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A Friend Just Got Into Btl In Cambridge

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Discovered yesterday that a friend of mine - great chap - has just got into BTL in Cambridge.

His business plan is to buy flats at auction do them up, let them, then sell them when he has made 20K so to avoid CGT (not sure how this works so didn't argue).

I asked about what he thought about the market in Cambridge and he said that there will always be demand for property in Cambridge so was confident that he would make money. I wanted to say that there is plenty of demand for Red Ferrari F40s but there is a reason you don't see them very often - but I kept quiet.

The most shocking thing of all was that the rest of my friends were hailing his entrepreneurial spirit and saying that they wish they had the money to get into BTL too. :o Does anyone read the papers? (or HPC! :P).

I fear that it is too late for my friend now - his first flat has just been let out. I fear the day that he has to admit that it was a big mistake.

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Discovered yesterday that a friend of mine - great chap - has just got into BTL in Cambridge.

His business plan is to buy flats at auction do them up, let them, then sell them when he has made 20K so to avoid CGT (not sure how this works so didn't argue).

I asked about what he thought about the market in Cambridge and he said that there will always be demand for property in Cambridge so was confident that he would make money. I wanted to say that there is plenty of demand for Red Ferrari F40s but there is a reason you don't see them very often - but I kept quiet.

The most shocking thing of all was that the rest of my friends were hailing his entrepreneurial spirit and saying that they wish they had the money to get into BTL too. :o Does anyone read the papers? (or HPC! :P).

I fear that it is too late for my friend now - his first flat has just been let out. I fear the day that he has to admit that it was a big mistake.

As long as he didn't overpay, he'll be fine. In the current market, I would be looking for 10% yield, so about 60k for a nice one bed flat :)

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Your friend has shown great innovation skills by coming up with this idea. Britains knowledge economy is surely envied by Germany and Japan.

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I fear that it is too late for my friend now - his first flat has just been let out. I fear the day that he has to admit that it was a big mistake.

BS. You dont fear it at all. You long for that day so you can say "I told you so and I am right".

That's what you long for.

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I go on a yearly holiday (long weekend) just before Christmas with a group of guys from Scotland (mainly Glasgow based), they are in their mid to late 40's, kids have gone to uni, they are well educated and ar starting to think about planning for their later years. One of them (only one thank God) has recently gone into BTL and bought 2 flats as an investment. I tried to tactfully ask him if this was a wise decision bearing in mind the market, of course he was having none of it (why would he?), anyway he spent the holiday on his mobile trying to sort out the heating in Flat number 1 whilst the tenant in Flat number 2 said he was a bit hard up and wasn't paying December's rent!

I'll ask him next holiday how his 'investment' is going!!

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All he had to do is read the mainstream press and gauge the situation with the economic reports to get an idea it may be a risky time to take on this sort of venture.

I am sorry but I have not an ounce of sympathy for your friend, he's likely already in NE and frankly is bloody naive falling into such a situation with so much information at his finger tips.

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Theres nowt wrong with BTL generally, if he's not over committed on mortgage payments and doesn't expect a return when selling within six years he'll be fine.

Its people that jump in to BTL, making £20 profit off the rental income because they had a measly deposit. That's not a business plan, its financial disaster.

But he's no entrepreneur.

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Discovered yesterday that a friend of mine - great chap - has just got into BTL in Cambridge.

His business plan is to buy flats at auction do them up, let them, then sell them when he has made 20K so to avoid CGT (not sure how this works so didn't argue).

I asked about what he thought about the market in Cambridge and he said that there will always be demand for property in Cambridge so was confident that he would make money. I wanted to say that there is plenty of demand for Red Ferrari F40s but there is a reason you don't see them very often - but I kept quiet.

The most shocking thing of all was that the rest of my friends were hailing his entrepreneurial spirit and saying that they wish they had the money to get into BTL too. :o Does anyone read the papers? (or HPC! :P).

I fear that it is too late for my friend now - his first flat has just been let out. I fear the day that he has to admit that it was a big mistake.

You have to look at BTL the same as shares in a large cap company. If you're buying with cash and the current yield is 6%, then the yield will hopefully grow in time and long term the nominal capital value is likely to increase. However, when you use leverage the whole dynamic changes. Add in the "do it up" variable, future finance costs, and the current market fits the profile of peak asset bubble. Not to mention tenant trouble, insurance and supply of new flats.

It's not a one way bet.

Personally I couldn't do BTL. It's a grubby business IMO.

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BS. You dont fear it at all. You long for that day so you can say "I told you so and I am right".

That's what you long for.

No its not the same for this friend. He has only just jumped into BTL so hasn't started bragging about the fact he has made money - and I wouldn't expect him to. As Abteilung points out - he seems to have got in to make provisions for later life and I know that he works with other BTLers so its no surprise.

For those friends who I have had to listen to for the past 3-4 years banging on about the money they are making by owning then your judgment is correct.

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Amazing that we don't appear to have had the "man in the street" change of sentiment. Sure there are indicators from MSM but its still quite conflicting.

Yet house prices are heading for a likely year on year nominal decline by April 08, wiping out those early 07 whopping m-o-m increases.

What will happen when the change of sentiment is properly imbedded in the public psyche? Can it be anything less than carnage?

