BTL to fund car finance
Discussion
Hi
Read something recently that I thought was interesting - but most likely complete b
ks - there's some clever people on here so seeing what you think.
Goal is to have a £250k car.
Option 1 is buying a car for £250k cash.
Alternative option would be to buy 3 properties for £250k cash, and use the rental income of around £2200/month (before all costs of course) to fund the finance of your £250k car. Presume you'd need a deposit for that car too. And no idea if £2k/month covers the cost of the finance.
And apparently the appreciation of the property value would make financing the car a better option.
Can't believe it myself, but never financed a vehicle. Don't know how you'd factor car depreciation in too which I guess is an unknown.
This is, of course, ignoring anything that might happen from the upcoming budget.
Read something recently that I thought was interesting - but most likely complete b
ks - there's some clever people on here so seeing what you think.Goal is to have a £250k car.
Option 1 is buying a car for £250k cash.
Alternative option would be to buy 3 properties for £250k cash, and use the rental income of around £2200/month (before all costs of course) to fund the finance of your £250k car. Presume you'd need a deposit for that car too. And no idea if £2k/month covers the cost of the finance.
And apparently the appreciation of the property value would make financing the car a better option.
Can't believe it myself, but never financed a vehicle. Don't know how you'd factor car depreciation in too which I guess is an unknown.
This is, of course, ignoring anything that might happen from the upcoming budget.
I can see that the numbers might work when everything is running smoothly, but the calculations dont seem to account for tax on the rental income, voids, and having to deal with three benefits level tenancies.whilst the maths may make sense, surely its just making the point that investing in property is better than buying a car?
what you choose to do with the profits (in this case finance the car) is rather immaterial
it also presumes that loaded with 3 BTL mortgages you can still get the car finance on a £250k car
what you choose to do with the profits (in this case finance the car) is rather immaterial
it also presumes that loaded with 3 BTL mortgages you can still get the car finance on a £250k car
AndyC_123 said:
Hi
Read something recently that I thought was interesting - but most likely complete bks - there's some clever people on here so seeing what you think.
Goal is to have a £250k car.
Option 1 is buying a car for £250k cash.
Alternative option would be to buy 3 properties for £250k cash, and use the rental income of around £2200/month (before all costs of course) to fund the finance of your £250k car. Presume you'd need a deposit for that car too. And no idea if £2k/month covers the cost of the finance.
And apparently the appreciation of the property value would make financing the car a better option.
Can't believe it myself, but never financed a vehicle. Don't know how you'd factor car depreciation in too which I guess is an unknown.
This is, of course, ignoring anything that might happen from the upcoming budget.
Erm, you're overlooking quite a lot.Read something recently that I thought was interesting - but most likely complete b
ks - there's some clever people on here so seeing what you think.Goal is to have a £250k car.
Option 1 is buying a car for £250k cash.
Alternative option would be to buy 3 properties for £250k cash, and use the rental income of around £2200/month (before all costs of course) to fund the finance of your £250k car. Presume you'd need a deposit for that car too. And no idea if £2k/month covers the cost of the finance.
And apparently the appreciation of the property value would make financing the car a better option.
Can't believe it myself, but never financed a vehicle. Don't know how you'd factor car depreciation in too which I guess is an unknown.
This is, of course, ignoring anything that might happen from the upcoming budget.
Transaction costs to buy the properties (notably the extra 3% SDLT) and tax on the rental income being the two main ones. Along with the (probably significant) hassle associated with dealing with 3x properties each capable of generating 10% yield.
If you're thinking that the "business" can finance the car then you've got the small matter of BIK to consider.
AndyC_123 said:
Hi
Read something recently that I thought was interesting - but most likely complete bks - there's some clever people on here so seeing what you think.
Goal is to have a £250k car.
Option 1 is buying a car for £250k cash.
Alternative option would be to buy 3 properties for £250k cash, and use the rental income of around £2200/month (before all costs of course) to fund the finance of your £250k car. Presume you'd need a deposit for that car too. And no idea if £2k/month covers the cost of the finance.
And apparently the appreciation of the property value would make financing the car a better option.
Can't believe it myself, but never financed a vehicle. Don't know how you'd factor car depreciation in too which I guess is an unknown.
This is, of course, ignoring anything that might happen from the upcoming budget.
Psstt, I have been contracted by the Paris Authorites to sell the Eiffel Tower, would you be interested?Read something recently that I thought was interesting - but most likely complete b
ks - there's some clever people on here so seeing what you think.Goal is to have a £250k car.
Option 1 is buying a car for £250k cash.
Alternative option would be to buy 3 properties for £250k cash, and use the rental income of around £2200/month (before all costs of course) to fund the finance of your £250k car. Presume you'd need a deposit for that car too. And no idea if £2k/month covers the cost of the finance.
