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Frank Hovis

BTL - would you?

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I confess that I would be under specific circumstances: namely I would buy my two neighbours' houses if they moved as it would mean that I could control who lived there.  Not their lives of course but it's an extremely quiet neighbourhood and I want it to stay that way.  Two more elderly couples either side who I would charge 75% / 80% of market rent so they wouldn't move - job done.

In general - I wouldn't touch it with a bargepole because I don't want the hasssle; I know one bloke who drove 160 miles each way to sort "an electrical problem" only to find out the lightbulb needed changing.

Financially?  Well it's better than cash deposits at the moment but how long it will stay like that is anybody's guess.  That the Fed has already raised rates twice suggests that having a weak currency through low interest rates will just stoke inflation and force very high interest rates at short notice on any central bank found to be sitting on its hands.

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My opinion is that the type of people who buy to let only do so to show off.

I can't really make a good case for getting into it,low yields,saturated market,nightmare tenants etc.

I would rather buy an equity fund that paid a dividend each month.

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Funnily enough the two workmates who've had BTLs (one each) both rarely mentioned them and when they did it was a moan.

They have both sold them now, one said he'd lost money on it and I got the impression the other had as as well.

It only works IMO if you go into it big time and make it your job.

Like you I am happier with equities because they have given me a cracking return over the years and have never phoned me up on a weekend to tell me that their boiler has packed in.

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Not a chance.

Seems totally bonkers to me. An illiquid leveraged asset, where you're relying on people you don't know to cover the payments, who can call you up any hour of the day to sort something out for them. Or you have to pay someone else to do that for you, reducing your yield.

I'm quite happy with my S&S ISA thanks.

[EDIT] I don't know anyone who does BTL who doesn't complain about it. Sounds too much like hard work to me.

Edited by Inoperational Bumblebee

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A work chum had 3 BTL flats. First one got trashed by the first tenant, which must have been nuisance. I think he is a good landlord, as he makes sure everything works, and doesn't up the rent, as he would rather have some rent than none. As the tenants move out, he's now selling them up.

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I did look into the possibility of becoming a student landlord. In my opinion students are probably one of the few members of society who actually want to rent rather than buy. So I felt this was slightly more morally justifiable than buying a house that a first time buyer wanted to buy and then renting it back to them at a profit. I.e. I'd be a bit of cunt rather than a total cunt. 

My reasons for looking into this was because I wanted my children to have the possibility of having a deposit for a house when they get older.  If I could buy a student place that broke even then after 25 years it could be sold to pay for a deposit for my children. No one ever did this for me, and I despised work friends who were given large deposits but I thought fuck it. I basically don't a life of my own. Everything I've done for the last 15 years has been to prepare for having children and to be able to give them the opportunities I did not have. 

What put me off was the comments on the other site and a look at the market. Regarding the market the only place I could see where student BTL was viable* for me was around Keele University/ Staffordshire University. Even then there didn't seem to be an optimum time to buy without having a void period and potentially losing money which could take the first 5 years to recoup**. The other reason was the comments people were making on the other site regarding the large institutionally owned private student accommodation and how students preferred this to the shared houses of old. The tuition fees hike could also see the numbers of students drop, especially if the government ever loses it's stranglehold and can't stop the housing market from crashing. 

All in all I thought that I couldn't guarantee that I wouldn't have void periods over the 25 year period and it wouldn't be worth the risk. I'm still not sure what strategy I should use to save for my children. I'm specifically looking to hedge the housing market so that my children have a chance of putting a roof over their heads. 

 

*A 3-4 bed house for around £70,000 that was less than a 2 hour drive away. 

**Technically not lost but if I needed to sell in a hurry I would lose. 

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BTL can be a reasonable way to invest, particularly if you're hands-on.  

It's not been a great move for the last 15 years or so, though -- the BTLers have been bailed out by asset price growth, but that is a different investment type entirely; it is more of a leveraged gamble.

It also probably isn't a good investment for the next 15 years or so, as government look to squeeze the trapped BTL investors dry.

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7 hours ago, TheBlueCat said:

Back in 1992 in Cambridge I did the sums and thought that I absolutely would if I had an capital. Shame that I didn't really.

My mate bought a flat in Cambridge, a two bed new build. The builder was panicking in 2007 and so it was bought for 180.  It is now worth half a million, or just short, and is being rented for 1,500 a month.  

Said mate has done very well by buying and selling and renting over the last 15 years.  

Meanwhile, I've worked and looked at it all thinking it was all totally unsustainable. xD

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2 hours ago, One percent said:

My mate bought a flat in Cambridge, a two bed new build. The builder was panicking in 2007 and so it was bought for 180.  It is now worth half a million, or just short, and is being rented for 1,500 a month.  

Said mate has done very well by buying and selling and renting over the last 15 years.  

Meanwhile, I've worked and looked at it all thinking it was all totally unsustainable. xD

Yep, lots of cash to be made there if you time it right. I bought a house there in 91 (which was mainly why I had no spare cash in 92) for 60K that I finally sold for around 400K in 2009. 

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46 minutes ago, TheBlueCat said:

Yep, lots of cash to be made there if you time it right. I bought a house there in 91 (which was mainly why I had no spare cash in 92) for 60K that I finally sold for around 400K in 2009. 

I bet your house earned more than you over that period. O.o

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12 minutes ago, One percent said:

I bet your house earned more than you over that period. O.o

Well, if I'd stayed in the job I did in Cambridge when I bought it then yes, quite likely! I spent most of those 18 odd years working in the City with stints in New York and HK added in so made a fair bit more in the end - all the moving around is primarily why I never sold it and bought a bigger one. With 20/20 hindsight, I wish I'd doubled down in around 2000 and bough the biggest, fuck-offest house in Cambridge I could have a got a mortgage for. 

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5 hours ago, The XYY Man said:

I would not do BTL.

Because I find the taste of Beelzebub's cock a little harsh...

 

XYY

Id not touch it north of hertfordshire.

Id not touch is south of hertfordshire.

In yhe north you chaces of getting a tenant the council wint touh are very high. Youll be lucky if you still have the pipework left, nevermind the rent paid.

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