Buy to let DOOM

[WTFH]

Just keep borrowing and keep buying.

The problem with borrowing is the repayment side of it.


Minimize your borrowing before buying.

[MrMarkyMark]

The problem with borrowing is the repayment side of it.


Minimize your borrowing before buying.

MF says its fine. Therefore, you don't know what you are talking about

[DimPrawn]

Even better as it goes up and up, you can borrow more money, against it, for fast cars and lavish holidays.

What could go wrong

Nothing, it's brilliant. If anything goes wrong, bail out the banks and add the trillions to the national debt. Mauve Monkey and his generation can then pay it all off at their leisure.

[ChimpMaster]

Why would you sell when the price can only go up?

This is the question I've been asking myself lately. House prices only ever go up, so by all means buy another (bigger) house, but don't for god's sake sell the current one, it's better than a gold mine. Just keep borrowing and keep buying.

Even better as it goes up and up, you can borrow more money, against it, for fast cars and lavish holidays.

What could go wrong

You can't keep borrowing over and over: you can normally only borrow up to the price you paid for the property. And anyway, Osborne's tax rape makes high LTV rentals a far less attractive proposition from next year onwards.

So I have a change in strategy since the finance bill introduced the removal of mortgage interest relief. I'll still be in BTLs but these will be much lower LTV so as to negate much of the impact of the tax changes, and will provide a solid base of income allowing me to focus on other things. Things like flips, which we are beginning this year and commercial (office) to resi conversions, which is the next big step I need to take.

We have use the contractor Co funds to buy property outright for the first flip, by way of a director's loan at 3%, repayable by Jan 2017.

As to the actual sale of aforementioned house, this is in an area where prices are up 20%+ over the past 12 months - I bought a year ago, but prices have doubled in the area in the past 6 years. I think the market will stagnate here over the next few years due to affordability and investment concerns. I'm gutted to sell in one way, because the property is cash flowing net profit £1k/month (interest only at 70% LTV), but I'm happy to get the capital gain out (yes liable to CGT), and overall it works out at a 90% profit on the initial deposit.

No one knows what'll happen next, but the property market is not immune to global events so it's entirely possible that contagion from 2008 is returning with a jolt on the stock and commodity markets, which could feed through to property too. The only saving grace is that interest rates won't rise for a while yet. Might be best not to have all your eggs in one basket though.

[MrMarkyMark]

Nothing, it's brilliant. If anything goes wrong, bail out the banks and add the trillions to the national debt. Mauve Monkey and his generation can then pay it all off at their leisure.

So, its not the fault of the boomers, as he always states, but, the sons and daughters of the boomers.

i.e. Us

[DimPrawn]

So, its not the fault of the boomers, as he always states, but, the sons and daughters of the boomers.

i.e. Us

I would say Generation X are the property rampers, speculators and BTLer's on the whole.

Boomers are either dead or choosing their care homes.

[MrMarkyMark]

I would say Generation X are the property rampers, speculators and BTLer's on the whole.

Boomers are either dead or choosing their care homes.

So, he has actually been wrong, about boomers, all along and his many, posted, charts are total bull tulip, as previously suspected.

[LondonManc]

I would say Generation X are the property rampers, speculators and BTLer's on the whole.

Boomers are either dead or choosing their care homes.

It's not even that. It's the successive governments shafting the pensions market meaning that those who can are hedging their bets by putting money into property as well.

[BrilloPad]

It's not even that. It's the successive governments shafting the pensions market meaning that those who can are hedging their bets by putting money into property as well.

The pension pots have just been made available. To try to pump money into a f**ked economy.

Alas some boomers, unhappy with only 10 BTLs (and hence only f**king over 10 young people) are so greedy they want more more more.

Can't we just shoot anyone with a second property?

[ChimpMaster]

You can't keep borrowing over and over: you can normally only borrow up to the price you paid for the property. And anyway, Osborne's tax rape makes high LTV rentals a far less attractive proposition from next year onwards.

So I have a change in strategy since the finance bill introduced the removal of mortgage interest relief. I'll still be in BTLs but these will be much lower LTV so as to negate much of the impact of the tax changes, and will provide a solid base of income allowing me to focus on other things. Things like flips, which we are beginning this year and commercial (office) to resi conversions, which is the next big step I need to take.

We have use the contractor Co funds to buy property outright for the first flip, by way of a director's loan at 3%, repayable by Jan 2017.

As to the actual sale of aforementioned house, this is in an area where prices are up 20%+ over the past 12 months - I bought a year ago, but prices have doubled in the area in the past 6 years. I think the market will stagnate here over the next few years due to affordability and investment concerns. I'm gutted to sell in one way, because the property is cash flowing net profit £1k/month (interest only at 70% LTV), but I'm happy to get the capital gain out (yes liable to CGT), and overall it works out at a 90% profit on the initial deposit.

No one knows what'll happen next, but the property market is not immune to global events so it's entirely possible that contagion from 2008 is returning with a jolt on the stock and commodity markets, which could feed through to property too. The only saving grace is that interest rates won't rise for a while yet. Might be best not to have all your eggs in one basket though.

Quick update: open day with 10 viewings resulted in 2 offers, one at asking price and another at £10k over asking.

The first offer was from someone who wanted to live there and the second (higher) offer is from an investor - Purple G's favourite sort: a young person who is being helped and guided by BOMAD.

Early days for the sale process but the investor looks to be winning because, aside from the money, he wants to complete before April (which helps me) and wants to keep the current tenant (which helps me even more).

I really do have empathy for the first guy though; he's lost out on a number of properties because he keeps getting outbid.