Buy to lets
 

I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Buy to lets
 

On Nov 8, 12:36 pm, Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Don't!

MBQ

Buy to lets
 

In article , Phil Gardner
scribeth thus
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.


Look at it short term and run a mile!..

Look at it long term .. and yep, good as investment as any.

I reckon that the UK housing market will wobble quite a bit as its well
over priced and has been that way for a long time.

And I suppose you have done your homework about the times when you don't
have any tenants and allowed for maintenance costs etc...
--
Tony Sayer

Buy to lets
 

Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Just make sure you vet your tenants properly ;-)

http://www.harrowtimes.co.uk/news/localnews/display.var.1767060.0.cannabis_factory_raided.php

--
Adrian C

Buy to lets
 

On Thu, 08 Nov 2007 12:36:34 GMT, Phil Gardner wrote:

I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.


www.housepricecrash.co.uk
--
http://www.freedeliveryuk.co.uk

Buy to lets
 

Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Yes, you may have always wanted to do it.

However, that's not a valid reason to invest, unless you can afford to lose
(a fraction of the) money and walk away happy.

If you are relying on house prices continuing to increase to increase your
profits in the long term, I would - at least in the UK - walk away now.

If you've got a property with established paying long-term tenants that you're
buying, and can cope if the housing market stalls, or falls back a few
percent, then it may not be unreasonable.

How much research have you done into the rental market in the area in
question?

Buy to lets
 

Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.


This is about as bad a time as any to go into BTL.


--
Grunff

Buy to lets
 

On Thu, 08 Nov 2007 05:06:50 -0800, Man at B&Q
wrote:

On Nov 8, 12:36 pm, Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.


Don't!

MBQ

Encouraging
just like the knowledgeable service you get at B&Q

Buy to lets
 

Phil Gardner wrote:

Encouraging
just like the knowledgeable service you get at B&Q


He's right though. Read up about financial bubbles. They are a perfectly
natural phenomenon, that has been around for thousands of years. We are
currently in the middle of such a bubble, and you are about to buy just
before it bursts.


--
Grunff

Buy to lets
 

On 8 Nov, 13:35, mogga wrote:

www.housepricecrash.co.uk

Beware! That place is a support group for the dispossessed, not a
place for rational analysis of the housing market. A considerable
number of them sold up in 2003 and have been calling a crash everyday
since. I'd put about as much credence on their opinions as I would on
Foxtons.

PWC produce monthly roundups of the whole British Economy which are
pretty comprehensive, and rather better informed. Latest one is here,
see pp.22-26 on the housing market. Their "central" prediction is slow
growth. Their worst-case (5% probability) scenario is not a disaster.
http://www.pwc.co.uk/pdf/uk_economic_download_nov07.pdf

Buy to lets
 

On Nov 8, 3:04 pm, Anita Palley wrote:
On 8 Nov, 13:35, mogga wrote:

www.housepricecrash.co.uk

Beware! That place is a support group for the dispossessed, not a
place for rational analysis of the housing market. A considerable
number of them sold up in 2003 and have been calling a crash everyday
since. I'd put about as much credence on their opinions as I would on
Foxtons.

PWC produce monthly roundups of the whole British Economy which are
pretty comprehensive, and rather better informed. Latest one is here,
see pp.22-26 on the housing market. Their "central" prediction is slow
growth. Their worst-case (5% probability) scenario is not a disaster.http://www.pwc.co.uk/pdf/uk_economic_download_nov07.pdf

House prices aren't the only issue here though. You also have to
consider the rental returns (which are suffereing) and whether your
money would be better somewhere else.

MBQ

Buy to lets
 

On 8 Nov, 15:24, Man at B&Q wrote:

House prices aren't the only issue here though. You also have to
consider the rental returns (which are suffereing) and whether your
money would be better somewhere else.

Fair point, although even small capital growth can more than make up
for mediocre rental returns. Also I'd steer well clear of city centre
2 bed "luxury apartments". These are notoriously overpriced, you're
competing with every other landlord in the block to get them let, and
they've been falling in value while the rest of the market has boomed.

Buy to lets
 

Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.


Sensible chap.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.


Madness.
Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Get out now.

Stick the money in a commodities specialist fund.

You will make more money with less hassle, and you can sell in a day if
needs be.


I am not registered under the FSA to give financial advice so do not sue
me if this turns sour on you ;-)

Buy to lets
 

tony sayer wrote:
In article , Phil Gardner
scribeth thus
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.


