Best area to invest

[arthurseaton 10]

Checked on rightmove today and saw SIX new listings of btl student properties around Hunters Bar and Sharrow Vale. All listed today. Obviously an over leveraged borrow to letter running for the exit. Hope he sells them quick. Wouldn't want to be paying for the mortgage on six empty properties. Oh well, judging by some of the responses in the thread he won't be short of greater fools willing to take them off his hands. With interest rates rising today and the London and South East market tanking it looks like it won't be long before we find out who's going to be left holding the baby. (Gulp!)

[ez8004 10]

Is there any money to be made in BTL at the moment, I seriously doubt it.

 

You Buy to Let without a mortgage. Bunch of amateurs.

[Cyclone 10]

That doesn't guarantee profit to be made and of course there is the opportunity cost, you could have invested that money elsewhere.

[arthurseaton 10]

You Buy to Let without a mortgage. Bunch of amateurs.

 

BTL also refers to borrow to let.

 

With today's news that the BOE have made plans for house prices to fall 30% in the event of a no deal brexit and possibility of said no deal being uncomfortably high it would appear those buying with no mortgage would only lose 30% of their equity. Not the wisest investment to have made recently I would say. Of course everything could all work out for the best

[Hippogriff 10]

Equity is merely notional until realised. Rent is tangible, it keeps on coming in, every month (generally speaking). If you are a Landlord then you are a Landlord, not an equity-better - that's just - typically - a bonus. If the environment changes in the way feared, then it will not mean everyone is suddenly ceasing to rent, and buying. Some will. Many will be stuck (just as they are today).

 

"Borrow to Let" is not a generally accepted abbreviation of BTL; you've just gone and made that up because it suits your own prejudices. Everyone knows, and accepts, that BTL means "Buy to Let" - whether that's via a mortgage or not doesn't change the abbreviation just because you think it allows criticism of the overall approach. There's bad debt and good debt - it's not as black-and-white as all debt is bad. Mortgage debt is certainly on the better side.

[Cyclone 10]

With today's news that the BOE have made plans for house prices to fall 30% in the event of a no deal brexit

 

I can't find any reference to this in the news, what's the source?

[arthurseaton 10]

I can't find any reference to this in the news, what's the source?

 

Carney mentioned it in his speech this morning. Also mentioned interset rates going up to 4% and 9% unemployment. He could of course be wrong. But in a thread entitled best area to invest I would hope the op factors this information into his investment decision.

 

---------- Post added 03-08-2018 at 10:33 ----------

 

Equity is merely notional until realised. Rent is tangible, it keeps on coming in, every month (generally speaking). If you are a Landlord then you are a Landlord, not an equity-better - that's just - typically - a bonus. If the environment changes in the way feared, then it will not mean everyone is suddenly ceasing to rent, and buying. Some will. Many will be stuck (just as they are today).

 

"Borrow to Let" is not a generally accepted abbreviation of BTL; you've just gone and made that up because it suits your own prejudices. Everyone knows, and accepts, that BTL means "Buy to Let" - whether that's via a mortgage or not doesn't change the abbreviation just because you think it allows criticism of the overall approach. There's bad debt and good debt - it's not as black-and-white as all debt is bad. Mortgage debt is certainly on the better side.

 

You are commenting from the position of an established landlord who could have bought property at maybe a quarter of current value. As such your argument is valid. It's a viewpoint I would hold if I were you. I'd have no choice! The thread , however, concerns a prospective new investor. Wether or not they are cash buyers or are thinking of borrowing a percentage is immaterial. They risk losing a third of their investment if they proceed. To imply that doing so is anything but a huge and potentially disatrous financial risk is I think disingenuous. I wouldnt think the few grand in rent they receive over the next few years would provide much comfort do you?

[Hippogriff 10]

Risking 30% isn't bad. Go play the stock market instead, right? The risk there is 100%... or is it more? While I am talking about my position as a Landlord for a few years, I have still purchased property in the last year (2018 ) and each one stands on its own. There is no funny accounting like in big business where losses in one division offset against profits in another. A property must work, and that's not unreasonable - I am simply saying to the OP that it can work.

 

Personally, for me, that has meant if a property has a mortgage (and only a few do) then it will be a repayment mortgage, not interest-only, and the rent coming in needs to be £200 more than the mortgage payment going out. For a real-world example, a mortgage payment of £366 today is balanced against a rent of £640. Now, a few years ago that used to be a rent of £570 (the £200) but my mortgage is fixed for 5 years, whereas the rent isn't, so your position improves [modestly] over time. If you think medium term (5 years is more than short term in my view) then it's easy enough. If you think long term then it's really easy because capital appreciation cycles certainly exist and you can choose the right exit opportunity to make things tangible (if you are beholden to time, then you can come a cropper).

[Cyclone 10]

I don't want to make an attack on Hippo, but any suggestion that investing in BTL is a bad idea NOW seems to be taken as a personal insult and as a comment that he made a mistake investing however many years ago.

[Hippogriff 10]

It's just the numbers, that's all; numbers based on reality is all. Eeyores will say it can't ever work... and no, not just today. I suppose - musing on this - if the world comes close to some kind of end with what Carney talks about, then the opportunity might be even greater shortly. For now, it can work.

Edited August 3, 2018 by Hippogriff
Added musing

[arthurseaton 10]

I hope the op takes note that the only investment you choose to compare that could possibly be worse than investing in property right now is the stock market where losses can in theory be 100%. Investing in property is safer than investing in a single high risk no portfolio gamble on the stock market you say? Sounds a safe investment. Where do I sign up?

 

---------- Post added 03-08-2018 at 11:36 ----------

 

Risking in 30 % isn't bad you say. Maybe when the risk is minimal. Is the risk minimal. Carney says it's a real possibility. Like I say, he could be wrong but he's already upping interestt rates so the anticipated 4% we'll be getting after a hard brexit doesn't come overnight so he's not just talking the talk.

[Cyclone 10]

Maybe it CAN work, but the numbers look terrible at the moment. There are much better investments available.