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  • Buy-to-Let

    The continued viability of BTL in 2019



    Welcome to the final day of "Landlord Talking Points".  All this week, Property Tribes has been delighted to present a week of content which focusses on the main landlord talking points of the year so far.

    The week has been undertaken in association with PT partner, Ideal Flatmate, and co-founder Tom Gatzen has been joining me throughout the week to discuss the leading issues facing landlords and which have engaged the Property Tribes community.

    This is how the week shaped up:

    Monday -  Launch of week and how good landlords can find quality tenants

    Tuesday -  Build to Rent and what landlords can learn from these big operators

    Wednesday - Brexit and the London property market

    Thursday -  Abolishment of Section 21

    Friday - Is buy to let still viable in 2019?

    Today, Tom and I discuss the topic that crops up regularly across the forums and in the media and that is, is BTL still viable in 2019 due all the increasingly unfavourable landscape for landlords:



    It is notable that this topic resulted in the greatest ever views of a PT video when I discussed this with investment commentator, Graham Rowan.  This video has registered over 100K views on youtube:


    What are your views on this topic?  Were you thinking of becoming a landlord and changed your mind, or are you a seasoned landlord who is thinking of selling up, or has already exited?

    We hope you have enjoyed this week of themed content and my thanks to co-host Tom Gatzen for being our guest over the week.

    Ideal Flatmate is a commercial partner of Property Tribes and you can use the Ideal Flatmate website to find new tenants.

    SEE ALSO  -         Buy to let still viable starting out in 2019?

    UP NEXT -             Is BTL still viable for first time landlord?

    DON'T MISS -        Is BTL dead or am I just late to the party?

    NOW WATCH:

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    As far as I'm concerned BTL is very viable in 2019, but the term BTL and Landlord should be considered carefully

    I'm a live in landlord, a resident landlord, a commercial landlord and am planning to be a serviced accommodation landlord next year. The term landlord is consistent although I choose not to go near a BTL mortgage or an AST. Many of those 160 pieces of legislation simply don't apply and I'm also free of lender criteria.

    I have passive income from my commercial tenant, tax free income from lodgers and a pretty straightforward investment. I have sacrificed growth, without leverage this will be moderate at best, but I am comfortable with that.

    Against general qualified advice I have incorporated, not because I am pig headed, but because specialist qualified advice confirmed that I am better off doing so. It was just a matter of asking the right, but relatively obscure, questions.

    Two years ago I was given the opportunity to become a vanilla BTL millionaire. I considered it carefully, but it wasn't what I wanted. Unless something strange happens with the economy I probably won't become a millionaire, but I am happy with the income I am getting from letting property.

    A note for Tom: There is a thriving rental market in South Wales, but I notice you only have 1 property available in Cardiff. This may be a market you wish to consider in the future.

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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer


    I appreciate the interview with Tom since I'm just entering the BTL market looking to build a portfolio to replace lost business income and there seems to be a lot of doom and gloom surrounding the PRS.
    In my 'outsiders' opinion the gloom can't last forever though and its only gloomy because of perceived needed change. In reality Im hoping the changes required probably wont be as bad as it all sounds especially if one is not a higher rate tax payer and one already maintains a professional property/letting business with certain standards. Even then there are ways around the higher rate tax issues.
    Investing principles will always be risk vs reward and as the old UK saying goes 'As Safe As Houses' is still valid today in my opinion.
    For example here's an alternative investment..
    Sell all your properties, take all the money and invest into stocks. Congratulations you now own the equivalent of pixels on a screen and a 'wager'.
    If you choose well maybe you'll see those stocks rise for the next couple years whilst paying minimum commissions until a major correction occurs and you see maybe 50% of your wealth wiped out and when that happens it takes much more than a 50% increase to recover the losses (more like a 100% increase is required to recover). I don't have the stomach to invest all my own savings in that ride. Property seems much more reliable even with the changing rules on the horizon.
    Or maybe you choose the care home investments where you own nothing except a lease? I don't trust those types of deals because if leases change you can become trapped with no exit strategy with an investment no one else wants to buy from you. I was looking at the similar 'storage unit investment' about 7 years ago that has now been exposed as a scam. It might not be the same as the latest care home opportunity although I'm pleased that I trusted my gut on that one and declined.
    Nope, for me good solid houses and homes are in demand and always will be and where there is demand there is profit to be made. Sure the government will take their slice although at some point they will move onto extracting cash from other sectors with more potential for the inland revenue department -- big tech and cashless transactions for instance.
    Im all in.
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    ManInTheMoon