Look at it short term and run a mile!..

Look at it long term .. and yep, good as investment as any.

Historically a slightly worst investment than average actually.

A stock market tracker over the same period would have done better.


I reckon that the UK housing market will wobble quite a bit as its well
over priced and has been that way for a long time.

And I suppose you have done your homework about the times when you don't
have any tenants and allowed for maintenance costs etc...

Buy to lets
 

Anita Palley wrote:
On 8 Nov, 13:35, mogga wrote:

www.housepricecrash.co.uk

Beware! That place is a support group for the dispossessed, not a
place for rational analysis of the housing market. A considerable
number of them sold up in 2003 and have been calling a crash everyday
since. I'd put about as much credence on their opinions as I would on
Foxtons.

PWC produce monthly roundups of the whole British Economy which are
pretty comprehensive, and rather better informed. Latest one is here,
see pp.22-26 on the housing market. Their "central" prediction is slow
growth. Their worst-case (5% probability) scenario is not a disaster.
http://www.pwc.co.uk/pdf/uk_economic_download_nov07.pdf


A situation in which rents do not cover mortgage repayments and the
capital growth of the asset doesn't either is a disaster in MY books.

Remember the dotcom boom? and bust ? well then it was THE place to be.
After it was the WORST place to be. Now its not a bad place to be.

Right now the best place to be is in emerging market and commodities
funds. Averaging about 30% p.a.

Property funds - 4 of the top 5 WORST performing funds over last year
have been property based = -30%.

Buy to lets
 

Ian Stirling wrote:
Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Yes, you may have always wanted to do it.


Ive alway's wnated to own a racehorse, and a formula one team ;-)

However I would never expect either of them to be any more than very
expensive hobbies...which perhaps fortunately, I can't afford anyway.


However, that's not a valid reason to invest, unless you can afford to lose
(a fraction of the) money and walk away happy.

If you are relying on house prices continuing to increase to increase your
profits in the long term, I would - at least in the UK - walk away now.

If you've got a property with established paying long-term tenants that you're
buying, and can cope if the housing market stalls, or falls back a few
percent, then it may not be unreasonable.

How much research have you done into the rental market in the area in
question?

Buy to lets
 

On Nov 8, 2:57 pm, Phil Gardner wrote:
On Thu, 08 Nov 2007 05:06:50 -0800, Man at B&Q





wrote:
On Nov 8, 12:36 pm, Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Don't!

MBQ

Encouraging
just like the knowledgeable service you get at B&Q

I never use 100 words when one will do ;-)

MBQ

Buy to lets
 

The Natural Philosopher wrote:
tony sayer wrote:

Look at it long term .. and yep, good as investment as any.

Historically a slightly worst investment than average actually.

A stock market tracker over the same period would have done better.


Which is probably true. It is surprising therefore that if you go into a
bank and ask to borrow 200k to buy a buy-to-let they won't bat an
eyelid. Go in and ask to borrow 200k to invest in a FTSE100 tracker and
you might get a different response.

The reason that people have made such a profit over the last ten years
is not just the general rise in prices but the fact that a lot of that
investment has been leveraged. But just as that is an advantage in a
rising market is is a _big_ problem in a falling market.

In the long term it doesn't matter if property underperforms the stock
market slightly. If three-quarters of your investment is coming from the
bank your profit is increased four-fold.

Andrew

Buy to lets
 

On Thu, 08 Nov 2007 12:36:34 GMT Phil Gardner wrote :
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this
its something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning
to question my judgment and timing
Is anyone on this forum in this business that could offer advice.

My only comment would be to say that the 'market' is lots of little
markets and what matters is the outlook in yours.

And as the other Tony has says, think about repair costs, voids, letting
costs and what happens if your tenant stops paying (it will take you
months to get legal possession). The problem with this being your first
is that if something goes wrong it is 100% of your BTL enterprise in
trouble. If you get to (say) properties and one goes bad/is empty then
it's much less destabilising.

--
Tony Bryer SDA UK 'Software to build on' http://www.sda.co.uk

Buy to lets
 

On 8 Nov, 16:16, The Natural Philosopher wrote:

Right now the best place to be is in emerging market and commodities
funds. Averaging about 30% p.a.

Property funds - 4 of the top 5 WORST performing funds over last year
have been property based = -30%.

