Buying to Let

Discussion in 'Finance, Property, Law' started by Litotes, Jul 26, 2007.

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  1. I know that many soldiers think about buying property so I will not be popular for posting something like this, but I think the market is turning and this was in the Telegraph at the weekend.

    Does anyone know the flats in Colchester?

    Telegraph article

    If you are buying a property to live in, carry on; it's your home.

    If you are buying a property for investment, be careful!

    I will only start buying property when I see certain people back in the auction rooms - and they are noticeable by their absence at the moment!

    Litotes
     
  2. I visit Colchester quite regularly and Henry Laver Court is a pretty decent development right in the town centre, so if these are struggling to sell then God help the mugs who have bought into the plethora of other, less salubrious, developments in Colchester.

    These include the Colditz complex paralleling the Hythe electricity sub-station and former pikey site, the already dated development around Tesco and the university campus, and the hundreds of homes currently being built by Taylor Woodrow on former MoD land. Taylor Woodrow have recently held a sale whereby prices for some of the homes were reduced by £40K - can't see this being the last time they are reduced as they simply are not selling.

    Not the time to be going into the buy-to-let market or indeed any other house purchase - the US housing crash will inevitably be reflected in the UK over the next couple of years.
     
  3. Flats are on the Balkerne Heights development right in Colchester town centre. If you see a bare patch of land in Colchester you can bet there will soon be a block of flats on it. Building is out of control
     
  4. This thread has cheered me up! Me and Mrs Monkeyspunk have been fretting for a while over whether we should invest property for buy to let. I've also been looking into the buying Comercial property, anyone had any experience in this? Good or bad.
     
  5. Don't know Colchester but the housing market generally is quite something. There used to be a classic military question for o/cdts - "You've f*****d up - would you rather have someone with you who tried to help, or someone who pointed out where had gone wrong?" Now of course the point of the question that you would rather have the help. I always thought, "Yeah, but to avoid future disasters I'd like to know where I went wrong".

    Humans are interesting. If you say to people, "Basic economics tells you that the price of substitute goods should rise together. Potatoes and rice are near substitutes. Potato blight reduces the supply of spuds, raises the price, people switch to rice, price of rice goes up. A house is for living in. If immigration and family break-up increase the demand for houses then the price goes up. That should push up rents also. Rents in many places have increased 50% in the last ten years. Prices have tripled. What does that tell you? This is a massive motherf******g bubble. That is what ABN-AMRO say, that is what Sir David Miles (govt. economic adviser) says......"

    But nobody can really listen. People really can't take it in. So long as prices are going up people want to buy. Everybody thinks that they will always find someone to buy from them at a higher price. If there is a massive crash and you try to explain substitute goods and the relationship between rents and prices people will listen alright - but it'll be too late.

    Very, very strange. Basically our brains were not created to function in the modern world. For example, in a primitive society ownership and possession are pretty much the same thing. Modern ideas about mortgages and structured debt, debentures, personal guarantees......it doesn't appeal to the basic "monkey" brain. Women are impressed by the car and the house even if you don't own it; at a fundamental level they don't really feel the difference between ownership and possession. They understand it but they don't feel it.

    So the housing market? It'll be fine until the rush for the exits starts, but it will take a shock to cause that. It'll be interesting to see what happens if prices go nowhere for a number of years. How many people would buy at present prices if all you received was the rent, or avoided paying rent?
     
  6. Housing market up in the NE is stagnant or appears to be going that way. Loads of places in my village (where up until last year property was snapped up as soon as it was advertised), which have been standing for over 6 months. One of our neighbours just dropped £60k off his asking price to shift a property. The bloke who bought it, did so to refurbish and sell on for a profit. I'm not sure he'll shift it. The prices are utter madness, people just can't afford to pay what is being asked and the truth of the matter is, that the properties just aren't worth what people are asking.
     
  7. Anyone looking for buy to let property advice drop me a PM
     
  8. council tenant :twisted:
     
  9. As with residential currently expensive therefore yields are low. I'd hang fire at the moment. Advantage with commercial property is the tenant is usually on a full repairing and insuring lease. Disadvantage to reduce risk you really want more than one tenant. Also (in my opinion) the UK is on the verge of a recession - so do you want to be stuck with a commercial property and no tenant? You will generally need a minimum of 20% deposit for commercial.

    I'd recommend anyone to buy gold at the minute or my all time favourite (as the handle suggests) silver. Other long term bets are energy including alternatives, hard and soft commodities. Bear in mind that prior to the current market turmoil I sold most of my holdings in various Merrill Lynch funds (except gold and silver including some mining companies). If any one is genuinely interested in investing in these areas - PM me. However I do stress I am not a professional advisor and will only steer you in the right direction.

    I also hasten to add the best investment you can make is in your own business. I have invested in private companies as a business angel so if you have any ideas again PM.
     
  10. Cheers SB, some helpful advice there, PM Sent.
     
  11. All BIG NAME builders have a way of selling their properties. Certain areas and certain builders (the big fish) have a fool proof way of keeping house prices bouyant, as we found out. It goes something like this... see a new devlopement think ooh that looks nice....bored on a sunday wife says "Let's have a look at the showhome, see what hab'n'nick they have in there, might give us an idea in how to do our shitter out.." Mother-in-law gets cancer...option1 tell her to get on with it option 2 you buy in the area..we do the latter..look at home house priced at 465,995..mmm not worth it but Sales Exec says we are open to offers... sounds good.. what about 435, with carpets and stamp duty paid...(bearing in mind the incentives offered were £700 towards 12 mths mortgage re-payments, stamp duty paid, free carpets, legal fees paid, turfed gardens blah blah.Our offer is acceppted as long as we complete within 28 days or we would lose to the tune of 28,000. Incentives to us consisted of..carpets rear turf and additional stamp-duty to be paid by them. ...What they then did was...... because the company could not "de-value" their house we, on paper work, paid the full price..465,995 we got "back" the difference even though the difference did not exchange hands..if you don't understand this ....go to a MR D MCleaNS DEVELOPMENT and just ask their "Sales Exec" to explain all. This is the practice of what is keeping house prices over-priced and the market, to a certain degree, bouyant.
     
  12. But before this we rented a property in Devon..nothing special a small 3 bed house built in the 70's rented from a marine officer...monthly rent sir charged was £695 per calander month...not a bad return on his investment.
     
  13. I hadn't heard of hard cash changing hands - it is usually goods/services or a mortgage subsidy for a year or two. Of course, what that does is send a message via the Land Registry prices and the building society indices that everything is hunky dory, but what it really does is prop up a market that is already tottering, for a while longer and makes the subsequent correction even worse. Interesting!

    My money is on a correction but it could take some time to come true! People are too attached to their houses/investments and it will take a shock to make the landlords, who are currently losing money, to bail out!

    Litotes
     
  14. But you don't know what he paid, how large his mortgage was, and then the size of his taxbill!

    Litotes
     
  15. Very true, but given that he didn't have to rent the property out, he was based 5 miles down the road, makes me think that it was for investment purposes. The tax side of things he probably had it in his wifes name as she was a full time mummy that didn't work. Horses for courses I suppose! One house that we looked at buying 5 years ago for £325,000 has just come back on the market for £635,000. New kitchen and bathroom fitted lick of paint....we are kicking ourselves!!