BTL: Sensible financial planning or selfish avarice?

[xjay1337]

TooMany2cvs said:

That's precisely my question, yes.

You're saying that some landlords break the tax laws - so that's a black mark against the concept of BtL.

Well, yes, some do break the laws. As do people with various other businesses. Is that a black mark against the concept of plumbing or car servicing or gardening, too?

Usually, getting your mate to service your car or unclog your toilet for cash in hand is a SAVING for you, it doesn't cost you more, or push up the price of other people having their car serviced.

I'm not getting into the multi quote cock waving contest that you're famous for, so that's all I'm saying. If you disagree with me, which is fine, then we will have to agree to disagree

[98elise]

Sheepshanks said:

98elise said:

Some people believe that BTL causes high prices, however I don't believe this. It's just one financial model for getting one family in one house. It doesn't matter if that family buys, does shared ownership or rents. It's still just one family being housed in one home.

At the bottom of the market it must have put a floor under prices - which of course is good for sellers but means private buyers are likely paying more than if the BTL market didn't exist.

One of my kids lives on an estate on the outskirts of Chester and part of the housing mix are blocks of four terraced houses. They sell instantly and there frequent "To Let" signs all over the estate, which I think impacts the area overall.

As for "family" - well it depends how wide your definition is. Opposite daughter's house are three rentals - one family, one bunch of students and a group of Eastern European guys.

But regardless its three families (or groups) that want to occupy 3 properties. how you finance that doesn't affect the number of properties available. if you rent. buy, or fractionally buy the same number of properties are available for the same number of families.

I will agree that BTL does make property available to people who might not otherwise be able to occupy/buy, so affects the market a bit like much like help to buy.

[Sheepshanks]

98elise said:

I will agree that BTL does make property available to people who might not otherwise be able to occupy/buy....

I would say the other side of that is that it might be making properties more expensive so families may be renting where if properties were allowed to find their "non-BTL" level those families might be able to afford to buy.

The other thing that must happen is BTLers don't move up the ladder like owners do. So people on the next step and wanting to move themselves have fewer potential buyers. I've no idea if the number of BTL properties is significant enough to have an impact though.

[Hoofy]

I'm on the verge of pulling the trigger. #triggered

Well, not quite, but it's really tempting seeing as the government aren't really doing anything to put me off and the economy is as it is.

But at the same time, it's ruining things for people who are trying to get on the ladder.

So, both.

[bloomen]

If I were to go down the property road, there's no way I'd do it with anything residential.

I know a few people who do BTL and just seems like a monumental ball ache, especially if property doesn't keep on bubbling.

I'd be looking into paddocks, lockups, yards. Pretty much nothing to maintain, plenty of demand and no emotion involved.

[Hoofy]

bloomen said:

If I were to go down the property road, there's no way I'd do it with anything residential.

I know a few people who do BTL and just seems like a monumental ball ache, especially if property doesn't keep on bubbling.

I'd be looking into paddocks, lockups, yards. Pretty much nothing to maintain, plenty of demand and no emotion involved.

Tell me more about the latter two?

[rufusgti]

TooMany2cvs said:

Derek Chevalier said:

rufusgti said:

It's a given that it makes financial sense

According to whom?

Quite.

Relatively few places are for sale at a purchase price that gives a sensible rental yield - so the drive to raise the purchase price above that sensible multiple of rent can only be from either owner-occupier buyers or BtL buyers who haven't done basic maths.

BtL buyers who have done that basic maths set a floor price - no more than that.

Oh my word that's nonsense. Come to Cardiff and I will show you properties all over the place that will give you 5-6% yield. Go further afield and I can show you much cheaper properties that provide decent yield. The thing with Cardiff though is house prices have done really very well over the last 5 years. No way of knowing if that will continue but the signs are really positive.

Wether 5-6% yield after expenses is enough for you to be interested in btl I can't answer. It definitely has been for me over the last ten years, but everyone's personal circumstances are different. There's people I know invested in btl who definitely shouldn't be doing it. But run properly and professionally there's not a huge amount to worry about.