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  • Stickies & Evergreen

    Give me 3 reasons to remain invested in BTL



    Thank you to my twitter friend @landlordXX for inspiring this thread.

    My three reasons would be:

    1.  No one is making any more land and not enough houses are being built.  With scarcity comes value.

    2.  Property is one of the only assets that you can leverage against that offers two forms of income - capital growth and monthly income.

    3.  The private rented sector is changing and professionalising which it has always needed to do. It has been something of a "wild west" until now, so standards do need to be improved.  A kind of landlord "cull" is underway, and those that remain and embrace the various challenges will survive and prosper.

    Give me your three reasons .... !

    If you are NOT remaining invested in BTL, please give me your three reasons why.

    My twitter pal LandlordXX wants out because:



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    1. Low interest rates / good leverage

    2. Limited other investments

    3. Strong demand.

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    1. Ability to leverage to a 4:1 ratio or greater. Borrowed money depreciates with inflation so the more you borrow the greater is your gain from depreciation. Funds extracted after remortgaging are not subject to income tax because it is borrowed money.

    2. Capital growth averaging 5% (prices double in 14 years). If you can live long enough millionaire status will come to you just by waiting.

    3. Positive cash flow so that you can live on virtually passive income and save to buy more properties.

    Property is one of the easiest ways that average working class Joe, the man in the street, can elevate his wealth to eclipse the financial status of bright, intelligent high earners.

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    Reasons to stay:

    1. Always likely to be demand

    2. Great feeling of pride in the service and quality I provide

    3. Nowhere else offers better returns, especially not this safely


    Reasons to leave:

    1. Ludicrous degree of hassle and headaches especially with endless costs and regulations that can barely be kept ahead of however carefully one tries

    2. Houses that are your pride and joy getting wrecked by uncaring, ungrateful and - very often - unpaying tenants

    3. Everyone hates you. Everyone. May as well sell and let all the complaining do-gooders take on the grief

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    Some great points well made.  So as not to repeat the core principles, here are three more reasons for remaining invested in BTL:

    1.  Property is a safe place for money.  As I've been selling some properties to reduce the gearing on our portfolio due to the tax changes, we've had a scary amount of cash knocking about at times.  I sleep much easier when it's in property!

    2.  Lifestyle: Being landlords has been our life for so long. I do like knowing we provide homes for people.  I can't imagine Dave in particular doing anything else.  I prefer to write and talk about it, myself (when I can get away with it!)  Dave will often come home from a day at the coalface and ask: "What have you done today - strategizing, I suppose?!"  

    3.  Lifestyle 2: Being able to be there for the children when they were growing up, as property allowed us to work from home; and now, being able to help them financially is the best thing, for me.

    All this and as Malcolm said, being average Joes (& Josephines!) thrashing the system through BTL.

    Angela

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    Author of The Complete Guide to Property Strategies

    "It is the small decisions you and I make every day that shape our destiny" Anthony Robbins


    My reasons for no longer being an AST Landlord:

    1. The AST is too restrictive and too regulated
    2. S8 is not fit for purpose, S21 takes too long
    3. Landlord Licensing, in general, appears to penalise compliant landlords whilst failing to address many rogues.

    My reasons to remain a Landlord

    1. Non AST lets are less restrictive and regulated, allowing greater flexibility and swifter action.
    2. There are tax and pension advantages that are not available to an AST Landlord.
    3. Yield and Capital Growth are still attractive.

    I don't know whether I will be considered a BTL Landlord. I certainly wouldn't be able to have a BTL mortgage on the properties that I Buy To Let.

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    I think you only need one answer to this...

    Where else are you going to put your money to make as much both capital and revenue income that is as safe as houses?

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    I believe it was Warren Buffett who invested in razors because "men are going to continue growing beards and will need to shave every day".

    Likewise, everyone in this country needs a roof over their head.  The demand will continue.  It's good to work in a sector where your service is always in demand.

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    lol  love that - except those hipster dudes who never shave  :-)

    my three reasons;

    1) flexibility of use - BTL's can also be your children's future home, inherited asset, succession planning, and a useful leverage asset tool for further wealth creation

    2) infinity ROI return following recycled deposit and leveraged investment

    3) as part of a balanced portfolio of resi, holiday let, semi and full commercial assets too, the property class is a robust asset for which the beardy ones and clean shaven alike will always have a home / place to run a business.

    Demand outstrips supply across the board.

     

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    In short

    1. Income
    2. Capital growth
    3. Low Risk

    To expand

    1. Rents have provided me with almost all my income for the last 4 year with an average net yield of about 7%
    2. The properties in my name increased in value by 6.4% last year with wquity growth of about 10%. The year before they increased by 4.8%.
    3. My LTV in my own name has dropped below 40%. Demand for my northern properties seems to have been increasing. I plan tp sell my former home in Reading and to try to get that down to zero.

    I am taking more risk with the properties I have in my company. So far I have just been reinvesting  the profits.

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