Would you invest in UK BTL now?(11 Posts)
Or would you look at investing in property somewhere else in the world, and if so, where?
I am looking at 3/4 bed houses that will let in towns where there are high numbers of students. nurse, junior doctors etc, and two bed flat in a busy commuter town outside London.
I don't think letting them would be an issue but I'm wondering how far can the prices afford to fall if we go into another horrendous recession, where I can still ride it out making money over and above my mortgage costs (prob. about 50% LTV on mortgage.) that will make it worthwhile taking a hit on the value in the short to medium term.
Or should I be looking at being a hands-off investor in a property scheme
abroad, and probably outside Europe? What will the Euro crisis do the the European property market - perhaps there is a way to make money out of it?
Sorry, that was a bit garbled wasn't it? Hope it made sense.
I would risk my money on UK property over anything in the Eurozone as a starting point. As for the chances of UK property holding its value, that's a 'how long is a piece of string' question and, besides, the value of the property you are letting is only an issue if you need to sell up. I think the main calculation, therefore, is whether your rentals and occupancy rate will cover the mortgage payments and other costs of letting. The secondary consideration is whether interest rates are likely to go up, increasing your letting costs. The third element is whether rental values will drop if cash-strapped tenants (and possibly the changes to HB rules) can no longer afford them.
Demand still seems good for BTL in the right places and if the sums work out. You have a big investment in one place, but you have good control.
Property funds have generally been rip offs. You pay lots in fees and don't have control. Liquidity is poor, but you get someone else managing it and better diversity maybe.
Yes, I've looked into property 'clubs' where you supposedly buy BMV from a block of new-build stock they have supposedly secured at a great discount, and and then you have a completely hands-off investment managed for you by the 'club'. and they offer you a guarantee on a certain yield for the first two years or whatever.
But the sourcing fees for the properties seem so high that they wipe out any supposed discount on the purchase price, and in order for your guarantee to be valid you HAVE to take their mortgage brokers deal, you HAVE to use their contractors for fixtures and carpets etc, and any refurbs, when THEY say you must, etc, and you have little control over the cost of it. I am very cynical about all the management/maintenance charges that you are completely locked into, so I prefer to go it alone, although if buying outside the UK that may not be possible.
I would stick to the UK, the eurozone looks very unstable and will be for some time.
You will have a low LTV so should be fine if int rates rise. And provided you buy in a good location your properties should hold and increase in value over the long term.
Deutsche Bank are liquidating their Eur257M property fund. They closed it to redemptions in May. Axa and Aberdeen and doing similar things, bringing a total of about 6 big players who have done so in the last few months. Tells you something doesn't it.
I don't see UK property being an "investment" for a long time to come. Returns in London just now are approx 2% and that's without allowing for maintenance etc. I think the property market is going to be flat, at best, for the next 10+ years.
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I think to do buy to let properly you have to invest alot of time and money in it and alot of the people who make most money do it by charging alot for poorly refurbished properties that they buy at auctions, they also have building contacts often family members who subsidise the cost of property renovations.
If I was going to invest in property I'd do it in the UK so I had more control.
Glad I have found this thread.
Me and my DH are looking for our second BTL property. We already have one in the town we live in and after working hard for the past few years, we have enough money to invest in a second BTL.
We were thinking of buying one locally again but have recently started looking into Orlando, Florida.
Does anybody have any advice? UK vs Florida?
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