Singing Pig

Pod:

e.g. .... guy i know, paid 165k for a house rented at 600pcm ...... (i know this ... i'm his accountant! ... although i have son many clients who this could apply to there's not much point saying "let's call him john, to hide his identity).  he used his gifted deposit as full deposit & mortgaged 165k at 6.5% ... £893pcm,,,,rent £600pcm.  "property always goes up" .... etc.  in fairness, he can live with the rental loss.  but then in comes the ground rent (£230), gas safety (£50), insurance (£180),,,,,,,,again, its not going to ruin him, but its starting to hurt a bit at a total annual loss of  £4k (excluding voids). 

problem will come in about 10 months when his current fixed rate runs out .... he can afford to put in another 10-15k ... bu will it be enough?  most lenders are looking at 110-115% interest cover as a minimum, so its not just the LTV that's a problem, its the interest cover.  to get a half-decent rate he might need to put in 30k .......which is silly money.  there are a lot of people like this ....... (relatively speaking) ....... what will they do?  my mate reckons he will remortage his PPR & chuck in 30k to get a decent rate ....... but that still doesnlt hide the poor underlying investment. 

 

This is just very poor investing by an amateur. Do you really believe the majority of experienced landlords invest like this ?

In every class there are a few that get an F grade. 

Well, it only take a few of these idiots with more than 10 properties to go bust in an area and the supply/dfemand issue will be resolved.

pg,

no, he's not a pro landlord.  or even an experienced amateur.  he runs a cafe in town (this is starting to sound ridiculous!), has had some success (purely down to the market) in BTL, without ever realising what the fundamentals were ..... few people invest like this ..... but possibly enough to make an impact.  but, he's now talking about selling .. get rid of the liability etc ...... so another amateur bites the dust ...... and we come full circle back to the pro's who have supplied the market before BTL went mainstream in 1996 ....... like i say, i know a few couples who bought over-priced stock .... they get a bad tenant, suffer a 2-month void .......... panic ........ try to sell ........ nothing doing ......... straight to a BMV trader ......... (i know a good one ... wink ) ... problem solved .... hubby b*llocked ... !

People should of sold a year ago, now it is too late and likely to make a loss.

brit1234:

People should of sold a year ago, now it is too late and likely to make a loss.

hey brit, where would we be without these nuggets of wisdom eh?  so glad i clicked into this thread! 

Pod:

brit1234:

People should of sold a year ago, now it is too late and likely to make a loss.

hey brit, where would we be without these nuggets of wisdom eh?  so glad i clicked into this thread! 

 

Oh I had them about Mar 07 that the market was at its peak, common sense really.

mbga9pgf3:

Well, it only take a few of these idiots with more than 10 properties to go bust in an area and the supply/dfemand issue will be resolved.

Sam

There's likely to be in excess of 30,000 residential properties taken into possession this year, therefore I seriously doubt that a few hundred more chucked into the mix will solve any supply/demand problem - assuming that there was a supply and demand problem in the first place.

brit1234:

Pod:

brit1234:

People should of sold a year ago, now it is too late and likely to make a loss.

hey brit, where would we be without these nuggets of wisdom eh?  so glad i clicked into this thread! 

 

Oh I had them about Mar 07 that the market was at its peak, common sense really.

Brit

With your incredible ability to forecast the markets you should turn your hand to equities - you'd make a much bigger profit than messing around in the resi market!

Either that or do what all the other property geniuses do and sell an e-book :s !!!