Pabs Posted June 26, 2007 Author Share Posted June 26, 2007 (on the same properties often, signifying gazundering...) You've lost me?....Sorry if i'm being thick here.... Quote Link to comment Share on other sites More sharing options...
JohnA Posted June 26, 2007 Share Posted June 26, 2007 It's the opposite of gazumping Quote Link to comment Share on other sites More sharing options...
DaveK Posted June 26, 2007 Share Posted June 26, 2007 Interesting...... TBH the only reason we couldn't afford a BTL was because of the deposit - We have 20k (in savings + capital in flat) which equated to the 10% deposit we wanted for our next house. If we used some of that money for the BTL, we'd have a much smaller deposit - thus increasing the cost for our new house. How can we find out the potential interest for our flat for rent? Obviously I can look on market and see what else is available in our area, but we'd have to ensure that we keep tennants in the flat or we won't be able afford the payments. We HAVE changed agents - signed up with them last night. They start advertising the property next week, when our current contract expires with the other agents. I think we may seriously look at the BTL on the flat though... lots of people seem to think we can afford it - might have to talk to the mortgage people later on. I'd be a little careful of this. There is no guarantee that you will always have tenants in the flat. In addition, there is no guarantee that they will always pay the rent. I was living with a girl many years ago and her tenant stopped paying - she had to get a court order to get him evicted, and then an attachment order on his earnings. In addition - if things go wrong, you will have to pay for them. Built in cooker? Oh dear - it's blown up. Time for a new one. If you are going that route, you need some spare income or capital or you are treading a dangerous line I think. The other thing to consider is that depending on how you do it, you don't make much money on the rent and do rely on capital growth. Which is good as long as it continues to grow. On my rented property, I only had a 30K mortgage (was costing about £280 per month with endowments). But by the time I'd paid the rental agency, and any maintenance (e.g. gas inspection), and part of the rental agreement, and income tax on the rent - I made virtually nothing from it (maybe £50 per month max). And that was with a small mortgage. Obviously I did make money from the capital growth - and over the long term that can make sense. But I didn't like the idea that if the market collapsed (which it did once while I owned the house) that growth is wiped out and I have to wait another 5-10 years to get it back. If you are going to be financially stretched with the new house, I'd be careful about having a Buy to Let. If you have no problems - great idea. But if you do - you need to be able to cope with them. Quote Link to comment Share on other sites More sharing options...
JohnA Posted June 26, 2007 Share Posted June 26, 2007 ... I'd be careful about having a Buy to Let.... Very good points, all of them. Many people operate under the assumption that the property market can go nowhere but up. At some point they find out that this is not the case. Traditionally they *have* gone up in the long run, but that is a 10+ year horizon. Lots of people have jumped into the 'Buy to let' bandwagon hoping for quick and easy riches. This has affected rent prices of course. When market conditions make it unviable they will all frantically try to sell, dumping a mass of properties on the market. Who knows how property prices will be affected. That's why the bank of England is taking it easy with the rate rises. Quote Link to comment Share on other sites More sharing options...
Pabs Posted June 26, 2007 Author Share Posted June 26, 2007 yep - I still don't think it's wise for us to do Buy-to-let (personally) but sooo many people keep on at me to look at it more seriously and perhaps get one.... which I'm doing just to see the options available to us. But I can't see us being able to somehow. Quote Link to comment Share on other sites More sharing options...
JohnA Posted June 30, 2007 Share Posted June 30, 2007 ... but sooo many people keep on at me to look at it more seriously and perhaps get one.... .. This is exactly why you wouldn't want to do it! When every dick and harry (pensioners, housewives, unemployed etc) think it is the way to easy money, then you'd want to get out of that market pronto Same with stockmarket bull months. Before the big crash in the States Warren Buffet (I think) started selling frantically when his shoe-shine boy gave him tips on what stocks to buy. When it comes to investment opportunities, once the hoi polloi jump in the game the crash is only round the corner. Either get there early, or not at all. Latecomers lose the most, it's like musical chairs - you don't want to be left standing when everybody around you is frantically selling. Quote Link to comment Share on other sites More sharing options...
far Posted June 30, 2007 Share Posted June 30, 2007 Pablo - dont be scared of tennants not paying rent, yes it needs to be factored in but the return vs risk is positive. Breaking even on a rental is no problem at all, I have a property where I am paying £46 per month out of my own pocket - but guess what? since I had the property (approx 2 years) the increase in property price as far out weighed the £46 per month! Yes tennants are a PITA, yes it takes up some of your time, yes sometimes they dont pay - money is seldom earned without some kind of outlay from yourself. In 5+ years of tennanted properties (touchwood) I havent ever had to take anyone to court, make sure your tennants are proffesionals, meet them personally, get an agent who does correct searches and some even guarentee rent nowadays. With the finances you have explained here it seems pretty easy to get a BTL in your situation, and it will put you in much more of a powerful buying position for your next property also (i.e. nothing to sell) Quote Link to comment Share on other sites More sharing options...
