Buy-to-let,still a good idea?

[Tangled up in Blue]

Is buy-to-let still a good idea?This article explains why one landlord has recently quit.
http://gu.com/p/35748

 

[Smudger]

Is buy-to-let still a good idea?This article explains why one landlord has recently quit.
http://gu.com/p/35748

Sorry Barna, I'm not jumping on the anti-Barnablue bandwagon and have no axe to grind with you but that is another waste of life, nothing-interesting-to-read-here story. Very dull looking bloke "A" rents out his property for over 10 years before selling it at more than a 100% profit, stating that he sold it for "moral reasons." The article is essentially at best a convoluted sack of **** and at worst exceptionally poor journalism, so why post it on here? Are you sponsored by the Guardian website? The comments below the article say more about the bitter and twisted readership of The Guardian than anything written in the article. What fun they must be at parties.

It's basically a page of complete bollocks, which is then critiqued by sad b'stards.....

Can I suggest you highlight the odd positive story every now and then?

 

[Tangled up in Blue]

Smudger,I appreciate your comments and would like to point out that I have no particular axe to grind here either.Unlike you though, I thought it was a pretty interesting article and worthy of further comment.
I'll try and look for more positive stores to link to in the future though.:winking:

 

[Hotman]

I'd say that blokes a mug. The tax breaks are the same as any business investment, and what is "morally wrong" about providing housing? I'm thinking of one tenant, who I know has actively chosen to rent because of the low rents I charge him - £600 for a top notch 3-bed semi in a new build area, immaculate throughout, and he has no need to maintain the place because I do it all. I lose about £2k a year on that in cash terms. He has had security of tenure for the last 4 years, and I'll continue to offer 2 year agreements so he and his family have somewhere to live - and shielded against interest rate fluctuations that I suffer. But of course, that's morally wrong isn't it...

To answer your question (as it wasn't answered in the article), yes at present BTL is dead, and I won't be investing this year, as the margins charged by banks over base rate mean that the yields aren't sufficient to service debt, let alone also maintain a property. But that's not fluffy enough for the Guardian is it?

As Smudger says, it's a nothing story, simply written to be promoted on forums and Facebook by left wing numb nuts.

 

[Tangled up in Blue]

I'm thinking of one tenant, who I know has actively chosen to rent because of the low rents I charge him - £600 for a top notch 3-bed semi in a new build area, immaculate throughout, and he has no need to maintain the place because I do it all. I lose about £2k a year on that in cash terms. He has had security of tenure for the last 4 years, and I'll continue to offer 2 year agreements so he and his family have somewhere to live - and shielded against interest rate fluctuations that I suffer. But of course, that's morally wrong isn't it...

Um...so why do you do it? :unsure:

 

[Berrichonne shrimper]

Sorry Barna, I'm not jumping on the anti-Barnablue bandwagon and have no axe to grind with you but that is another waste of life, nothing-interesting-to-read-here story. Very dull looking bloke "A" rents out his property for over 10 years before selling it at more than a 100% profit, stating that he sold it for "moral reasons." The article is essentially at best a convoluted sack of **** and at worst exceptionally poor journalism, so why post it on here? Are you sponsored by the Guardian website? The comments below the article say more about the bitter and twisted readership of The Guardian than anything written in the article. What fun they must be at parties.

It's basically a page of complete bollocks, which is then critiqued by sad b'stards.....

Can I suggest you highlight the odd positive story every now and then?

If you see or even saw a picture of the zones number one lefty then everthing falls into place Smudger and you begin to warm to him for all that life and mother nature has dealt him,check my facearse page out for a glimpse of the hero that is barmablue.

 

[Crabby Shrimper]

I'd say that blokes a mug. The tax breaks are the same as any business investment, and what is "morally wrong" about providing housing? I'm thinking of one tenant, who I know has actively chosen to rent because of the low rents I charge him - £600 for a top notch 3-bed semi in a new build area, immaculate throughout, and he has no need to maintain the place because I do it all. I lose about £2k a year on that in cash terms. He has had security of tenure for the last 4 years, and I'll continue to offer 2 year agreements so he and his family have somewhere to live - and shielded against interest rate fluctuations that I suffer. But of course, that's morally wrong isn't it...

To answer your question (as it wasn't answered in the article), yes at present BTL is dead, and I won't be investing this year, as the margins charged by banks over base rate mean that the yields aren't sufficient to service debt, let alone also maintain a property. But that's not fluffy enough for the Guardian is it?

As Smudger says, it's a nothing story, simply written to be promoted on forums and Facebook by left wing numb nuts.

I have to ask, and I'm sure there's a good reason, but why do it? I'm not saying that it's wrong to lose money so as to offer someone a stable home for them and their family, but I'm guessing there's still a long term financial incentive to yourself.

 

[Hotman]

Um...so why do you do it? :unsure:

Capital accumulation - stripping out booms and busts, assets tend to inflate at circa 2 - 3% per year. You can leverage investment in property, unlike other investments.

 

[Hotman]

I have to ask, and I'm sure there's a good reason, but why do it? I'm not saying that it's wrong to lose money so as to offer someone a stable home for them and their family, but I'm guessing there's still a long term financial incentive to yourself.

See my last post, yes there is, and I have to treat cash losses as effectively an "investment" into a longer term pension fund.

 

[Neil_F]

This man is clueless. No wonder the banks are in such trouble if they employ people who don't understand basic economics.

