Discussion
We've just dumped our residential portfolio. So, obviously, no IMHO.
Reasons:
Diminishing assets (and our like for like sale values have dropped 4% since January (central London)),
Likelihood of longterm increase in borrowing costs,
Tricky market - house prices finally levelling and dropping somewhat so, along with fixed rate borrowing, FTBs able to consider buying rather than letting
Too many people doing it. Only 70% occupancy of resletts nationwide (more like 55% in London)
Commercial's a different matter, but not one for the S/M investor unless in the form of bonds.
Reasons:
Diminishing assets (and our like for like sale values have dropped 4% since January (central London)),
Likelihood of longterm increase in borrowing costs,
Tricky market - house prices finally levelling and dropping somewhat so, along with fixed rate borrowing, FTBs able to consider buying rather than letting
Too many people doing it. Only 70% occupancy of resletts nationwide (more like 55% in London)
Commercial's a different matter, but not one for the S/M investor unless in the form of bonds.
Consider investment in Euro based country. Continental house prices still rising especially on coastal regions. The pound will continue to weaken pending UK comitment to Euro followed by panic buying overseas. Lucrative rental and resale markets with tax advantages. Contact me by e-mail if you want to know more.
Probably wise to say no, bit too late to jump on the bandwagon.
A very good mate has been doing this for a number of years and makes a very tidy profit each month on his portfolio. That said it only takes a small change in the market to make this look more like a albatross rather than a nest egg.
A very good mate has been doing this for a number of years and makes a very tidy profit each month on his portfolio. That said it only takes a small change in the market to make this look more like a albatross rather than a nest egg.
philipleslie67 said: Consider investment in Euro based country. Continental house prices still rising especially on coastal regions. The pound will continue to weaken pending UK comitment to Euro followed by panic buying overseas. Lucrative rental and resale markets with tax advantages. Contact me by e-mail if you want to know more.
mmm intersting, i have been considering france or the usa as well as the uk... i'll drop you a line when i get 5
im looking to finance by re mortgaging my main property rather than looking for a nother mort on top
G
I'd say no in the UK. You've pretty much missed the gold rush there but very possibly in the EU. Especially one of the soon to join countries (Malta and Cyprus in particular).
Or what about Brussels? I'm not too up on the market here but there seems to be a booming market for short-term business lets. Again with the 10 new countries joining there’ll be a whole lot more Eurocrats and their entourages looking for accommodation along with any number of corporate types from those countries on secondment here. The only downside is high stamp duty (about 20% I think) and low asset growth (tends to be in-line with inflation). However it is a stable market (no boom-bust) and could be a very good investment from a cash flow point of view (i.e. high rent to value ratios).
Or what about Brussels? I'm not too up on the market here but there seems to be a booming market for short-term business lets. Again with the 10 new countries joining there’ll be a whole lot more Eurocrats and their entourages looking for accommodation along with any number of corporate types from those countries on secondment here. The only downside is high stamp duty (about 20% I think) and low asset growth (tends to be in-line with inflation). However it is a stable market (no boom-bust) and could be a very good investment from a cash flow point of view (i.e. high rent to value ratios).
Surely there is still reasonable money to be made in student properties? Surely there are always going to be students looking for affordable properties regardless of the state of the housing market?
And if you are buying with a long-term view then the ups & downs of the market are smoothed out somewhat - you only lose money on a falling market if you actually sell.
And if you are buying with a long-term view then the ups & downs of the market are smoothed out somewhat - you only lose money on a falling market if you actually sell.
JonRB said: Surely there is still reasonable money to be made in student properties? Surely there are always going to be students looking for affordable properties regardless of the state of the housing market?
And if you are buying with a long-term view then the ups & downs of the market are smoothed out somewhat - you only lose money on a falling market if you actually sell.
John,
even John DeLorean could make money renting to students in manchester. Just this afternoon the landlord of the house across the road from me turned up in his 993 targa to show new tenants around...
i've been doing it for 3 years,without any problems. also, capital growth over that time has been about 40%. obviously, don't rely on capital growth in your sums, but buy three or four well-chosen houses in the right place, and you really cannot miss.