Interesting! Do you have a link for this or any further information?
If you're talking about residential property that is spectacular
mismanagement. Whatever you think might happen over the next 12
months, to have lost 30% over the last 12 is bordering on criminal.

Buy to lets
 

On Nov 8, 12:36 pm, Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Re-mortgaging was a *bad* move.

You need to get a BTL mortgage on the rental property ASAP. Otherwise
you are not allowed to offset the interest payments against rental and
will be taxed on the full value of the rental payments. Having a
mortgage on the BTL property is like borrowing money to run a
business. If you remortgage your home, you are deemed to be using your
own capital rather than a loan.

Did you take any advice before starting down this road?

MBQ

Buy to lets
 

Nobody seems to have mentioned the ethics of BTL - the fact is that
it's a low form of capitalistic parasitism - hoping to earn money
merely by owning something that other people need. Providing a service
which nobody wants. Nobody loves a landlord, and BTL is a big factor
in cranking up house prices. Be warned - the bubble may burst at any
time and everybody will have a good laugh at the landlords in
difficulties.

Different if you were building new - that could be a useful thing to
do.

cheers
Jacob

Buy to lets
 

Phil Gardner wrote in message
...
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

Well you have not said were in the country you are buying and if it's a
house or a flat,
both could be significant.
i.e. flat Nottingham - Manchester Don't

most of the overall financial gain in buy to let comes from rising house
prices.
my own feeling is that house prices in most parts of the country are at a
perilously high level for a first time investor,
The rental income net yield from a property can be as low as 3% If you have
a month or two without a tenant,
And it would only take very small interest rate rise to put you in a
position were you were losing money every month, that coupled with the real
possibility of a short term fall in house prices could find you on the
street without a house at all.

FWIW I have been "in property" so to speak for 40 years and have seen good
times and bad times to buy and sell, I have almost been bankrupted and
repossessed twice which tends to focus the mind.
I am selling houses at present as the leases expire
and have just bought a pub, much to the wife's dismay.
To sum up, you are correct to be having very cold feet.




-

Buy to lets
 

On 8 Nov, 17:06, normanwisdom wrote:
Nobody seems to have mentioned the ethics of BTL - the fact is that
it's a low form of capitalistic parasitism - hoping to earn money
merely by owning something that other people need. Providing a service
which nobody wants. Nobody loves a landlord, and BTL is a big factor
in cranking up house prices. Be warned - the bubble may burst at any
time and everybody will have a good laugh at the landlords in
difficulties.

Different if you were building new - that could be a useful thing to
do.

cheers
Jacob
Or to put it another way - hoping to get an income of the backs of
people worse off than yourself who can't afford to buy houses. Should
be against the law!

roll on the revolution - landlords first to the wall!

cheers
Jacob

Buy to lets
 

Phil Gardner wrote:
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

It can still make sense as a cash investment but not if you have to
borrow the money. Wait for better times.

Dave

Buy to lets
 

On Thu, 08 Nov 2007 09:06:45 -0800 Normanwisdom wrote :
Nobody seems to have mentioned the ethics of BTL - the fact is that
it's a low form of capitalistic parasitism - hoping to earn money
merely by owning something that other people need. Providing a service
which nobody wants.

Which lots of people want. If you rent, you know more or less exactly
what your outgoings are and you're free to move on at minimal cost if
you need to move for any reason. And you only need a three or four
figure deposit.

--
Tony Bryer SDA UK 'Software to build on' http://www.sda.co.uk

Buy to lets
 

normanwisdom wrote:
Nobody seems to have mentioned the ethics of BTL - the fact is that
it's a low form of capitalistic parasitism - hoping to earn money
merely by owning something that other people need.

Ah. Like tescos does?

Or a chemist?

Providing a service
which nobody wants.

Thats must be Nu Laber en..

Nobody loves a landlord, and BTL is a big factor
in cranking up house prices. Be warned - the bubble may burst at any
time and everybody will have a good laugh at the landlords in
difficulties.


******.
Different if you were building new - that could be a useful thing to
do.

cheers
Jacob

Buy to lets
 

normanwisdom wrote:
On 8 Nov, 17:06, normanwisdom wrote:
Nobody seems to have mentioned the ethics of BTL - the fact is that
it's a low form of capitalistic parasitism - hoping to earn money
merely by owning something that other people need. Providing a service
which nobody wants. Nobody loves a landlord, and BTL is a big factor
in cranking up house prices. Be warned - the bubble may burst at any
time and everybody will have a good laugh at the landlords in
difficulties.