My two favourties are his assertion that one individual having more than one property for rent is a restriction on supply. By having a rental portfolio there are more properties for rent, thus an increase in supply; if the landlord sold them then there would be fewer rental properties, thus increasing supply.

The other is the classic of rent control. It is deeply ironic that an individual complaining about a lack of supply wants to introduce price controls. If the price is fixed below market value then why would any landlord rent? Thus supply is drastically reduced. This is evidenced in many places around the world, not least Manhattan, which operates some rent control but it is virtually impossible to find one.

The price of housing is down to one thing: the cost of obtaining permission to build in this country. Restrictive planning law means that there is limited supply of new build land. This pushes up the price of houses as available housing stock is always outpaced by demand.

 

[number11]

Smudger,I appreciate your comments and would like to point out that I have no particular axe to grind here either.Unlike you though, I thought it was a pretty interesting article and worthy of further comment.
I'll try and look for more positive stores to link to in the future though.:winking:

So where is your further comment? If you just post articles from another site, without giving some kind of opinion, that is akin to SPAM.

 

[Tangled up in Blue]

So where is your further comment? If you just post articles from another site, without giving some kind of opinion, that is akin to SPAM.

The further comment I was hoping for, came from C,who clearly knows a lot more about BTL than I do.I was also interested in Neil F.'s comments.The only property I (jointly) own is the house I live in, though my wife does (with her brother) jointly own property in France,which she rents out occasionally.
FWIW, I'm a great believer in the Marxist concept of praxis,which I take to mean learning from others through argument,discussion or example.Believe it or not,I certainly don't think I have all the answers on this particular issue, or any other, for that matter.
Who knows, I may actually rent out my house,one day. I certainly don't think BTL is morally wrong as such.
(I note that SBH was quick to criticise me for posting a link from The Observer last Sunday but also note that the thread in question attracted over 900 views and 93 replies.Do you have something against discussion as such, or more likely, just the usual source of my links?
IMO,I clearly stated my views with regard to The Observer article and implicitly,on this thread,with the question I asked about BTL).

 

[South Bank Hank]

So where is your further comment? If you just post articles from another site, without giving some kind of opinion, that is akin to SPAM.

(I note that SBH was quick to criticise me for posting a link from The Observer last Sunday but also note that the thread in question attracted over 900 views and 93 replies.Do you have something against discussion as such, or more likely, just the usual source of my links?
IMO,I clearly stated my views with regard to The Observer article and implicitly,on this thread,with the question I asked about BTL).

Actually, I was quick to criticise your latest link to the Guardian website and your failure to post your own opinion with the link as you've been asked to many times before. Asking a question is not giving an opinion. Please see your Private Message inbox where we can discuss this further.

 

[Berrichonne shrimper]

How many places do you have in your portfolio C,when i had a shop in thorpe bay turns out that my window cleaner had 14.

 

[Smudger]

How many places do you have in your portfolio C,when i had a shop in thorpe bay turns out that my window cleaner had 14.

Funny that but a few years back someone close to me was on a TV gameshow where one of her fellow contestants was introduced as a "cheeky chappy" window cleaner (and he was a nice bloke to be fair.) They used this "just a window cleaner" thing throughout the episodes that he was involved with but the truth was he owned 18 properties (two of them outright) and he was probably the richest (self-made) man in the room. Never underestimate the power of the window cleaning business....

 

[Berrichonne shrimper]

I never judge a dvd by its cover,saw my window cleaner in tesco in his massive BMW and asked him about his wealth next time he called,he to was a nice guy and like C and Dave the pimp had a good head for money and hats.

 

[DTS]

C as always sums up things perfectly.

Property is a long term investment and therefore a short term loss is no real problem as such. Any loss can be carried forward on paper. Also just because there is a loss on paper it does not mean your out of pocket to the same amount as the loss. You can for example claim wear and tear allowance of 10% of the gross rent if the property is furnished - yet you might not have that 10% worth of damage that year ( you might have more )

The wife and I own four flats which we let out. We don't do it to make short term gain as property s a long term thing. I am confident in 30+ years when I retire that all four property's will be worth more (plus my own home too I hope) so making a £1500 loss as I did this year isn't an issue. Too much profit is taxed as income at your marginal rate anyway so litle point making loads only to loose it in income tax.

Would also add some people like me can be trapped by CGT. My first flat I brought for £50k in 1998 (I was 18). I still own it now and it's worth approx £150k. If I sold it now I would get him for CGT on any gains after it failed to be my main residence and be taxed at 28% hence why I can never really sell it.

 

[Pubey]

Would also add some people like me can be trapped by CGT. My first flat I brought for £50k in 1998 (I was 18). I still own it now and it's worth approx £150k. If I sold it now I would get him for CGT on any gains after it failed to be my main residence and be taxed at 28% hence why I can never really sell it.

Why? Seems like a good investment, even post tax.

 

[DTS]

Why? Seems like a good investment, even post tax.

Well I guess it is but if I made say £100k profit (it will be less than this as I can claim for the times it was my main home) to keep the figures simple then I would loose £28k (or 28% if I knew the exact aount) straight away to HMRC which is a pretty painful amount to loose.

Now you could say it was money I never had but to give away £28k would pain me. There is a mortgage of approx £85k (repayment mortgage in fairness) on it so after paying ther CGT and then the mortgage off I wouldnt really see a lot. Not to mention estate agents fees, legal costs etc.

 

[Pubey]

ahh got you.