one eating my words.

Ebob, Failed Bear tunred ultra cautious long term bull

[winkie]

You are always onto a winner with a BTL.

Property will always go up...Not if credit is tightened, no borrowing, no buying, no rising.

Rents will always go up...Rents will always stay low, why rent if rents become higher than an IO loan.

[ebob]

BTL is brilliant because:

1) You can borrow the money so easily - and you can get your deposit by re-mortgaging your existing house, so you don't even need any money to start.

This has been the case for the past 15 years or so, but is more difficult now, given the slowdown in HPI

2) House prices only ever go up

Have done for the past 15 years. I cannot predict the future, so will refrain from making a fool of myself.

3) Rents will always cover mortgage payments. Especially with this great 2-year fixed deal obtained at 3.5%, which can of course be repeated when this one finishes.

For the past 15 years, one merely needed to buy to let to lose money on monthly cashflow. Stratospheric capital growth rewarded this suicidal strategy.

4) Tenants are easy to find. The world is full of people dying to rent

They are in the South East.

5) Tenants are never late with their money. If they are, they can be turfed out immediately. And immediately replaced with somebody else - probably at a slightly higher rent

Refer to answer 4

6) Property never degrades or requires repairs. Ever.

New properties do not require major maintenance for a few years, older properties do, but a reasonable team of Polish builders will avoid the need to pay for your British builders Porsche.

7) Property can be dumped quickly. All you have to do is phone up the estate agent and they can find you a buyer. You can probably bank your profits within 2 months.

This has been the case for the past few years, but becoming more difficult recently

8) Landlords are raking it in hand over fist from tenants. Always have, always will

They are in London and numerous places in the South East

9) You can further increase your portfolio of properties without any further investment of your own money, as soon as prices have gone up, you can simply re-mortgage to get the deposit for the next one. Based on 15% growth per year, this means you can double your portfolio every year. The money's always there.

Possibly in certain parts of the South East

10) By increasing your portfolio, you are spreading your risk.

This is one benefit of increasing your portfolio.

It's not like the stock market where you can lose a fortune over-night and have to use real money. Your own money.

No, you can still lose all of your own property related capital without the added expense of paying some Kunt in the city to lose your equity invested capital

So, yes, a BTLer is in total control. King of all they survey. Properdee miw-yon-ayres.

Evidently

Scared, I have been a bear for maybe near a decade. I now feel such a fool. Others have made fortunes in the meantime. London is becoming a global trade hub (like it or lump it, the little England mentality is not adopted by the incumbent nor successive governments), something will come along as it always does do, to push the prices even higher than conceivable.

Ebob, An educated fool

[huw]

BTL has been made to look rather easy. TV shows tell you how to do it, and banks develop tailored finance and explain everything you need to do (aka selling their product). In the meantime, people keep telling each other how well it's all working out for them ... no wonder the financially illiterate have jumped on board and believe (so far) that they are in control.

The sophisticated investor, of course, puts his money in a hedge fund

[Guest tbatst2000]

The only thing I can see they have is the illusion of control. An illusion that has been largely created by a 10 year long bull market in property.

The illusion is that, if things aren't going right, you might plausibly be able to do something about it - e.g. manage the propery yourself, change agent, decorate the place, lower the rent to get it let quickly etc. The illusion has been supported by the bull market though and will change come the crash. I got chucked out of a rented house in 92 when the landlord sold it after losing 30 thousand, he told me he was selling because he wanted better control over what money was left IIRC.

[Gone baby gone]

Scared, I have been a bear for maybe near a decade. I now feel such a fool. Others have made fortunes in the meantime. London is becoming a global trade hub (like it or lump it, the little England mentality is not adopted by the incumbent nor successive governments), something will come along as it always does do, to push the prices even higher than conceivable.

Ebob, An educated fool

Ebob, unless you want to continue to feel like a fool for another decade, now is probably not the time to switch from being a property bear to a property bull...

[ebob]

Ebob, unless you want to continue to feel like a fool for another decade, now is probably not the time to switch from being a property bear to a property bull...

Red, I probably will be a fool for the rest of my life in many different aspects of it. However, I no longer underestimate the will of the authorities to continue printing money. Furthermore, the FED was in a quagmire, kill the dollar (the empire) by lowering interest rates or kill the consumer by increasing rates. My initial observation of the bear analysis was that the FED would never sacrifice the empire (the dollar) for the pathetic masses (the consumer), by lowering interest rates.

I have recently come to the conclusion that the FED is doing just that, lowing interest rates and controlling the descent of the dollar. Events of the past few days only confirm my suspicions.

This is the start of the end of American Hegemony.

If you were the President of the Bank of China, sitting on say $1Trillion of reserves and the idiots in charge of the Banana republic economy (the US FED) devalued the dollar & lowered interest rates, you would be in a lose-lose situation and start dumping the turd (the dollar).

Hence the hop over the fence to a field of cautious bulls regarding property prices; as the only driver for HPI is low interest rates and they are here to stay, courtesy of the statements and actions of the current Roman Emporer; the US FED.

Keep Smiling. Ebob

[SqueezePlay]

Red, I probably will be a fool for the rest of my life in many different aspects of it. However, I no longer underestimate the will of the authorities to continue printing money. Furthermore, the FED was in a quagmire, kill the dollar (the empire) by lowering interest rates or kill the consumer by increasing rates. My initial observation of the bear analysis was that the FED would never sacrifice the empire (the dollar) for the pathetic masses (the consumer), by lowering interest rates.

I have recently come to the conclusion that the FED is doing just that, lowing interest rates and controlling the descent of the dollar. Events of the past few days only confirm my suspicions.

This is the start of the end of American Hegemony.

If you were the President of the Bank of China, sitting on say $1Trillion of reserves and the idiots in charge of the Banana republic economy (the US FED) devalued the dollar & lowered interest rates, you would be in a lose-lose situation and start dumping the turd (the dollar).

Hence the hop over the fence to a field of cautious bulls regarding property prices; as the only driver for HPI is low interest rates and they are here to stay, courtesy of the statements and actions of the current Roman Emporer; the US FED.

Keep Smiling. Ebob

The US lacks the will power to take on the folks holed up in the mountains of Borrow Borrow. The nuclear option of raising interest rates being perceived as causing too much damage.

Thus they will turn to face another foe, claiming they are searching for weapons on credit destruction. This will be a messy conflict and will confuse the public who believed this battle had been fought and won a decade ago. The feds will find themselves surrounded by a multitude of different forces and with weak allies - and they will never have a clear strategy to achieve their desired outcome. Be prepared for many declarations of victory as they head ever deeper into the quagmire.

Hostory will certainly remember the presidency of George W...