Jurgen-Jm-Imports Posted June 30, 2007 Share Posted June 30, 2007 tbh am not sure how everyone down south can afford houses, most guys on here earn decent money but the nice houses down south are 200k to 300k, me and my missus bought a house in january for 185k here and if we were down south we would never get the same style property and quiet area we liver in now.. and the mortage payments scare me tbh so i feel for the guys down south who get bigger mortgages and probaly only earn a national average of 10-12k more a year which on a monthly income is not enough to justify the house costs differences.. a guy that earns 20k to the guy that earns 28k = not that much more a month to cover the increased cost of property down south Quote Link to comment Share on other sites More sharing options...
Franko Posted June 30, 2007 Share Posted June 30, 2007 Where i live u can buy a 3 bedroom terraced house for £48k Wouldnt recommend anyone to live here tho Quote Link to comment Share on other sites More sharing options...
Pabs Posted June 30, 2007 Author Share Posted June 30, 2007 well we've now got 6 (yes, 6) other almost IDENTICAL flats on the market down our road now - ALL within 1-2k of each other. We're changing agents on tuesday, but it's looking more and more bleak - I don't think we're ever going to sell. The buy-to-let mortgage is definately a no-go now - the fact that 4 of the 6 flats are all end-of-chain indicates to me that they WERE all BTL's but people are not getting the money, so are selling up. Quote Link to comment Share on other sites More sharing options...
vvteye Posted June 30, 2007 Share Posted June 30, 2007 me and my missus bought a house in january for 185k here and if we were down south we would never get the same style property and quiet area we liver in now.. That's seems bloody cheap for the house you have in your avatar Jurgen. Where is it... Beruit? Quote Link to comment Share on other sites More sharing options...
Jurgen-Jm-Imports Posted June 30, 2007 Share Posted June 30, 2007 lol thats my local hall lol Quote Link to comment Share on other sites More sharing options...
Pabs Posted July 6, 2007 Author Share Posted July 6, 2007 well, we're considering the BTL again! We need to speak to a few people - 1) to see if they think the flat will get regular tennants and at what price and 2) to see if we can burrow a higher LTV for our next property. With the interest rates increasing again, the market here seems to be getting quieter and quieter (agents are all confirming this now) and so we think it might be logical to keep the property for a while, and see what happens. We're not worried about making profit from the BTL - so long as the rental income covers the costs, we're happy. (inc. repairs/maintenance etc) - We might be lucky and gain some money if the flat price increases...... Any opinions? Quote Link to comment Share on other sites More sharing options...
Pabs Posted July 23, 2007 Author Share Posted July 23, 2007 Right.... well.... it's been bloomin' ages.... (or at least seems like it) but......... We've sold the flat (again) and suprisingly only 1k less than before, and this weekend we've found a new place, put in an offer, and had the offer accepted! Now, annoyingly there are a few issues: 1. We need to exchange within 4-6weeks, as the owners of the house we are buying are getting a new-build, and the builders like everything tied up well in advance 2. We can't then move into our new house for an additional 6-8 weeks, as the owners can't move into their "temp" accomodation until their house is built. 3. Our buyer is going for 100% mortgage. (meaning very little chance of a deposit) People in the business - what happens with regards to 100% mortgages? Because we are exchanging a LONG time before completion, how can we ensure that the buyer doesn't disappear before completion? He'll not be putting any (or very little) money on the line - what happens? Do we sue? Thanks all. Quote Link to comment Share on other sites More sharing options...
Pot Posted July 23, 2007 Share Posted July 23, 2007 I haven't even considered buying my own place yet, living in Cheltenham isn't cheap (For the bits not like Iraq), and thanks to a rather irresponsible 20's, my credit isn't good - But I've virtually cleared that up and I'm nearly into the black - At the moment, I'm paying £520 a month rent on my 2 bed flat, which I can handle quite well, with some ££ to burn (But not lots)... One of my friends in Telford has just bought a nice (For a 1st home) 2 bed house for £76k, which would be perfect for me, I don't know how much the payments are, but they're doing it between 2 of them, which does make things a lot easier for obvious reasons... At the moment I'm happy renting, it's what I've been doing for years, so I guess I'm kind of used to it... I try not to add up how much I have paid in rent, as I know it would annoy me about not having that kind of capital behind me, but then I think about how I'm paying for the peace of mind that I won't have any nasty suprises... Obviously one day I would like to buy my own place, I guess when I finally settle down it'll be one of the first things on the agenda, but until then I'm happy with where I'm at, so I'll carry on... But fair play to everyone who's done it, and everyone who's going through the process Quote Link to comment Share on other sites More sharing options...
Pabs Posted July 23, 2007 Author Share Posted July 23, 2007 Yeh, i know whatcha mean. But we're so happy that Helen (my gf) owns the flat we live in - we've been paying £400/month in mortgage for 4 years, and made £30,000 profit in the process. It's funding a huge chunk of the next house - which we'll hopefully be in for at least 5 years. Quote Link to comment Share on other sites More sharing options...