Two words for those in/considering student property "Student village" - they've killed the HIMO market stone dead in L'pool and Sheffield, Nottingham's next (can't say where-but if you drive down Uni Boulevard you might be able to guess) followed by Manchester in '04. The property is cheaper, nicer, easier to arrange than anything private landlords have to offer and the students can't get enough of it (understandably) so the only worthwhile student lets end up at the very bottom of the market - which is a hell of a lot more trouble than it's worth in my experience.
"you only lose money on a falling market if you actually sell."
Oh, dear god, no you don't !!! If your portfolio value drops your credit rating follows and if you drop into negative equity one void period and your screwed.
Buy to Let - capital - yes, mortgage - hell no in the current market
(I'm not opinionated. Just right
)
"you only lose money on a falling market if you actually sell."
Oh, dear god, no you don't !!! If your portfolio value drops your credit rating follows and if you drop into negative equity one void period and your screwed.
Buy to Let - capital - yes, mortgage - hell no in the current market
(I'm not opinionated. Just right
)Mrsd - You may be right about some cities but in Manc the student village is not the best place to be! Sure it suits some students but its got the image of being "cut off", over-priced and has a very high % of foreign students.
The majority want to live in housing in South Manc.
My 3 bed house I lived in last year was probably worth £40k ish. Over a year the lanlord took £9k from three of us in total. He spent no more than a few hundred on a new carpet and sofa's, not a huge expense!
Most landlords have 20plus houses, the rent is ~£50 99% of the time.
I dont know enough about other cities but the numbers applying to uni is growing it is only going to stimulate a demand for more student housing.
The majority want to live in housing in South Manc.
My 3 bed house I lived in last year was probably worth £40k ish. Over a year the lanlord took £9k from three of us in total. He spent no more than a few hundred on a new carpet and sofa's, not a huge expense!
Most landlords have 20plus houses, the rent is ~£50 99% of the time.
I dont know enough about other cities but the numbers applying to uni is growing it is only going to stimulate a demand for more student housing.
At the moment the Manc market is fine (I'm there, with a view to selling up late '03) However, there is one company in particular with the resources and tactics to build 'student villages' that have decimated the HIMO market in other student areas.
TBH, Rob, I very much doubt that the house you lived in is currently worth 40k or that most landlords have 20+ properties. Based on my experience of selling into, and holding properties in, the Manchester market over the last 20 years the majority of landlords own 4 or 5 properties, wealthier landlords investing instead in city center flats (both student and otherwise) as these have a greater likelihood of minimal voids and capital gains.
In my opinion (and I can only speak for the markets in which I operate as I see them at this time) the problems with student housing are excessive, taking into account insurance charges and difficulties with students (they don't pay on time/ever, they leave unpaid bills, they don't sort out their council tax, they trash the property) to merit entering the market at the moment - this doesn't, however, in any way mean it's time to get out, providing your risk exposure is minimal (ie. you own the properties, rather than the bank), you are still finding tenants of reasonable quality, and you are gaining a return on your initial investment that justifies retaining the property rather than releasing the capital while the market is bouyant.
TBH, Rob, I very much doubt that the house you lived in is currently worth 40k or that most landlords have 20+ properties. Based on my experience of selling into, and holding properties in, the Manchester market over the last 20 years the majority of landlords own 4 or 5 properties, wealthier landlords investing instead in city center flats (both student and otherwise) as these have a greater likelihood of minimal voids and capital gains.
In my opinion (and I can only speak for the markets in which I operate as I see them at this time) the problems with student housing are excessive, taking into account insurance charges and difficulties with students (they don't pay on time/ever, they leave unpaid bills, they don't sort out their council tax, they trash the property) to merit entering the market at the moment - this doesn't, however, in any way mean it's time to get out, providing your risk exposure is minimal (ie. you own the properties, rather than the bank), you are still finding tenants of reasonable quality, and you are gaining a return on your initial investment that justifies retaining the property rather than releasing the capital while the market is bouyant.
