Reply to: Daily Boom

[Freamon]

And a million immigrants arriving every year and about 50,000 houses being built, means rents are going to rise, where as interest rates cannot rise otherwise all the lenders will be bankrupt again, which will mean massive bailouts again, so the money would have to be printed, stoking inflation which means rents go up.

Whichever way it plays out, the BTLers are millionaires for doing nowt and nothing can ever touch them.

Presumably there's some reason why over the last 10 years, despite "immigrants flooding in"*, rents have fallen in real terms?

*source: Daily Mail

[Freamon]

@Freamon, I don't mean to be cynical but money in the bank is wasted opportunity. My dad left his life savings in the bank throughout the property boom, when instead he could have bought 5 houses (almost cash buy at that time) bringing in £5,000 a month rental income!

There was a small hint of sarcasm in my post, but to spell it out slightly less cryptically - if all you have is a hammer, every problem looks like a nail.

[ChimpMaster]

The problem with £1500 (esp. before tax & expense) is that it takes a long time to build a deposit for the next house. Then again, she might be buying houses in Bradford at £50k a pop and renting them out for £450/month -- in which case she can buy one a year.

@Freamon, I don't mean to be cynical but money in the bank is wasted opportunity. My dad left his life savings in the bank throughout the property boom, when instead he could have bought 5 houses (almost cash buy at that time) bringing in £5,000 a month rental income!

Yes, there's risk involved but you have to take some chances in life to further yourself and for your family. By 'eck there's risk in leaving money in the bank these days!

[DimPrawn]

And a million immigrants arriving every year and about 50,000 houses being built, means rents are going to rise, where as interest rates cannot rise otherwise all the lenders will be bankrupt again, which will mean massive bailouts again, so the money would have to be printed, stoking inflation which means rents go up.

Whichever way it plays out, the BTLers are millionaires for doing nowt and nothing can ever touch them.

[Freamon]

She'll just put the rents up. Tenants have to live somewhere and if they can't pay the rent the taxpayer pays it with benefits.

How generous of her to currently be renting out all 8 of her BTLs at a below market rent. Who says the charitable spirit is dead?

[DimPrawn]

So assuming these 8 are all around the UK average house price of roughly £150k, it would take a 1.5% rise in interest rates to wipe out her monthly income entirely.

She'll just put the rents up. Tenants have to live somewhere and if they can't pay the rent the taxpayer pays it with benefits.

[Freamon]

So you leave your money in the bank, do you?

Yeah because obviously if you're not into BTL, this is the only other option.

[Freamon]

My Sister-in-law has 8 BTL properties. The difference between the rent and the mortgage payments is £1500 a month, which she is saving to put down on another BTL property and then rinse and repeat.

So assuming these 8 are all around the UK average house price of roughly £150k, it would take a 1.5% rise in interest rates to wipe out her monthly income entirely.

[ChimpMaster]

FTFY.

So you leave your money in the bank, do you?

[DimPrawn]

Less business-savvy people forget the notion that assets aren't always - or only - about capital growth. The reason why BTLs, for example, are a popular asset class is that you can buy a large asset with little down, i.e. leverage, and then use rental income to pay for that asset over time.

Regardless of whether the property value goes up much (though historically it is proven to go up), your asset will eventually be paid for mainly by someone else.

Alternatively, put a small downpayment, leverage up and pocket the difference between rental income and interest-only mortgage repayments. Do that several times over and you have built up investment income for yourself. Just make sure your mortgage payments are covered, by not stretching too far and also by planning for interest rate rises.

My Sister-in-law has 8 BTL properties. The difference between the rent and the mortgage payments is £1500 a month, which she is saving to put down on another BTL property and then rinse and repeat. By the time she retires, regardless of capital growth the income from the rents will pay a handsome monthly income.

With the west truly forked, interest rates will be zero (or more likely negative with extreme money printing) for decades. This will stoke inflation and rents rise with inflation, so she'll have maybe 20 properties costing nowt in mortgage payments but the rents will be astronomical.

Free money courtesy of idiots like savers, workers and tax-payers.

[OwlHoot]

rubbish. 10 years of depression. 5 years of ww3. 25 years to forget the lessons. I make that 40 years?

minutes

So by my reckoning 35 years.

[Freamon]

Just make sure your mortgage payments are covered, by not stretching too far and also by planning for interest rate rises, voids, maintenance costs, agency fees, building management company service charges, ground rent...

FTFY.

[ChimpMaster]

i cannot remember not quite as short has that but probably about 8/9 months then it was back to its usual 8%

regardless the issues were still the same risk of unemployment, social unrest, wider economic issues

Less business-savvy people forget the notion that assets aren't always - or only - about capital growth. The reason why BTLs, for example, are a popular asset class is that you can buy a large asset with little down, i.e. leverage, and then use rental income to pay for that asset over time.

Regardless of whether the property value goes up much (though historically it is proven to go up), your asset will eventually be paid for mainly by someone else.

Alternatively, put a small downpayment, leverage up and pocket the difference between rental income and interest-only mortgage repayments. Do that several times over and you have built up investment income for yourself. Just make sure your mortgage payments are covered, by not stretching too far and also by planning for interest rate rises.

[Support Monkey]

Yes a very short time, a couple of days wasn't it.

i cannot remember not quite as short has that but probably about 8/9 months then it was back to its usual 8%

regardless the issues were still the same risk of unemployment, social unrest, wider economic issues

[Scrag Meister]

Its very unlikely to go to 15% again but regardless the signs are all the same as the last time, it was only 15% for a short time it then came down but they still stagnated for 10 years before there was any real movment, its good if you can fill your boots with Buy to let but you need to be in it for the long haul if you want to profit from selling

Yes a very short time, a couple of days wasn't it.