How far will house prices fall [volume 4]

[TheLordJohn]

I'm of the opinion that if you end up with a bad 'un, you've only got yourself to blame.
If you don't vet them properly - it's your fault.
If you trust a letting agent to vet them properly - it's your fault.

Edited by TheLordJohn on Thursday 19th May 15:36

Edited by TheLordJohn on Thursday 19th May 15:37

[jonah35]

anonymous said:

[redacted]

Its easy enough to look on right move and make offers / buy auction properties.

.

[jonah35]

anonymous said:

[redacted]

What costs?

Annual gas check £35, insurance £90 if you want it, no real other costs. Call it £20 per month tops.

A tenant has this week put in a new patio and new garage roof at his expense on one - often the long term tenants like doing up 'their' home.

I know now people will see this as a challenge and try and disprove me or argue but id rather not get into an argument

[jonah35]

AstonZagato said:

How scummy are the clients? Will the changes to Housing Support blow a hole in that return?

Edited by AstonZagato on Thursday 19th May 13:42

Young couples, widows, tradesmen etc,

My handyman lives in one of mine

After a while you get to know who is good and bad - very surprisingly the people are often on quite a large income but are just bad with money or have been bankrupt or just dont want to buy for a million reasons etc, for some families their family have never owned property so they just never think about buying. Guarantors help too.

[jonah35]

gibbon said:

TheLordJohn said:

As you've taken my reply so well, I'll expand.
I know a few people with the above attitude.
One of them has absolutely zero interest in ever owning a home.
The largest % of her half-decent income is spent on her friendships; visiting friends where she is from, holidaying with friends, hosting friends, meeting friends she met on holiday, etc etc.
And animal charities etc. Her friendships are the most important thing to her. So as long as she can rent a nice home at a reasonable price, which she can and does, then she's happy.
Me, I'm the opposite. I want to own everything...! Lol.

Well, sure, i would just think its human nature for most even vaguely aware and intelligent people to realise that if they are happy to stay in a place for a long time, i.e. your tenant of 10 years, then ownership makes a more attractive proposition.

I would also think that in the example of your friend above, this is very much a time and place attitude for most people, at some point she will realise that though not her immediate priority to be a home owner, at some point earning money to pay rent may become an issue.

I am not landlord bashing at all, i am a landlord myself, but the property i own and rent out has obvious reasons for the tenants choosing to do that, i personally find it harder to understand a 10 year tenancy in a 10% yielding 50k house, even for those with different priorities.

Not everyone is money or property obsessed which many can find strange. But,mif they have a landlord they can ring if they have a problem, a roof over their head then theyre happy. They often dont think about mortgages, think about buying or even care about buying,

Its a bit like me saying why do some people lease cars for £400pm when they could buy an e36 m3 for cash and have it appreciate in value? Plenty on ph find leasing completely normal yet costs more than rent in the north.

You can try and challenge it or go with the flow and buy up these properties

[jonah35]

kiethton said:

battered said:

anonymous said:

[redacted]

There was a place in the news at £1 recently, auction start price. Just sold £20k, this is for an ex LA flat in the central belt of Scotland somewhere. 2 beds, in a state. Refurb costs maybe £10k, if you can't get better than £300 pcm rent out of that you're mad. £350-400 unless the area is utterly horrible. Say 10 months let pa on average, it stands you £30k, rental income (10 months basis) is £3k. 10%.

Go to Grimsby, 3 bed terraces £50-60k. Rental £400+. This is in an area I'd live in, so better than some. Not far off 10%.

9% yield is nice but the yield represents a huge risk unless you're a professional landlord and can spread risk or are actively selecting your tenant. One year you may get your 9% gross return, the next it'll cost you all of that 9% and more.

These houses are cheap for a reason, your typical tenant may only be willing to pay rent for a few months, you've then got the hassle of kicking them out (£££) whilst they then trash/steal fittings from the place when they leave (£5k+)...

Your nice £4,800 rental income can quickly disappear and leave you liable for a fair chunk more.

I really feel thats too pessimistic a view. The places many of these homes are are in nice areas with green fields, a local nice shop and local high street and delis etc, they are far, far safer than some london neighbourhoods with houses 10x the price.

A young nurse or policeman isnt likely to trash your house, are they?
Or an elderly widow?
An electrician or handyman without 3 years accounts so he cant get a mortgage?

Why would anyone trash or steal fittings if you have their parents as a guarantor and a deposit which, to them, is a lot of money which they would like back?

If they did trash a small 2 bed terrace and stripped it back to bare brick then its not even the end of the world. Handymen can work for £70 a day and fix it up in no time. You can also get malicious damage insurance if youre that bothered.

