How do you make money on this

[Lee Jones Jnr]

I don't have just one.

You and Massey obviously know far more and are doing much better than I.

I shall bumble along scraping a living as I am for the time being and perhaps someday learn my lesson and change the way I do things.

 

[Matt1959]

wish we had those sort of properties in our area at that price as those sums work out really well. Here, they dont work out at all ( buy at £120K rent at £7200pa) I'm assuming majority of your tenants are DSS?

 

[MASSEY]

I don't have just one.

You and Massey obviously know far more and are doing much better than I.

I shall bumble along scraping a living as I am for the time being and perhaps someday learn my lesson and change the way I do things.

Dont try and turn the tables, you were saying that it was a poor amount of money before lol,

I thought saxondale had been banned

 

[Lee Jones Jnr]

wish we had those sort of properties in our area at that price as those sums work out really well. Here, they dont work out at all ( buy at £120K rent at £7200pa) I'm assuming majority of your tenants are DSS?

No. A couple are, but most are young families or older singles.

You don't have to buy in your own geographical area. Obviously it is nice to be close at hand even if just for piece of mind, but not essential.

That said, this thread clearly shows that I far from the best example to follow.

 

[Lee Jones Jnr]

Dont try and turn the tables, you were saying that it was a poor amount of money before lol,

I thought saxondale had been banned

How many properties do you have so far Massey?

 

[MASSEY]

That said, this thread clearly shows that I far from the best example to follow.

Im probably going to have my first one done this year by september nov time as im waiting for funds,

I think i might blog everything i do also the stages and figures, as a guide to people who need help maybe even start a site with links to my owns site of course .

As a guide to help people more than anything,

 

[Matt1959]

That said, this thread clearly shows that I far from the best example to follow.

I know that was tougue in cheek, but I've been following local prices for a few years since my missus had a buy to let and have scratched my head wondering how the sums add up (they don't, here) With your example, there is only one variable - the cost of the refurb. The purchase price is transparent, the rental price presumably is correct etc - quite an eyeopener really, mind you I wouldnt want to be hammering 200 miles up the motorway to fix a problem in one of those houses

 

[MASSEY]

How many properties do you have so far Massey?

I have one,

Im not claiming to have more than that.

 

[Allan123]

Google and Common sense are your friend. If your serious about starting a business in whatever field research it, test the market on a small scale and go from there.

 

[Lee Jones Jnr]

I shall look forward to your blog Massey. Hopefully it will be helpful for me and others like me.

Matt1959 - you could always sacrifice 10% by letting it through an agent, although then you will experience more time without a tenant. Do the legwork getting to know who can do what when you are not in the area and it can still work out.

 

[Moneyman]

I will tell you where i come in the times supplement tomorrow (but i am lumped in with family). There will be a few in there who got it wrong.

 

[Lee Jones Jnr]

Uh huh.
Something to look forward to then.

 

[luvbusiness]

My area I think is similar to matts in that the numbers dont add up when you look at the price for purchasing the house and then how little you get for rental of it.As I have mentioned earlier in some of the valley areas of South Wales the numbers start to look ok.Ok the area might not be the best but the rent you get and what you pay for the property seem pretty good.

So not sure whether you could say prices are too high or not charging enough for rent.Personally I think problem might be too many people bought houses for rental so a lot of rental properties available keeping rents lower due to competition

 

[oldeagleeye]

Another no brainer but a view you over guys might be interested in coming from a former master mortgage broker. The first in fact to offer mortgages on a 2nd property even though the BOE tried to ban my offerings.

There is only one way that we are going to recover from this recession and that it to atrract outside investment so that our banks can start lending to small business again. How do we attract outside investment ?- we put up our interest rates or should I say hike. Today savers and investers get nought worthwhile and 5-6-7% won't do it.

What's more those guys at the BOE and politicians look back in history. They see rates of up to 16% and we still recovered from the recession in the 1990's. Over the last 50 years they have typically been 10%.

A fair rate I think that will stop the unsubstainable house price inflation actually caused by people jumping on the buy to let bandwagon.

The bottom line. It's tough to cover expenses on buy to let now. Double the mortgage payments you would pay now on a BTL and you could end up losing at least £6,000 to £20,000 a year in cash terms at least.

You heard it here first then. VAT up to 25% and typical 80% mortgage rate cica 10% and all by the end of the year.