    If you choose well maybe you'll see those stocks rise for the next couple years whilst paying minimum commissions until a major correction occurs and you see maybe 50% of your wealth wiped out and when that happens

    I can never fully understand this statement

    Lets take a closer look but lets look at it first from BTL

    You own a property worth 100K and it drops 50% in value  how much is it worth I think most would say 50K

    That is not quite the true story  unless you sell But why would you sell If the yeild was as high as it was the day before the property dropped in price

    so Unless you sell you have lost NOTHING

    Stocks and Shares are the same Nothing is lost unless you sell

    Most folk invest for the long term in both asset classes  The Value is not the most important thing unless you have to sell as I have said

    The Smart money would look at both assets at a 50% discount  and would buy them both

    I never consider the Capital Value of anything I have no need to sell But I am intested in the yeild

    I am selling nothing but I am buying You can never time a market if you are doing this your speculating not investing

    Its the Time in the Market that makes money  the longer you are invested the better you will do

    be an investor not a speculator and then you will see value




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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Stocks/shares, bonds, metals, property, businesses and cash all have their place in any well balanced investment portfolio. I can gladly ignore 'art and antiques' since that is too specialist for me and I don't have the time to study it.

    It is true DL that you only make a loss is you sell an investment whilst it is down although I think that many people including myself feel a sense of security knowing that if we needed to sell right now there would be a good return.

    I think the old argument between what is better to invest in stocks and shares v's property is always going to be around and as you probably already know, its a matter of personal choice and opinion and what investment suits your needs at any given time.

    I mentioned 50% loss in stocks as an example because that does and can happen. I haven't seen that happen with UK property especially outside of London and the rental income should not fall that much even if the property prices fall should they? Whereas dividends are paid out based on a percentage of the share price which will fall if the share price falls. Plus dividend values change and you have no control over that.

    In these worse case scenarios I think property is the better investment and in both cases a 50% fall is a disaster and will require more than a 100% gain to recover value back to what it was before the crash.

    Also, stocks can go to zero and large firms can go bankrupt as they did in 2008. Such a catastrophic event is rare but it does and can happen as we have seen.

    As for looking at a market and investing when its down that is fine when you have the cash reserves available to invest or excess cashflow available OR if you saw the crash coming somehow and sold beforehand.

    Its all down to personal preference and need. On the other hand I heard it be said that to be successful you need to be a master of one thing only. Ignore the rest as those are distractions.

    For me, property is my next move rather than more stocks to even out my investment portfolio and because my circumstances have changed recently and I feel that I require more certainty and cash flow from investments going forward. I recently sold a percentage of my stocks to move into property but I must admit I don't enjoy checking the stocks tickers every week or so especially if there is a bear market trend. With houses I believe I will be content when those are tenanted with good tenants to the best of my ability and generating monthly cash flow. And if I have any spare cash available in the future I might even buy more stocks :-)

    Property portfolio is my next goal. I look forward to your posts DL and hopefully I'm learning a few tips from you with regards to property investing and being a successful landlord. 

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    ManInTheMoon


    My tip is a simple one Buy on Yield and never sell

    I think I could say the same about other Investments too

    My simple thinking is yield provides the cash for deposits and other investments

    and of course it give you the funds to put bread on your table

    If you and I invest long enough you will make money even when crashes come

    But you need the crashes to buy bargains a crash is opportunity



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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    ``My tip is a simple one Buy on Yield and never sell``

    My tip is also a simple one 

    Never  restrict yourself to buying just on yield and sometimes its very judicious to sell


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

    My additional tip would be not to constrict yourself to just BTL. Base your ideas on what is in front of you. If its a refurb and sell, do it, if it's a development, do it.

    Just sticking with BTL is ok, but there are so many other angles with property, why restrict yourself?
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    PS - DL your videos are in my youtube 'saved' folder and your 8% rule and your tenant vetting process is now firmly embedded into my brain :-) 

    I just wanted to say its also an honor to be able to learn from you as a 30yr+/100 property investor/landlord that's some achievement.

    Thank you.

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    ManInTheMoon


    Im just the same as any other Landlord out to make a living Nothing More

    Kindest Regards

    DL

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.