[Sheepshanks]

House behind ours has always been rented out - the family in it when we bought our house had kids same age as ours so we got to know them quite well.

He was a solicitor. We didn't know they rented the place until they told us they were moving out as the landlady wouldn't let them decorate. That was 10 yrs after we moved in, so they'd been in it longer than that.

[Mr Whippy]

jonah35 said:

A tenant has this week put in a new patio and new garage roof at his expense on one - often the long term tenants like doing up 'their' home.

What a mug!

[jonah35]

Mr Whippy said:

jonah35 said:

A tenant has this week put in a new patio and new garage roof at his expense on one - often the long term tenants like doing up 'their' home.

What a mug!

He works with a builder so i dont think he will have paid much other than materials.

I know you say hes a mug but if it brings more happiness to his young child and partner then is it that bad? Financially its a daft idea but isnt going out to a restaurant, leasing a car, going on holiday, having a beer with mates, buying new clothes?

[battered]

kiethton said:

battered said:

anonymous said:

[redacted]

There was a place in the news at £1 recently, auction start price. Just sold £20k, this is for an ex LA flat in the central belt of Scotland somewhere. 2 beds, in a state. Refurb costs maybe £10k, if you can't get better than £300 pcm rent out of that you're mad. £350-400 unless the area is utterly horrible. Say 10 months let pa on average, it stands you £30k, rental income (10 months basis) is £3k. 10%.

Go to Grimsby, 3 bed terraces £50-60k. Rental £400+. This is in an area I'd live in, so better than some. Not far off 10%.

9% yield is nice but the yield represents a huge risk unless you're a professional landlord and can spread risk or are actively selecting your tenant. One year you may get your 9% gross return, the next it'll cost you all of that 9% and more.

These houses are cheap for a reason, your typical tenant may only be willing to pay rent for a few months, you've then got the hassle of kicking them out (£££) whilst they then trash/steal fittings from the place when they leave (£5k+)...

Your nice £4,800 rental income can quickly disappear and leave you liable for a fair chunk more.

You know what, how about I put my money where my mouth is and let you know how it goes? I'm about to buy a btl in Grimsby, I have the cash and people to manage it. Watch this space.

[battered]

kiethton said:

battered said:

anonymous said:

[redacted]

There was a place in the news at £1 recently, auction start price. Just sold £20k, this is for an ex LA flat in the central belt of Scotland somewhere. 2 beds, in a state. Refurb costs maybe £10k, if you can't get better than £300 pcm rent out of that you're mad. £350-400 unless the area is utterly horrible. Say 10 months let pa on average, it stands you £30k, rental income (10 months basis) is £3k. 10%.

Go to Grimsby, 3 bed terraces £50-60k. Rental £400+. This is in an area I'd live in, so better than some. Not far off 10%.

9% yield is nice but the yield represents a huge risk unless you're a professional landlord and can spread risk or are actively selecting your tenant. One year you may get your 9% gross return, the next it'll cost you all of that 9% and more.

These houses are cheap for a reason, your typical tenant may only be willing to pay rent for a few months, you've then got the hassle of kicking them out (£££) whilst they then trash/steal fittings from the place when they leave (£5k+)...

Your nice £4,800 rental income can quickly disappear and leave you liable for a fair chunk more.

You know what, how about I put my money where my mouth is and let you know how it goes? I'm about to buy a btl in Grimsby, I have the cash and people to manage it. Watch this space.

[kiethton]

battered said:

kiethton said:

battered said:

anonymous said:

[redacted]

There was a place in the news at £1 recently, auction start price. Just sold £20k, this is for an ex LA flat in the central belt of Scotland somewhere. 2 beds, in a state. Refurb costs maybe £10k, if you can't get better than £300 pcm rent out of that you're mad. £350-400 unless the area is utterly horrible. Say 10 months let pa on average, it stands you £30k, rental income (10 months basis) is £3k. 10%.

Go to Grimsby, 3 bed terraces £50-60k. Rental £400+. This is in an area I'd live in, so better than some. Not far off 10%.

9% yield is nice but the yield represents a huge risk unless you're a professional landlord and can spread risk or are actively selecting your tenant. One year you may get your 9% gross return, the next it'll cost you all of that 9% and more.

These houses are cheap for a reason, your typical tenant may only be willing to pay rent for a few months, you've then got the hassle of kicking them out (£££) whilst they then trash/steal fittings from the place when they leave (£5k+)...

Your nice £4,800 rental income can quickly disappear and leave you liable for a fair chunk more.

You know what, how about I put my money where my mouth is and let you know how it goes? I'm about to buy a btl in Grimsby, I have the cash and people to manage it. Watch this space.

