BTL - You can't go wrong!

[Bagpuss]

Buying a converted mill in Bradford what the hell would you expect?

I still say London if you can afford; highly rentable places like Fulham will go down very well as long as you can ride the waves.

In fact H&F average asking price moved up around 3.5% in Feb.

P

A two bed in Hammersmith & Fulham circa 350 a week rent so approx £18200 a year

ave price around 350k for a 2 bed flat

=5.3 % rent/purchase

cheapest BTL mortgage is at least that amount. Take off service charges, management fees and repairs and you make a serious loss. Next year the same flats will be 10-20% cheaper , so only a fool would buy now and rent out at a loss

[sasguru]

A two bed in Hammersmith & Fulham circa 350 a week rent so approx £18200 a year

ave price around 350k for a 2 bed flat

=5.3 % rent/purchase

cheapest BTL mortgage is at least that amount. Take off service charges, management fees and repairs and you make a serious loss. Next year the same flats will be 10-20% cheaper , so only a fool would buy now and rent out at a loss

Too many assumptions there. In London at least, you don't buy new builds (too high service and mangement charges and no character). Period properties in good nick and in good areas will fall much less than others in the country.
Plus any wise BTL'er has a stash of cash and will put down a sizable deposit. So in the long run (25 years) its still a good investment.
Golden rule: If the rent covers the mortgage, including repairs, voids and other costs, you cant go wrong - in 25 years you will have a fully paid for property worth a substantial amount with no huge effort on your part.

[Bagpuss]

For my example I picked the crab-tree estate, a nice area around Fulham's football ground a 2 bed victorian/edwardian flat rents for around £330-£350 per week and costs 350k plus. Those figures don't stack up as BTL unless you subsidize the rent or you buy outright and gamble on house price inflation with a very poor yield in the meantime. These flats will see sub 300k again, at that point I might even be interested myself.

[sasguru]

Agree yields are poor at the mo. But where else to park your money so your capital is preserved? Where else is a guaranteed investment in 25 years? The UK property market is a good bet in the long run - just look at a chart of house prices over the last 100 years. I wouldn't look at the stock market, gold, commodities etc (in spite of DP's fantasy world recommendations).

[Bagpuss]

Of course you are right about long term but anyone investing now is stupid, when a dip is inevitable during the oncoming recession. Buy at maximum pessimism as they say, and we aren't at that point yet. The city money is going to dry up short term and the non doms are leaving, the only way is down short term, 12-18 months should see some 'bargains'

[sasguru]

Of course you are right about long term but anyone investing now is stupid, when a dip is inevitable during the oncoming recession. Buy at maximum pessimism as they say, and we aren't at that point yet. The city money is going to dry up short term and the non doms are leaving, the only way is down short term, 12-18 months should see some 'bargains'

Hmmm. Rather have money in a property than in a bank the way things are going. In a bank your money is only a series of digital dots, in a good property it's where someone will want to live eventually. Actually I exited the BTL market last year - don't know what to do know.

[Peter Loew]

Bagpuss where are you getting your figures?

A 1 bedder raised ground floor 2 mins away from H&F station goes at around 390k. Granted they're period conversions prob converted around 1800s or so but the location is top and the flats have a lot of character that appeal to the higher classes of the area:

http://www.foxtons.co.uk/search?bedr...it_type=search

These kinds of properties won't see much decrease IMO, at best for the next year or two they'll be pretty much stable or perhaps sway slightly from their current value but as med - long term, you can only win.

[Peter Loew]

Hmmm. Rather have money in a property than in a bank the way things are going. In a bank your money is only a series of digital dots, in a good property it's where someone will want to live eventually. Actually I exited the BTL market last year - don't know what to do know.

I agree, but decide fast because lenders are pulling deals big time. I have broker friends who have been busy chasing red herrings when it comes to lenders. Gone are the days of 95% LTVs, and whatever happens you need that initial bulk of capital in securing any kind of mortgage, but prob less so with BTL; securing mortgages will only get harder for the next year or two.

So long as you can ride the waves you will win.

[Bagpuss]

Bagpuss where are you getting your figures?

A 1 bedder raised ground floor 2 mins away from H&F station goes at around 390k. Granted they're period conversions prob converted around 1800s or so but the location is top and the flats have a lot of character that appeal to the higher classes of the area:

http://www.foxtons.co.uk/search?bedr...it_type=search



These kinds of properties won't see much decrease IMO, at best for the next year or two they'll be pretty much stable or perhaps sway slightly from their current value but as med - long term, you can only win.

I thought that area close to the station is not so nice, the queen caroline estate is near there, a bit of a crime hotspot. 400k for a 1 bed is far too much, especially when a 2 bed house in fulham went for 500k last month at auction

[sasguru]

Agree, Fulham is not my favourite area - too many council estates there. I've only had trouble twice in my life walking the streets in London: once in Fulham, once in Camden