Different if you were building new - that could be a useful thing to
do.

cheers
Jacob
Or to put it another way - hoping to get an income of the backs of
people worse off than yourself who can't afford to buy houses. Should
be against the law!


Well tahts must be why Nu Laber hasn't built a single councl house in
years then.

roll on the revolution - landlords first to the wall!

After you then.


cheers
Jacob

Buy to lets
 

On Thu, 08 Nov 2007 17:09:38 GMT, "Mark" wrote:

I am selling houses at present as the leases expire
and have just bought a pub,

Out of the frying pan...? :)

Buy to lets
 

On 8 Nov, 17:27, Tony Bryer wrote:
On Thu, 08 Nov 2007 09:06:45 -0800 Normanwisdom wrote :

Nobody seems to have mentioned the ethics of BTL - the fact is that
it's a low form of capitalistic parasitism - hoping to earn money
merely by owning something that other people need. Providing a service
which nobody wants.

Which lots of people want. If you rent, you know more or less exactly
what your outgoings are and you're free to move on at minimal cost if
you need to move for any reason. And you only need a three or four
figure deposit.

--
Tony Bryer SDA UK 'Software to build on' http://www.sda.co.uk

True there are those who need to rent in that sense but most do it
because they can't afford to buy - which is made worse by BTL boosting
prices. And many can't afford a 3 or4 figure deposite - and of those
that can many don't see it again. I've had 3 kids at Uni at various
times and they have all been ripped off by landlords not returning
deposites.

cheers
Jacob

Buy to lets
 

"Phil Gardner" wrote in message
...
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing
Is anyone on this forum in this business that could offer advice.

A chap I know who has been doing buy to let for many years is currently
selling his properties off, if that is any help. Apparently, the places to
buy to let at the moment are Barcelona and Paris, but I've not tried it
myself.

Colin Bignell

Buy to lets
 

Maria wrote in message
...
On Thu, 08 Nov 2007 17:09:38 GMT, "Mark" wrote:

I am selling houses at present as the leases expire
and have just bought a pub,

Out of the frying pan...? :)



Well the frying pan contains on the menu tonight
pan fried sea bass with spinach and a red wine sauce
caramelised plum tart with vanilla ice cream
nice pint of real ale
it's a good exchange for 3 sets of poxy tenants from were im sitting.


-

Buy to lets
 

On Thu, 08 Nov 2007 18:10:13 GMT, "Mark" wrote:


Maria wrote in message
.. .
On Thu, 08 Nov 2007 17:09:38 GMT, "Mark" wrote:

I am selling houses at present as the leases expire
and have just bought a pub,

Out of the frying pan...? :)



Well the frying pan contains on the menu tonight
pan fried sea bass with spinach and a red wine sauce
caramelised plum tart with vanilla ice cream
nice pint of real ale

Sounds delicious!

it's a good exchange for 3 sets of poxy tenants from were im sitting.


I can see why it would be - good luck then!

Buy to lets
 

Maria wrote in message
...
On Thu, 08 Nov 2007 18:10:13 GMT, "Mark" wrote:


Maria wrote in message
.. .
On Thu, 08 Nov 2007 17:09:38 GMT, "Mark" wrote:

I am selling houses at present as the leases expire
and have just bought a pub,

Out of the frying pan...? :)



Well the frying pan contains on the menu tonight
pan fried sea bass with spinach and a red wine sauce
caramelised plum tart with vanilla ice cream
nice pint of real ale

Sounds delicious!

it's a good exchange for 3 sets of poxy tenants from were im sitting.


I can see why it would be - good luck then!

Publican..? :)



-

Buy to lets
 

On Thu, 08 Nov 2007 18:43:15 GMT, "Mark" wrote:


Maria wrote in message
.. .
On Thu, 08 Nov 2007 18:10:13 GMT, "Mark" wrote:


Maria wrote in message
.. .
On Thu, 08 Nov 2007 17:09:38 GMT, "Mark" wrote:

I am selling houses at present as the leases expire
and have just bought a pub,

Out of the frying pan...? :)



Well the frying pan contains on the menu tonight
pan fried sea bass with spinach and a red wine sauce
caramelised plum tart with vanilla ice cream
nice pint of real ale

Sounds delicious!

it's a good exchange for 3 sets of poxy tenants from were im sitting.