And apparently the appreciation of the property value would make financing the car a better option.
Can't believe it myself, but never financed a vehicle. Don't know how you'd factor car depreciation in too which I guess is an unknown.
This is, of course, ignoring anything that might happen from the upcoming budget.
BoRED S2upid said:
Mathematically it can work but the properties would be absolute hovels in terrible places (like Wales) and it could be a whole heap of hassle plus you couldn’t ever visit your properties in your car.
Groak (or whatever his name was) used to advocate this - he was buying flats for £20K in Scotland and renting them to people on benefits.Sheepshanks said:
BoRED S2upid said:
Mathematically it can work but the properties would be absolute hovels in terrible places (like Wales) and it could be a whole heap of hassle plus you couldn’t ever visit your properties in your car.
Groak (or whatever his name was) used to advocate this - he was buying flats for £20K in Scotland and renting them to people on benefits.Man maths at it's finest!
I suspect you would need a fleet of more that 3 BTL's to fund the mumthlies on the exotica. I seem to recall that mr Carwow had 'only' £90k finance on his 911 gt3 and the payments on that were over £900 per month. The risk is also immense! Voids, non paying tenants you cant evict any more, and that's before business costs. There's also the small matter of persuading a bank to lend you the £250k, but maybe not a problem for the powerfully built BTL director
I suspect you would need a fleet of more that 3 BTL's to fund the mumthlies on the exotica. I seem to recall that mr Carwow had 'only' £90k finance on his 911 gt3 and the payments on that were over £900 per month. The risk is also immense! Voids, non paying tenants you cant evict any more, and that's before business costs. There's also the small matter of persuading a bank to lend you the £250k, but maybe not a problem for the powerfully built BTL director
I read that he has the £250k in cash so musing over best way to make the money work.
If you fancy a Mclaren Artura, they are £216k and are offered on a 48 month PCP at £2,000 a month with £22k down. 3.9% APR
If you are a 40% tax payer, you will need £3,333 per month gross "profit" to get to the £2k a month. It's unlikely a £250k BTL portfolio will deliver this.
BTL has been an absolute PITA for me over the past few years and I'm selling up. I've had enough of entitled tenants who see rent as a choice and that I in some way am responsible for their welfare. The last lots parting gift of abandoning the property. Every room was like it and the obligatory mattress/fridge/washing machines left in the (overgrown) garden
If you fancy a Mclaren Artura, they are £216k and are offered on a 48 month PCP at £2,000 a month with £22k down. 3.9% APR
If you are a 40% tax payer, you will need £3,333 per month gross "profit" to get to the £2k a month. It's unlikely a £250k BTL portfolio will deliver this.
BTL has been an absolute PITA for me over the past few years and I'm selling up. I've had enough of entitled tenants who see rent as a choice and that I in some way am responsible for their welfare. The last lots parting gift of abandoning the property. Every room was like it and the obligatory mattress/fridge/washing machines left in the (overgrown) garden
AndyC_123 said:
Hi
Read something recently that I thought was interesting - but most likely complete bks - there's some clever people on here so seeing what you think.
Goal is to have a £250k car.
Option 1 is buying a car for £250k cash.
Alternative option would be to buy 3 properties for £250k cash, and use the rental income of around £2200/month (before all costs of course) to fund the finance of your £250k car. Presume you'd need a deposit for that car too. And no idea if £2k/month covers the cost of the finance.
And apparently the appreciation of the property value would make financing the car a better option.
Can't believe it myself, but never financed a vehicle. Don't know how you'd factor car depreciation in too which I guess is an unknown.
This is, of course, ignoring anything that might happen from the upcoming budget.
A few issues...Read something recently that I thought was interesting - but most likely complete b
ks - there's some clever people on here so seeing what you think.Goal is to have a £250k car.
Option 1 is buying a car for £250k cash.
Alternative option would be to buy 3 properties for £250k cash, and use the rental income of around £2200/month (before all costs of course) to fund the finance of your £250k car. Presume you'd need a deposit for that car too. And no idea if £2k/month covers the cost of the finance.
And apparently the appreciation of the property value would make financing the car a better option.
Can't believe it myself, but never financed a vehicle. Don't know how you'd factor car depreciation in too which I guess is an unknown.
This is, of course, ignoring anything that might happen from the upcoming budget.
1. You haven't factored stamp duty and other costs into the purchase. You're either paying more then 250k or you're not buying 250k worth of property.
2. That's a 10% gross yield which is pretty strong for BTL. Not impossible but for the average low risk family property it's not easy to find.
3. The income is taxed, and if you have 250k to spend then you're probably a high rate tax payer. You'll also have other costs. Your net income will be closer to half the gross.
4. The potential for it to go wrong and you spend something like10-15k and months of your life getting a bad tenant out and refurbishing a trashed property.
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