I have a couple of buy to lets, but all at about 50% equity, which takes the worry out of a falling market. Rental market is still quite poor, so even at 50% don't get much return. A 90% mortgage even at today's rates would probably show a loss against rent.
However, there is more room for making money with commercial property and foreign property, as has been said. You can sometimes find a maturing market, and my next property will probably be a holiday let in Spain or Florida.
Student lets are problematic for anything other than professional landlords, due to the high maintenance (not so much in sofas, more with multiple occupancy). They can work, but you need the right property in the right area. Buy a 10 bed ex-nursing home in Bradford city centre for 120k and it MAY make sense...
These are just pointers and IMHO, as I'm no expert, but agree that buy to let is a long term proposition not a short one.
However, there is more room for making money with commercial property and foreign property, as has been said. You can sometimes find a maturing market, and my next property will probably be a holiday let in Spain or Florida.
Student lets are problematic for anything other than professional landlords, due to the high maintenance (not so much in sofas, more with multiple occupancy). They can work, but you need the right property in the right area. Buy a 10 bed ex-nursing home in Bradford city centre for 120k and it MAY make sense...
These are just pointers and IMHO, as I'm no expert, but agree that buy to let is a long term proposition not a short one.
mrs d - I did not think of that! I forget how bad some tennants can be! From what i experienced though, a bad landlord gets away with providing shody housing with rubbish furniture etc etc.....thus keeping the costs minimal. They take huge deposits and you have to fight to get it back. Still profitable IMO but you have to be prepared to cut corners
Sounds about right incorrigable. I like young professionals (especially couples - much less hassle than sharers IMHO) - they have enough money to pay the bills, recommend decent properties/landlords/agencies to their friends and tend not to wreck the place.
robp - you're right, doing your best Rachmann impersonation is profitable, but doesn't exactly leave you feeling warm and fuzzy
Your tenants also hate you so leave the properties wrecked and a trail of unpaid bills 
(Been there, done that (thirty odd years ago-we were desperate for income), not fun 
)
robp - you're right, doing your best Rachmann impersonation is profitable, but doesn't exactly leave you feeling warm and fuzzy
Your tenants also hate you so leave the properties wrecked and a trail of unpaid bills (Been there, done that (thirty odd years ago-we were desperate for income), not fun )Slightly off topic, but...
I was considering building up a portfolio of several 2 bed terraces (Leicester at the moment, but may change) as an alternative to a pension. I am not bothered about short term income, just clearing the mortgage(s) in ~20 years. I have experience of letting a property, so know some of the pifalls.
Is this worth considering?
The main reason I asks, is my personal pension is (was?) with Equitable, and is worth pennies. Also being out of the country, means I can't contribute to a pension at the moment.
Any help greatly appreciated
Sparks
I was considering building up a portfolio of several 2 bed terraces (Leicester at the moment, but may change) as an alternative to a pension. I am not bothered about short term income, just clearing the mortgage(s) in ~20 years. I have experience of letting a property, so know some of the pifalls.
Is this worth considering?
The main reason I asks, is my personal pension is (was?) with Equitable, and is worth pennies. Also being out of the country, means I can't contribute to a pension at the moment.
Any help greatly appreciated
Sparks
Possibly, but if you're mortgaging to do it it would probably be worth giving it at least six months before getting into the market as buying lowish value properties at the height of the market clearly isn't a smart move. Are you able to put 20% in ? Hard to get a BtL mortgage with less. Can you cover voids ? Will the income cover the payments if (when) interest rates go up ? If you go in with your eyes open and recognize the potential risks I don't see a problem with this route but I'm not sure I'd do it right now.
If you're looking at doing it for that long, buy more porperties and get interest only mortgages. chances of proprty not trebling in value in 30 years low IMO, use the equity in one to pay the mortages off on another 4 (3 if you never live there and don't find a CGT workaround). Also more properties you get to ride the voids
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