Robert

 

[sellickbhoy]

Robert,

what you say would be the banks dream - but of course, it would end ALL building/development in the country, put untild thousands of builders onto the dole and of course send repossessions rocketing - though who could the bank offload them too?

so, a compromise has to be achieved - i think mortgage/nterest rates will stay low for another year to 2 before creeping back up to 5%

that'll be enough to feck a few reluctant landlords and many of the dreamer posters on here - plus a lot of people who find themselves trapped between a rock and a hard place in their own home ownership dream

the government want to avoid the boom and bust so I think they'll reign in the 10%+ interest rates

 

[luvbusiness]

Another no brainer but a view you over guys might be interested in coming from a former master mortgage broker. The first in fact to offer mortgages on a 2nd property even though the BOE tried to ban my offerings.

There is only one way that we are going to recover from this recession and that it to atrract outside investment so that our banks can start lending to small business again. How do we attract outside investment ?- we put up our interest rates or should I say hike. Today savers and investers get nought worthwhile and 5-6-7% won't do it.

What's more those guys at the BOE and politicians look back in history. They see rates of up to 16% and we still recovered from the recession in the 1990's. Over the last 50 years they have typically been 10%.

A fair rate I think that will stop the unsubstainable house price inflation actually caused by people jumping on the buy to let bandwagon.

The bottom line. It's tough to cover expenses on buy to let now. Double the mortgage payments you would pay now on a BTL and you could end up losing at least £6,000 to £20,000 a year in cash terms at least.

You heard it here first then. VAT up to 25% and typical 80% mortgage rate cica 10% and all by the end of the year.

Robert

Eagle ive read quite a few of your posts and agree with a lot of them and what you say but not so sure if that is such a good idea.Me personally I would like to see interest rates much higher as the savings rate is terrible at the moment.I,m mid forties so do remember just when rates were high but surely then people werent as over leveraged as they are now.I think in the last ten years or so the banks and the people wanting the money just threw the rule book out of the window and seemed to think it was going to be christmas every day.

I think if rates started creeping up or jumped quickly I think we would see a lot of people go to the wall.At the moment i,m looking to buy a business and a lot of what i see after looking at the profit and loss sheet is businesses nto making that much money but asking rpice very high.It seems like the property side of the business has moved the price up but the actual business side of it hasnt really moved on and generating enough cash to warrant the asking price.Just my opinion but you do have more experience than me.

 

[oldeagleeye]

I can't lay down a complete financial package in a single post guys but histry again gives a clue to the questions that you raised

As far as present homewoners are concerned it is called 'ring fencing' which again came about as a result of the 1990's. The way that works is that all current rates are froxen for the duration of the mortgage and that book could in fact be transfered to a government owned bank.

That leaves new mortgages and here I see new products and variations on based on some that were never really heavily promoted in the past like 'Part Ownership' where you take out a mortage for perhaps half the cost of the property and techically rent the rest. Again perhaps from a Peoples Bank.

Low Start Mortgages go a bad name in the 1990s but that was only because the endowment policy they were sold with were soon show to be wildly over optimistic wht they would pay out.

The original concept however can from a small building society up north that offered a low start mortgage based on the applicants career structure mainly teachers and as the annual salary went up over 5 years so did the payments.

There are then lots of financial products already out there to make a 10% mortgage rate feasible and affordable - and would you believe it. Listening to LBC as I type I can here a promotion offering Part-Ownership properties in Kent I think.

 

[MASSEY]

.
You heard it here first then. VAT up to 25% ,Robert

Really?

And back into recession we would fall ,

It will raise to 19.5% and all that will be stated is we are falling inline with the european average,

25% would be

 

[oldeagleeye]

We have very little manufacturing in this country and what would a 25% rate mean anyway. About £15 quid extra on a washing machine or fridge. Hardly a decision breaker when it comes to white or luxury goods then.

I might go for a split 2 tier system however. 20% on non essential 25% on the rest. Don't forget whoever gets in they are looking at halving he biggest debt in peactime in under 4 years.

Robert

 

[Lee Jones Jnr]

To the trading post. do you want to go into business? I will put up a couple of hundred K and borrow the rest and pay you a management and finders fee. if you can find properties on the terms you describe....i am serious PM me if you are interested. I can get cash at 2% over base. or 4.65% fixed for 5 years.

Soooo - have you thought of any possible reasons why this would be of interest to me?






Me either.

 

[oldeagleeye]

Well you heard it here first guys. Both Cameron & Brown see the part equity - part rent mortage I mentioned as the way forward for people to get in on the housing ladder. In fact both made a point on saying so in the leaders debate last night.

Now we have to wait until after the elction to see what hapens to vat.

 

[Moneyman]

Might work but it might put up house prices.

101 buyers 100 houses = inflation
101 houses 100 buyers = deflation

nowt you can do with supply and demand.