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  • Property-a-holics

    Perfect storm planning

    Hi Tribe,

    I tried to think of a property perfect storm scenario to give myself a reality check before buying my second property. This is what I came up with:

    • Rising interest rates
    • Declining house prices
    • Highly geared portfolio
    • Tax law attack (something like S24)
    • Voids

    Any others to add to the list?

    How do you plan for several of these happening at the same time?

    Anyone have a war story that you’d be willing to share that would be of benefit to me or the tribe to hear?

    I first started pondering the perfect storm when I attended a property course (which felt a lot like a cult) that was teaching the audience to get as many credit cards as possible and using them to raise fund to buy as many highly leveraged properties as possible. That felt to me like building a house of cards in a garden on a windless day.


    Hi Matt,

    Great title!  Smile

    I would add:


    Section 24

    Increased landlord licensing

    Scrapping of wear and tear relief

    Universal Credit

    Energy Efficiency Rules

    Tenant affordability being stretched

    Interest only mortgages coming to an end and unable to re-finance

    Stagnating rents and house prices and weakening of London market having knock on effect

    Institutional investors gaining traction

    ‚ÄčLandlord ignorance and apathy

    Here are some other threads that tackled this topic:

    Are the Four Horsemen of the BTL apocalypse gathering? 

    5 threats that should be on landlords' radar 

    Landlord planning - list of eventualities


    Advocating usage of credit card finance for business purposes is fraud!!

    Read any normal terms and conditions and they specifically state not to be used for commercial purposes.

    Nobody ever takes any notice of that.

    But what you don't do is advocate in public that you could do this.

    Plus lenders would regard mortgage applications supported by credit card deposits as fraud.

    I suggest you contact the police and report these fraudsters who are suggesting such investment strategies.

    Lenders take a very dim view of people creating funds which aren't genuine savings.

    Funds origin is always required.

    Lying about the funds not being credit card funds is mortgage fraud.

    There are ways of gaming the system with credit cards that don't involve fraud.

    But you need a few years to do it properly.

    You also need fairly high credit limits.

    Anyone who advocates using credit cards as a lying replacement for genuine savings is committing fraud.



    The raising of credit card limits and applying for more cards was really to facilitate delegates to buy more expensive courses, not property imho!

    No lender would knowingly allow a property deposit to be paid on a credit card.


    Yes I hadn't considered the cynical aspect

    Of course nothing to do with actually buying property.

    All to do with having resources for more expensive  couses.

    It's a great racket

    Just keep allegedly  teaching whilst nobody who teaches actually does it.

    And yet thousands of gullible people  pay for these ridiculous  courses when all they have to do is read PT where the content is accurate  and free to access to boot!!!


    How do you plan for several of these happening at the same time?

    You have an exit strategy. If things get too bad you sell up and get out of property. This just requires making sure that you can afford to do so.


    So when are you going to go ahead with buying your second property mrmpowell?


    Perfect storms are the opposite to the Perfect day

    You get both throughout your investment life

    So I have all the negatives mentioned  in my head and stress test, so if they do happen my contingency fund keeps me going for at least 12mths while I offload the asset,  restructure or more likely just hold up for a while and sit  the storm out

    The Perfect Day consist of values and rents going up and interest rates going down and no calls re maintenance

    So the weather patterns even out over time

    But 2 properties by and large are better than 1  so go for 2 then a 3rd then a 4th

    Ride out the perfect storms and the perfect days become more frequent in the years ahead


    Jonathan Clarke. http://www.buytoletmk.com