click on the following link:

http://www.estateagencynews.co.uk/news/cur...news-0305a.html

“Our figures suggest reduced capital growth is not causing impulse selling and that landlords are perhaps becoming more sophisticated as they place more value on the long-term benefits.�

More sophisticated!!!!! The statement that they are placing more value on long term benefits means that they got their calculations on the short term 'benefits' wrong. What on earth makes them think that they will be any better at calculating long term benefits which are inherently more uncertain/risky?

Someone on here (I forget who) had a signature that read:

"A long term plan is a short term plan that went wrong"

Not what I'm seeing.

I've had three amateur Johnny-Come-Lately BTL landlords in the last 3 years (I've moved too much ).

I still speak with them from time to time, as I have been looking around recently prior to another move... and from those conversations:

Current number of said ex landlords trying to sell now: 3
Average time on market across 3 properties: 4 months
Average number of viewings: 2
Average number of offers: 0
Number of properties sold: 0

The look on their poor little faces when the sh1t themselves when they realise that they've lost their money: Priceless

I'd bet that the vast majority who bought-to-let in the last two or three years can only make the numbers add up if they take capital gains into account. Without those, will they still be prepared to keep losing a few hundred pounds every month in the shortfall between rental income and their mortgage payments? Or will they sell and invest their hard-earned cash elsewhere?

It will take the annual HPI figure to drop down close to zero before reality hits home - we're looking at June or July. Combine that with a small interest rate rise after the election, and I can see things starting to go very wrong in the world of BTL.

IMHO those who say there's no "trigger" for a crash might be underestimating the amount of panic there will be from amateur landlords when they realise that it just doesn't add up any more.

Oh yes - I can't wait for zero annual HPI. It's pretty hard to seasonally adjust your way out of that one! Hard too to argue it's just a short-term anomaly. There won't be one statistic to turn to that will even be remotely comforting - mwah ha ha ha!

Such a terrible thing oversupply. Raise the Rents too far and you don't get a tennant - nasty. Drop them far enough to get a tennant and instead of them paying you it's the other way around

Unfortunately I don't see much oversupply where I am but I'm sure the effect of London will filter through eventually.

Totally agree with all of this.

In addition, many of them will find that with no capital gains to fall back on, they won't be able to MEW to maintain a positive cash flow. This will cause their property businesses to fail and their portfolios to be repossessed, creating large numbers of distressed sellers in a flooded market. They simply won't have the option of staying 'in it for the long-term' even if they wanted to.

Agree. Looks like some of these "investors" just make up values for yield:

Piglets

replacing the purchase cost figure with the actual amount of your cash you put into the deal which in your case would be £20000.

6000 (annual rent) divided by 20000 (your cash investment) X 100 = 30%.

The great thing with this model is that we don't need to worry about capital de-preciation cause the yield remains the same double digit figure.

Don't need to take account of the mortgage cause it's not my money......Correct but it is your liability!

I remember there was a whole load of new accounting methods for dealing with the dot.con boom 'it's the new economy stupid'....yet when it came to the bust it was the fundamentals of the old balance book that came through.

In fact it's better than that - I can double my yield by just putting down a smaller deposit on the mortgage!

The one thing that BBB was right about is that the name of the game is yield, yield and yield. If your income doesn't cover your expenses why on earth would you start that business in the first case.

I agree, no sensible investor would.

I've just registered to this forum but have been viewing it for a long time. I thought I'd just have to tell you this piece of news after I heard about the nethouseprices.com website on one of the threads.

I rent a one bedroom flat and knew that the landlord bought the flat last year. I put in the details on the website and found that he paid £114k in Feb 04 for it.

However, another landlord has been trying to sell the flat directly below me (exactly the same size as mine) for at least the past 6 mths (when I moved in). The flat has got all the fancy wooden floors etc and is nicer than mine. He was trying to sell it for £120k but then dropped the price to £115k. However, he's now taken it off the market and has decided to rent it out (someone recently moved in).
No wonder that my landlord always looks miserable when he paid £114k for his! He bought right at the top! He's got one or two other properties. When I had problems with the washing machine a month ago he told me that he was "trying to keep costs down" (fortunately the washing machine was still under guarantee).

