oh dear: Thinking of buy-to-let? Do the sums

[shaunbhoy]

1000 euros a month of profit does not sound extremely attractive given potential risk.

Remind us alexei. How much "profit" do you make from the rent you pay each month?
And why are you worrying about the pros and cons of owning a 2nd property when you have yet to show the good sense needed to buy your first?

[AtW]

Thanks to rent I live in a better place than I could have afforded if I tried to buy one, also I have no risk of negative equity something that allows me to focus on long term things rather than do all kind of crap jobs in order to pay off the bank.

[Jabberwocky]

Remind us alexei. How much "profit" do you make from the rent you pay each month?
And why are you worrying about the pros and cons of owning a 2nd property when you have yet to show the good sense needed to buy your first?

pownd of bananas please mate, luvverly day innit ?

[Shimano105]

I find I actually agree with aTw on this - I'm sure that this is only a "blip" however.

I own a house but did so by buying at the right time (and selling the old one at the wrong time!) - however it is paid for now.

But this brainwashing over owning property is quite disturbing, no doubt fuelled by Beeny's norks sending out subliminal messages.

It used to be one house, but now it's becoming a minimum of 2 or you're in danger of missing out.

No, renting is beginning to make sense as an option, leaving you free to enjoy your money rather than being a wage slave.

Ah for the days when a house was just a place to live and you could afford to purchase one where you fancied...

[Paddy]

Have you been to Nottingham or are you talking out of your

Nottingham is one of the best places I've contracted, and far safer than most of the South East

I’ve just finished four months in Nottingham, I found it far worse than anyone described. Full of drunken louts, sick on the pavements, murder and crime in the news every day. The City is about the messiest and dirtiest I’ve seen.

I wanted to rent a flat but those available were highly overprices due to the student population and so I found it cheaper to stay in a hotel. Even when I was on the top floor of the Hotel , at night I could hear the drunks shouting and fighting. What a city, never again. "Nottingham, the Ass-hole of England”

[shaunbhoy]

pownd of bananas please mate, luvverly day innit ?

Fingers like lightning, but little else to accompany it eh JW? I see they have yet to fix your "Relevance Filter"!

[Ardesco]

Well we moved out of our flat and bought a house and are now getting £725/month for the flat (minus the usual agents fees depretiation etc.) but the mortgage is going to be costing us around the £550 mark.

Now bearing in mind you can get a better rate if you are not on a BTL mortgage you could probably get a mortgage for our flat fro about £500/month.

With this in mind surely it is better to buy a property than rent it? In 25 years it will belong to you and you will save £500 a month as well as benefitting from the value of the house that you now completely own.

In my opinion buying is definetly the way to go if you are looking at it long term.

[AtW]

Ardesco - is your morgage on a permanently fixed rate? You will not be able to pass BoE rate increases onto your customers, and you can't expect whole house to be occupier 100% of the time, so even if its just 1 month out of market, then you looking at much narrow profit margin. In face if your house is empty 3 months in a year then you won't make any profit, and if rate increases will continue (which they will) then you are very close to be unprofitable.

25 years is a very long time and a lot of stuff will happen - it is not given that the house will actually be yours at the end, most likely you will get heart attack at the news that your wife won lottery and divorcing you.

[GreenerGrass]

Thanks to rent I live in a better place than I could have afforded if I tried to buy one, also I have no risk of negative equity something that allows me to focus on long term things rather than do all kind of crap jobs in order to pay off the bank.

This is an interesting article AtW and you were right to post it, but don't let that kind of fear mentality rule you forever.
Its tragic seeing aging couples living in rented/council housing all their lives because they were too scared to take on a 40k mortgage then get evicted from a house worth 200k+ because they can no longer afford the rent, which has continued to rise over all that time. Meanwhile had they taken out that mortgage they would own it outright.
The worry of negative equity turns into a worry of being homeless (or living in a council home for the elderly) and having absolutely nothing to show for a lifetime of work. They might as well have never worked and just dossed all their lives. I've seen this happen a couple of times and feel gutted for them.

expat, I think the majority of BTLer's have interest only mortgages so if there is no capital gain they won't be left with a free property in 25 years time, they'll be forced to sell to clear the principal and have nothing.
Most people could not afford to have more than 1 BTL repayment mortgage as they'd be making a net loss, at least for a few years, and capital repayment is not a tax-deductable expense (unlike interest).
10 years down the line though, yes they'd be laughing. And I think theres no way prices will ever be less or the same as they are now in 25 yrs time.

Even if there is a slump in about 3-5 years time, eventually inflation will drag up affordability again, and many BTL'ers will be reluctant to sell up and realise a loss if they have tenants at least covering the mortgage.
I think there is still money to be made in BTL over the longer term but only if you buy the right house at the right price in the first place.
I'm dubious on these off plan flats though, unless they are very heavily discounted (and even if they are the RRPs seem to be hopelessly optimistic).
I mean who the **** wants to spend quarter of a million on a flat in somewhere like Ilford.

[Phoenix]

I am not complaining however - the more people foolishly buy to let, the better supply of properties for renters like me.

AH I understand! You are a bitter and twisted tenant.
Nothing in this world is certain....other than AtW talking about a subject he can only guess at..........