I wish you all the best with it, they can work, but, I was trying to say was that if you have little experience in picking the correct tenants, little in the way of time (as these are often more time-demanding) there may be better risk adjusted BTL's out there

[bayleaf]

I'm going to hazard a guess here that keithon has zero experience of letting property and is passing on perceived wisdom.

[turbobloke]

battered said:

kiethton said:

battered said:

anonymous said:

[redacted]

There was a place in the news at £1 recently, auction start price. Just sold £20k, this is for an ex LA flat in the central belt of Scotland somewhere. 2 beds, in a state. Refurb costs maybe £10k, if you can't get better than £300 pcm rent out of that you're mad. £350-400 unless the area is utterly horrible. Say 10 months let pa on average, it stands you £30k, rental income (10 months basis) is £3k. 10%.

Go to Grimsby, 3 bed terraces £50-60k. Rental £400+. This is in an area I'd live in, so better than some. Not far off 10%.

9% yield is nice but the yield represents a huge risk unless you're a professional landlord and can spread risk or are actively selecting your tenant. One year you may get your 9% gross return, the next it'll cost you all of that 9% and more.

These houses are cheap for a reason, your typical tenant may only be willing to pay rent for a few months, you've then got the hassle of kicking them out (£££) whilst they then trash/steal fittings from the place when they leave (£5k+)...

Your nice £4,800 rental income can quickly disappear and leave you liable for a fair chunk more.

You know what, how about I put my money where my mouth is and let you know how it goes? I'm about to buy a btl in Grimsby, I have the cash and people to manage it. Watch this space.

As long as it's not The Nunny

[battered]

turbobloke said:

As long as it's not The Nunny

Oh yes, The Nunny is most definitely off limits. Guildford Street and the rest of the Murder Mile too. (For those not familiar with the delights of Grimsby, the Murder Mile is a ~1 square mile section of town that according to the Police has a greater number of murders per unit area than anywhere in London)

[Mr Whippy]

jonah35 said:

Mr Whippy said:

jonah35 said:

A tenant has this week put in a new patio and new garage roof at his expense on one - often the long term tenants like doing up 'their' home.

What a mug!

He works with a builder so i dont think he will have paid much other than materials.

I know you say hes a mug but if it brings more happiness to his young child and partner then is it that bad? Financially its a daft idea but isnt going out to a restaurant, leasing a car, going on holiday, having a beer with mates, buying new clothes?

If I had a family, was paying competitive rental prices, were a builder enough to do such jobs, and were willing to invest my money into someone elses property, I'd buy my own property!

If they're paying you current market rates for the property then he's definitely a mug. If they've been there for years on end and have rental that is a good chunk less than market rates then that might be different. Being a good tennant in the view that you won't raise rates.

Will you?

[Hitch78]

Tenant home improvement is quite a thing these days. I have a couple of friends who own cheaper houses but rent a bigger one (as they claim they can't afford the transaction to move up the ladder) who have decorated their current rental houses. One of which is a C17th farmhouse so not a straight wall in sight!

[Ari]

Just had a letter through the door from an estate agent saying that they are 'detecting early signs that the rocketing house prices may have slowed down. In some areas we think they may have already peaked'.

It goes on blah blah, last chance to 'cash in' on this 'buoyant market', etc.

That's a first, an estate agent admitting that property prices aren't a certified one way bet! (see also 'they aren't building any more land', etc etc).

[jonah35]

Mr Whippy said:

jonah35 said:

Mr Whippy said:

jonah35 said:

A tenant has this week put in a new patio and new garage roof at his expense on one - often the long term tenants like doing up 'their' home.

What a mug!

He works with a builder so i dont think he will have paid much other than materials.

I know you say hes a mug but if it brings more happiness to his young child and partner then is it that bad? Financially its a daft idea but isnt going out to a restaurant, leasing a car, going on holiday, having a beer with mates, buying new clothes?

If I had a family, was paying competitive rental prices, were a builder enough to do such jobs, and were willing to invest my money into someone elses property, I'd buy my own property!

If they're paying you current market rates for the property then he's definitely a mug. If they've been there for years on end and have rental that is a good chunk less than market rates then that might be different. Being a good tennant in the view that you won't raise rates.

Will you?

He cant get a mortgage so its a moot point.

Theyre paying market rate.

I wont raise his rent in the short term and probably not for years and years and years if he stays - no point rocking the boat.

[jonah35]

Ari said:

Just had a letter through the door from an estate agent saying that they are 'detecting early signs that the rocketing house prices may have slowed down. In some areas we think they may have already peaked'.

It goes on blah blah, last chance to 'cash in' on this 'buoyant market', etc.

That's a first, an estate agent admitting that property prices aren't a certified one way bet! (see also 'they aren't building any more land', etc etc).

What Are they telling people theyre seling homes to?