Ilikesunshine Posted March 23, 2013 Report Share Posted March 23, 2013 Hi I'm new to this site so please be gentle;-) I'm seriously thinking of buying a buy to let and I'm researching as much as possible. I want to ask if you consider it to be a worth while venture and if anyone has well behaved tenants that pay on time? All I've read about so far is non paying messers, or is this because you only hear about bad Tenant's? Link to comment Share on other sites More sharing options...
Richlist Posted March 23, 2013 Report Share Posted March 23, 2013 Hi......I like sunshine as well. I'm seriously thinking of buying a buy to let and I'm researching as much as possible. I want to ask if you consider it to be a worth while venture No......it will be a complete waste of your time & money. You are likely to make very little profit at todays prices. and if anyone has well behaved tenants that pay on time? All I've read about so far is non paying messers, or is this because you only hear about bad Tenant's? Yes we do......BUT we follow a process that reduces the risks ...... others are just lucky. You do tend to only hear about bad tenants. Link to comment Share on other sites More sharing options...
Ilikesunshine Posted March 23, 2013 Author Report Share Posted March 23, 2013 Hi Senior Thank you for your reply! I'm even more confused now! ( easily done I know) if it a complete waste of time why are you doing it? I do intend to follow the processes that will hopefully allow me to have good tenant's but there is so much negativity around the research I've done so far. On average how many times have you had to inforce a section 21 on your property? Thank you for any advice you give- I want to get things right from the off so any advice would be much appreciated Link to comment Share on other sites More sharing options...
Richlist Posted March 23, 2013 Report Share Posted March 23, 2013 I'm even more confused now! ( easily done I know) if it a complete waste of time why are you doing it? 1. I bought most of my properties when prices were lower or paid well below market value. 2. I managed to get mortgages at 0.5% above bank base. You are likely to pay market value with a BTL mortgage at 4% +.......your net income is likely to be small to zero and you are unlikely.......like the rest of us......to see any increase in capital values. Find something else to spend your money on......you've missed the boat. On average how many times have you had to inforce a section 21 on your property? Never.......but my experience isn't the same as others because there are lots of variables. The type of property, its condition, its location, the type of tenant, your agents, your knowledge etc etc are all likely to contribute to your chance of having problems. Link to comment Share on other sites More sharing options...
Geezah Posted March 23, 2013 Report Share Posted March 23, 2013 Like any business, it depends on so many variables. It can be a good business to get into now, it can be a bad business. There is no one size fits all statement. Depends where you are and how you run it and what you want out of it. Basically, you need to speak to letting agents in the area where you want to buy, ask them what people want when they walk through the door, where they want it and what they are willing to pay. You need to listen to the market. Be wary of combined letting agents and estate agents, they may tell you anything to offload sticky properties onto you. Whereas a pure letting agent doesn't make any money unless he rents your property out, so is unlikely to give you bad info intentionally. Then, you need to look at selling prices of theses properties and work out how much money you can make, factoring in other variables like agents fees, insurance and mortgage fees etc. My clients are currently managing between 8 - 10% basic yields right now, compare this to the returns you get in savings accounts and it doesnt look too shabby. Link to comment Share on other sites More sharing options...
Ilikesunshine Posted March 23, 2013 Author Report Share Posted March 23, 2013 Thank you for the reply! I have done much research on the area Im looking to move in to, and have just in put in an offered on repossessed house. I'm waiting for a reply from the vendor.( a Bank) I am a cash buyer if need be and I've offered 40,000 bellow what the house next door sold for 2 years ago! So I'll hopefully make money if I decide to spin it around instead of letting! I own my own home without a mortgage and I'm sick of chasing a lousy 2.75 % on money I have in the bank! Sorry some background may make it easier to determine if this would be a viable option. I have in the past before the downturn renovated many properties. Link to comment Share on other sites More sharing options...
Richlist Posted March 23, 2013 Report Share Posted March 23, 2013 My clients are currently managing between 8 - 10% basic yields right now, compare this to the returns you get in savings accounts and it doesnt look too shabby. How are you calculating the yield ? Link to comment Share on other sites More sharing options...
Geezah Posted March 24, 2013 Report Share Posted March 24, 2013 I think there are websites in England where you can pay to get actual sold prices in your area as soon as they become available, so they should be able to give you an indication as to whether you are actually getting a bargain. Beware if you need a mortgage, because they will tie you in for the deal period which would mean you would have to pay onerous penaties if you want to sell before the deal period ends. Although on the flip side, borrowing money gives you leverage to grow. Basic yield, annual rental income divided by costs of purchase multiply x 100, What do you use? Link to comment Share on other sites More sharing options...
Richlist Posted March 24, 2013 Report Share Posted March 24, 2013 Basic yield, annual rental income divided by costs of purchase multiply x 100, ......and therein lies the problem...... Your yield calculation is a complete waste of time as it fails to take into account.... expenses, voids, income tax, operating costs etc etc etc. Its no good comparing your yield calculation with the returns from a savings account. You suggest a return of 8% to 10% ? Even using your method of calculation thats stretching the imagination way beyond reality. So I buy a flat for £100,000 and you are telling us that we will get between £666 and £833 per calender month......in your dreams. What do you use? Nothing. I already know that real returns from property in my local area, at todays market values, are VERY low. Unlike you, I don't try to pull the wool over the eyes of new and inexperienced entrants by telling them a pack of lies as to the returns they are likely to receive from letting property. You should be ashamed of yourself. Link to comment Share on other sites More sharing options...
Geezah Posted March 24, 2013 Report Share Posted March 24, 2013 Oh dear, I have really rattled your cage haven't I? Don't put words into my mouth, and try increasing your font as well as writing in bold, so that your assumptions stand out even more. You make so many of them that I'm not going to waste my time pointing them out to you. I'm sure that you've done your research and that yields are very low in your particular area. So, if the numbers don't work for you then don't buy, but don't assume that the same applies everywhere - it doesn't. I have sourced a property for a client who decided to buy for cash at £52,000, for which he gets a rent of £500/mth, seeing as you obviously know everything there is to know about making money in the current rental market, I'll leave you to work out whether my advice to him to buy it was sound or not. You don't have a clue how I work so don't go casting dispersions when you don't know what you are talking about, unlike your many other useful posts. Link to comment Share on other sites More sharing options...
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