Saturday, November 3, 2007
BTL is now a long term investment; who’d have thunk it
ARLA have published a guide on buy to let, here's a snippet that caught the Firstrung teams' eye, given that most buy to let investors do not and cannot make this business model work;"Buy to Let is a medium to long-term investment, typically 15-20 years, and it is an investment that takes account of both capital appreciation and rental income." For every 100K borrowed (at on average 7% on an interest only buy to let mortgage) the buy to let landlord needs to re-coup £700 per month in rent, not allowing for repairs renewals and voids, to simply break even. This is for the most part an impossible goal. Firstrung stands by its statement in 2006, that buy to let broke as a business model when individual BTL rates reached 5%.