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Amazing that we don't appear to have had the "man in the street" change of sentiment. Sure there are indicators from MSM but its still quite conflicting.

Yet house prices are heading for a likely year on year nominal decline by April 08, wiping out those early 07 whopping m-o-m increases.

What will happen when the change of sentiment is properly imbedded in the public psyche? Can it be anything less than carnage?

Exactly. My friend was saying that he will be selling them on when they have made 20K on each flat so to avoid CGT (Does anyone know what he means by this)

He would make sure that he got rid of it before it made any more money - amazing. More like losing more than 20K

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Guest An Bearin Bui
Exactly. My friend was saying that he will be selling them on when they have made 20K on each flat so to avoid CGT (Does anyone know what he means by this)

He would make sure that he got rid of it before it made any more money - amazing. More like losing more than 20K

That should be around 2015 then if we follow the 18-year property cycle with 2010 being the trough :lol::lol: I hope he's planning that far ahead and is in a recession-proof job.

Well, actually I don't - I hope he's an estate agent and has no savings and that CGT rules change in the meantime so he needs to make 100k to avoid CGT: we need more repossessions from "greater fools" like this so the market is freed up and not in a stand-off for years.

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Exactly. My friend was saying that he will be selling them on when they have made 20K on each flat so to avoid CGT (Does anyone know what he means by this)

Is he buying it joint with his partner or something? 2 peoples' combined CGT exempt amount is approx £20k

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I go on a yearly holiday (long weekend) just before Christmas with a group of guys from Scotland (mainly Glasgow based), they are in their mid to late 40's, kids have gone to uni, they are well educated and ar starting to think about planning for their later years. One of them (only one thank God) has recently gone into BTL and bought 2 flats as an investment. I tried to tactfully ask him if this was a wise decision bearing in mind the market, of course he was having none of it (why would he?), anyway he spent the holiday on his mobile trying to sort out the heating in Flat number 1 whilst the tenant in Flat number 2 said he was a bit hard up and wasn't paying December's rent!

I'll ask him next holiday how his 'investment' is going!!

The return on BTL is only "good" or "bad" when compared with an alternative investment.

I'll probably take early retirement in a couple of years at age 55, I've got a good company pension scheme, but I'd like to augment that with some additional investments. If I simply buy an annuity that's guaranteed to increase at say 5% per year then I'm only looking at about £3,500 per year for each £100k I invest.

If the @rse drops out of the housing market over the next few years it will be very tempting to pick up a few BTL properties for cash, I'd then be looking at say £5,000-6,000 per year for each £100k I invest, what's more the rents would probably keep increasing in line with earnings, plus there'd be something to leave the kids which certainly isn't the case with an annuity.

I agree that buying into BTL at the moment isn't a smart idea. But, because secure company pension schemes are pretty much dead and buried, it means the BTL cat isn't going back into the bag. When this crash is over I think there will be plenty of baby boomers with either cash or good credit ratings who will be taking a close look at BTL and seeing if the numbers add up. Maybe I'll be one of them.

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I asked about what he thought about the market in Cambridge and he said that there will always be demand for property in Cambridge so was confident that he would make money. I wanted to say that there is plenty of demand for Red Ferrari F40s but there is a reason you don't see them very often - but I kept quiet.

Of course there will always be demand for property in Cambridge , just as there will always be demand for property in every single town city and villlage in the UK. Its just that the demand is likely to be very low and far less than the supply thus bringing prices down. I keep hearing this line i.e there will always be demand for property in place X ... keep reading it too .. the Times property rag had a section devoted to places in the North that wouldn't crash because ' there will always be demand'. Seems to me to be teh next phase in the denial cycle i.e we have moved beyond the fact that a correction is occuring so now the denial goes along the lines of acknowledging that indisputable fact but believing that it won't happen here because 'there will always be demand here'.

I remember lookign for a house about 95 when prices were down a lot and still falling and the EAs kept saying ' yes there has been a correction but property around here always holds its value' ...yada yada yada.

Edited by Bearfacts

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I remember lookign for a house about 95 when prices were down a lot and still falling and the EAs kept saying ' yes there has been a correction but property around here always holds its value' ...yada yada yada.

Well, it seems they were right. Unless prices now fall below the 1995 value or even the 1987 value (which would have been higher than the 1995 value).

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I agree that buying into BTL at the moment isn't a smart idea. But, because secure company pension schemes are pretty much dead and buried, it means the BTL cat isn't going back into the bag. When this crash is over I think there will be plenty of baby boomers with either cash or good credit ratings who will be taking a close look at BTL and seeing if the numbers add up. Maybe I'll be one of them.

Yes and if the Brittish Peso keeps dropping it will be opportunistic for foreign investors to buy BTls' for cash.

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Is he buying it joint with his partner or something? 2 peoples' combined CGT exempt amount is approx £20k

yes that must be it. cheers

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Discovered yesterday that a friend of mine - great chap - has just got into BTL in Cambridge.

His business plan is to buy flats at auction do them up, let them, then sell them when he has made 20K so to avoid CGT (not sure how this works so didn't argue).

Good business plan in 2000 / 2001. It's kind of like deciding in September 1929 that there's still money to be made in the stock market.

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  • 292 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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