I can see why it would be - good luck then!

Publican..? :)

No...my brother-in-law is just getting out...big pub on a
working-class estate. There just isn't the business anymore and the
smoking ban is the final straw for proifts.
CAMRA reckoned in 2005 that 26 pubs per month were closing, but if you
have yummy food like that on the menu, you are in a much better
position!

Buy to lets
 

normanwisdom wrote in message
ups.com...
On 8 Nov, 17:06, normanwisdom wrote:
Nobody seems to have mentioned the ethics of BTL - the fact is that
it's a low form of capitalistic parasitism - hoping to earn money
merely by owning something that other people need. Providing a service
which nobody wants. Nobody loves a landlord, and BTL is a big factor
in cranking up house prices. Be warned - the bubble may burst at any
time and everybody will have a good laugh at the landlords in
difficulties.

Different if you were building new - that could be a useful thing to
do.

cheers
Jacob
Or to put it another way - hoping to get an income of the backs of
people worse off than yourself who can't afford to buy houses. Should
be against the law!

roll on the revolution - landlords first to the wall!

Off you trot Trotsky, looking for the next state handout.


-

Buy to lets
 

Maria wrote in message
...

I can see why it would be - good luck then!

Publican..? :)

No...my brother-in-law is just getting out...big pub on a
working-class estate. There just isn't the business anymore and the
smoking ban is the final straw for proifts.
CAMRA reckoned in 2005 that 26 pubs per month were closing, but if you
have yummy food like that on the menu, you are in a much better
position!


Ah
This is a country village freehold freehouse, the restaurant is the money
maker.
Along with a busy B+B and wedding reception facilities, its next to a church
:)



-

Buy to lets
 

On 2007-11-08 16:11:27 +0000, The Natural Philosopher said:

tony sayer wrote:
In article , Phil Gardner
scribeth thus
I know this is a bit OT but
I am about to exchange contracts on my first buy to let property in
the next 3 weeks and im getting cold feet.

I have re-mortgaged my house to release the equity to pay for this its
something I have always wanted to do.

Due to the turmoil in the housing and finance market I am beginning to
question my judgment and timing Is anyone on this forum in this
business that could offer advice.


Look at it short term and run a mile!..

Look at it long term .. and yep, good as investment as any.

Historically a slightly worst investment than average actually.

A stock market tracker over the same period would have done better.


... and with zero input of effort, which is not free.

Buy to lets
 

On 2007-11-08 16:37:44 +0000, Andrew May said:

The Natural Philosopher wrote:
tony sayer wrote:

Look at it long term .. and yep, good as investment as any.

Historically a slightly worst investment than average actually.

A stock market tracker over the same period would have done better.


Which is probably true. It is surprising therefore that if you go into
a bank and ask to borrow 200k to buy a buy-to-let they won't bat an
eyelid. Go in and ask to borrow 200k to invest in a FTSE100 tracker and
you might get a different response.

Primary residence as collateral?



The reason that people have made such a profit over the last ten years
is not just the general rise in prices but the fact that a lot of that
investment has been leveraged. But just as that is an advantage in a
rising market is is a _big_ problem in a falling market.

In the long term it doesn't matter if property underperforms the stock
market slightly. If three-quarters of your investment is coming from
the bank your profit is increased four-fold.

Andrew

Buy to lets
 

On 8 Nov, 17:01, Man at B&Q wrote:

Re-mortgaging was a *bad* move.

You need to get a BTL mortgage on the rental property ASAP. Otherwise
you are not allowed to offset the interest payments against rental and
will be taxed on the full value of the rental payments. Having a
mortgage on the BTL property is like borrowing money to run a
business. If you remortgage your home, you are deemed to be using your
own capital rather than a loan.

Did you take any advice before starting down this road?

I hate to have to say you're wrong, but you are! The test for whether
the mortgage interest is a deductible expense is what the PURPOSE of
the loan was (to buy a rental property), not what the loan is secured
over (or indeed whether it's secured at all) or whether it's marketed
as a BTL mortgage. If in doubt check the Inland Revenue document on
this.

Anyway, my understanding of the original post what that he has only
raised the deposit through the remortgage, the bulk of the money will
be raised through a loan secured over the place to be let out. All the
interest on all the money he borrows to buy the property (via both
loans) is deductible (as are loan interest payments for any business).