Reply to: BTL - You can't go wrong!

[sasguru]

Defo, Hammersmith is dodgy as hell.

Only place I got mugged at knife-point was in Latimer Road once, near Shep. Bush. Coming out of the station and got stopped by two lovely muggers. Never had any probs in Fulham Broadway - love the cinema there but as I say it's changed so much over time and was dodgy as hell years ago.

Council houses are everywhere, and I do mean everywhere. The only London area I know of where there are hardly any is Gloucester Road area.

Few council houses in Sheen, Barnes, most parts of Ealing, Crouch End, Richmond. These are the some of the little "village" areas of London worth living in. Interestingly most are south of the river

[Peter Loew]

It's just the area from riverside studios into Hammersmith, dodgy as hell after dark, not safe for women to walk alone. I hear it's being regenerated though, hammersmith that is

Defo, Hammersmith is dodgy as hell.

Only place I got mugged at knife-point was in Latimer Road once, near Shep. Bush. Coming out of the station and got stopped by two lovely muggers. Never had any probs in Fulham Broadway - love the cinema there but as I say it's changed so much over time and was dodgy as hell years ago.

Council houses are everywhere, and I do mean everywhere. The only London area I know of where there are hardly any is Gloucester Road area.

[Bagpuss]

It's just the area from riverside studios into Hammersmith, dodgy as hell after dark, not safe for women to walk alone. I hear it's being regenerated though, hammersmith that is

[sasguru]

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.

I wouldn't take out a large mortgage for BTL anyway.

[Peter Loew]

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

Yeah I see what you're saying. That said there has been massive change in that area over the years and if you can find a property you can add value to, e.g. build another bedroom or extend the kitchen, you're in for a good med - long term ride especially in the lettings dept.

The flats and houses opposite the football ground (south side of Fulham Road) are gorgeous and make up the upper class of the area. It's these kinds of places plus any potential to add value, that I would look for if I was to buy now. Fulham Broadway is an interesting area because it's changed so much and Broadway is next door to chelsea, can't really go wrong there!

P

[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

[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

[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.

[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.

[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.

[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]

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]

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]

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]

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