So there you go. Any landlord who bought in the last year, especially newbies is hurting.

Can I ask how much you pay in rent? If it's less than about £600pcm then the landlord is effectively subsidising YOU to live there. Isn't that a nice thought?

I pay £475pcm. The going rate for the area is between £450-495pcm for a one bedroom furnished flat.

By the way, there are two vacant flats in my block. One of which (a 2 bedroom flat) they tried to sell in a similar fashion to the one I mentioned in my previous post but took it off the market because they couldn't sell it. Also, there are loads of new luxury flats being built in the area which aren't selling at all.

BTL over the past 2 years:

Speculative Zeal overwhelmed common sense.
Result = Losses.
Buy in haste, repent at leisure

That thread is hilarious. I am also reminded that "gift of the gab" Paul on "The Apprentice" claims to be a property developer, but failed spectacularly to calculate a percentage in last week's prog! Creme de la creme don't you know. Sugar described Adelle as "incredibly bright". Now we have some idea of his benchmark!

Did you see his nervous twitch/shady expression when sugar picked him up on it in the boardroom? Absolute classic.


I'd also like to know why someone (supposedly self made) like him who does ''£3 million pound deals, whilst riding his bike'' would give it all up for £100k P.A and be bossed around by a 5 foot egotistical corporate autocrat?


That said, I still think he'll win.




KOTC

The "bible" of many of the Singing Piggies and BTLers is the "Rich Dad, Poor Dad" book.

I read this recently- bit banal, but some common sense.

One of the key RDPD principles is that winning investments are cash flow positive. Much of current BTLing is cashflow negative and so is untenable. Follow the RDPD principles and there would be a lot less BTLing going on right now.

I read that book too,Yonmon.What he actually said was that anything that brings cash to you is an ASSET,whereas anything that takes cash away is a LIABILITY.

He then,controversially,asserted that a home was a liability!!(Controversial in the sense that this flies in the face of the conventional wisdom that a house is an asset.)

I think he(Richard Kiyosaki) made some valid points,albeit in a long winded way,but the book has been leapt upon as a bible for BTL.

Yes, forgot to mention the bit about one's home being a liability. If you accept that, which is obvious really, then it stands to reason you shouldnt' buy in a falling market.

Btw, FWIW I'm now reading a coiuple of the follow-up books in the series, Cashflow Quadrant and RDPD Guide to Investing. They are a bit better than the first one, partly due to being co-authored I would suggest. Still hardly revolutionary stuff though. Will probably flog to the second-hand shop soon.

I found the following article (character assassination?) on Richard Kiyosaki interesting.Sorry if it's a bit long.

http://www.johntreed.com/Kiyosaki.html

It sounds as though most of you want all landlords to fail because you are too scared to take a risk. It is true that many buy at the wrong price or wrong location but these people will learn from their mistakes i'm sure.

I bought my second property in May that needed a lot of work. A new kitchen, bathroom (had to take a wall down), laminated floor, painting etc. There is absolutely noway I can lose money. You will probably take the michael but both of my properties are 2 minutes from Slough Town, 5 mins to the train station, 35 minutes from Paddington. It was also built around 1850 (large house been converted) and so it isn't small like most new flats.

I was lucky enough (or stupid enough) to get the keys 2 months before I completed ,since the Tennants had moved out. I wasn't surprised because of the poor condition.

2 months of bloody hard work, all around my fulltime job, has guaranteed me a minimum of £8500 allowable capital gains for 5 years. Now I do sometimes work hard at work but there is no other way of making that sort of money for 2 months work. Even the ground rent, building insurance is covered by the rent.

I suppose what i'm saying is that you shouldn't bury your heads in the sand and wait for prices to drop. There are still bargains out there. I will be laid off at the end of March and plan to buy another with my redundancy should it be the right price and I can find work straiht away. The rent propbably won't cover the
the mortgage but i'm looking further than my next pay cheque. In less that 4 years i've made around 100K from changing 2 bathrooms and 2 kitchens and a lot of luck. It isn't just because of the massive hike in prices. Most of the other properties I considered buying have increased by about 30K.

I know i'm in for a battering because I live in Slough AND am a landlord but i'm ready for you.

Thanks for the interest............

just read this link... christ

like a lemming on an island, snorting charlie...