Pot Posted July 23, 2007 Share Posted July 23, 2007 we've been paying £400/month in mortgage for 4 years, and made £30,000 profit in the process. That's what gets me when I'm renting, but I think after what if I buy and it crashes?... Quote Link to comment Share on other sites More sharing options...
Pabs Posted July 23, 2007 Author Share Posted July 23, 2007 That's what gets me when I'm renting, but I think after what if I buy and it crashes?... unfortunately mate i totally understand. But thats a BIG IF you have there..... and it'll still find it's way back up. Eventually. Quote Link to comment Share on other sites More sharing options...
Pot Posted July 23, 2007 Share Posted July 23, 2007 Aye, it's too much of a risk for me, as at the moment, I'd be buying on my own, and with my credit, if I was able to get a mortgage, I'm guessing the rates would be whacked up a bit (Same as CCards for bad credit people), but if it went bust, it'd be too much on my shoulders... I've told my parents once they go senile I promised I'd put them in a good home anyway ... Quote Link to comment Share on other sites More sharing options...
tbourner Posted July 24, 2007 Share Posted July 24, 2007 That's what gets me when I'm renting, but I think after what if I buy and it crashes?... ... it won't matter, as long as interest rates don't skyrocket at the same time causing you to sell!! If you can ride the crash out then prices will soon go up again, you've just got to ignore the equity (-ve or +ve) in your house at any one moment, think of the whole picture. Quote Link to comment Share on other sites More sharing options...
TLicense Posted July 24, 2007 Share Posted July 24, 2007 I thought once you had exchanged contracts, you were legally obliged to buy the property. As I understand it, If he does "pull out" then as I understand it he'll have financial penalties to pay, and you'll be able to sue for breach of contract. Right.... well.... it's been bloomin' ages.... (or at least seems like it) but......... We've sold the flat (again) and suprisingly only 1k less than before, and this weekend we've found a new place, put in an offer, and had the offer accepted! Now, annoyingly there are a few issues: 1. We need to exchange within 4-6weeks, as the owners of the house we are buying are getting a new-build, and the builders like everything tied up well in advance 2. We can't then move into our new house for an additional 6-8 weeks, as the owners can't move into their "temp" accomodation until their house is built. 3. Our buyer is going for 100% mortgage. (meaning very little chance of a deposit) People in the business - what happens with regards to 100% mortgages? Because we are exchanging a LONG time before completion, how can we ensure that the buyer doesn't disappear before completion? He'll not be putting any (or very little) money on the line - what happens? Do we sue? Thanks all. Quote Link to comment Share on other sites More sharing options...
Pabs Posted July 24, 2007 Author Share Posted July 24, 2007 I thought once you had exchanged contracts, you were legally obliged to buy the property. As I understand it, If he does "pull out" then as I understand it he'll have financial penalties to pay, and you'll be able to sue for breach of contract. Yes - that's exactly what I thought. But if he is a 1st-time buyer getting 100% mortgage, then the chances of him owning much that we could sue him for would be quite slim..... If he doesn't give us 10% deposit, and if we still have to give 10% deposit (which we don't think we'd be able to do anyway, as it's mostly tied up in the flat), then we'll lose the most money if something falls through. Quote Link to comment Share on other sites More sharing options...
SupraAyf Posted July 24, 2007 Share Posted July 24, 2007 If you brake the exchange of contract then all you loose is the money/deposit that you put down on the property. As an example, but this is the main reason why new house developers always ask for a 10% deposit on exchange as it's a lot of money to loose if you pull out of the contract (which you can do at any time I may add!). Quote Link to comment Share on other sites More sharing options...
Pabs Posted July 24, 2007 Author Share Posted July 24, 2007 If you brake the exchange of contract then all you loose is the money/deposit that you put down on the property. As an example, but this is the main reason why new house developers always ask for a 10% deposit on exchange as it's a lot of money to loose if you pull out of the contract (which you can do at any time I may add!). Thats the EXACT problem we don't want to face. We can't go laying £20k on the line with our buyer putting £0 down - would leave us broke and him neither better or worse off (bar survey/search fee's) Looks like we may need to come up with some alternative arrangement... How the hell does any chain cope with someone with a 100% mortgage???? Quote Link to comment Share on other sites More sharing options...
JohnA Posted July 24, 2007 Share Posted July 24, 2007 Why exactly does a 100% mortgage present a higher risk than a 80% one from your perspective? These are arrangements between those people and their lenders. They don't necessarily indicate commitment to this transaction, do they? I find their request for a 10% deposit laughable, in the current UK environment. Even if it were the norm (which it isn't!) would you really risk losing a potential buyer when they're hanging by the skin of their teeth? Currenlty you don't exactly have dozens of desperate buyers queueing do you? Quote Link to comment Share on other sites More sharing options...
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