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  • Buy-to-Let

    Yield is the most important thing in property - discuss!

    I think going forward Yield is the most important thing in property investment if your using leverage


    Learn Change and Adapt ?????

    Yield is naturally  important but not always the most important

    Say with a good yield you get  £300 positive cashflow pcm which is just over 10K in 3 years

    Buy a 100K property at 90K though and you get that 3 years yield worth in just one hit

    Spend 10K on a refurb and put 20K on its value is another 3 years yield in just one hit

    6 years equivalent of yield within just a month of buying is more important than yield often 

    Aim for both of course yes

    But i have forgone a decent yield because the better return is in the building itself -  not the tenants rent


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

    Yield is king JC if you cant pay the Taxes ect Capital growth is useless

    Yield is the fire that keeps the pot boiling you cant boil eggs in cold water

    You need enough to pay your way


    Learn Change and Adapt ?????

    No Profit is King - Yield is a just one servant of the King . There are many servants which serve the Profit King

    I didn`t actually refer to capital growth in my post -

    But that is  yes another servant - works in the back room mostly biding his time

    No I was taking about the servants of.....

    1) Buying well at a discount - This servant is busy on every deal

    2) Refurbing - These servants are very busy and hands on . Rush rush rush

    Many investors have a job / savings and don`t specifically require a good  yield servant

    Capital Growth is  not useless . Its very useful if it doubles in price and I sell as to pay my taxes

    An average yield  will suffice for many . -

    Yield servants are  slow and steady workers yes but do take their time sometimes

    If I see a deal at 5% yield and can make in one month as much I would in 6 years with a 10% yield then I would consider the 5% yield  option as being potentially the best servant to run with on that occasion

    I wouldn't reject a 5% yield just because it was 5% if the above applied- Would you?

    The pawn servant  in chess can sometimes be the most powerful piece

     Employ many servants to give the KIng his profit

    Think laterally


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

    build to rent is the way JC much more profitable than BTL you can have both 40% capital growth day its finished

    and a great yield of over 10%

    what more could and investor want

    Its the new BTL


    Learn Change and Adapt ?????

    Classic deflection tactic  again DL

    Don`t continue the conversation we were having  -

    just start on something new and hope JC wont notice

    Build to rent is great   - but we were talking about a  different strategy


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

    your not moving with times JC

    The stuff you are talking about is just an old outdated way of property investment

    Its past its sell by date  


    Learn Change and Adapt ?????

    I can ride the thinly veiled criticism

    I understand your focus has changed and build to rent is the only game in town for you now 

    BTL only part worked for you so I understand why  you  have fallen out of love with it

    But for the 1000`s still doing BTL successfully despite the new rules  please  explain how the principle of buying a 100K property for 90K spending 10K on it and making it into a 120K property is somehow outdated now ?

    If your dismiss that strategy  without explanation then I feel you lose the crowd


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

    Your classic strategy  is what most bog standard  LL aspire to do.

    They are as far away from BTR as they could fly to the moon! !

    Then S24 comes along and upsets the strategy somewhat

    Now to make it viable they have to buy cheaper; refurbish for less and hopefully add more value and all that just to be in the same position  as they wold have been before there was S24!

    Not such an easy trick to pull off!

    Buying in a company is problematic.

    Which is why there have been far fewer mortgaged LL  entering the market.

    The advantage  an experienced  LL  like you has over the newbie is you have your experience and can usually add a bit more 'skin in the game' to clinch the deal and make it viable under S24 restrictions.

    But the basic strategy  is still sound and is one that most LL  will consider as their only strategy. 

    Even if I could BTR I would just not be interested

    Guess I'm a very lazy LL!!?

    All a LL  has to do is find those deals according to your figures with S24 in the mix.

    S24 is of course just another tax and if the deal would still work within a LL  financial set up then it would still make sense buying in your own name.

    Just has to be harder to find a deal that stacks with S24 factored in

    Not impossible  as you suggest.

    Like anything with BTL you have to be in it to win it!

    I reckon the key to beating or rather ameliorating   S24 is to have just enough 'skin in the game' to make the figures work.

    Even more now than ever the buying price and refurbish costs are shown to be the absolute key to future viability.

    Buying right is the hardest thing to do.

    If it was that easy everyone would be doing it

    Well S24 and extra SDLT has severely  restricted that situation which of course was GO intention.

    For any LL  needing a mortgage the figures are now far harder to make viable.

    Which I guess is good news for existing LL  as they will have less competition etc; etc.


    My opinion is simple

    BTL with leverage is now just Taxed so high its not worth doing

    PRA Lending and S24 have yet to take real effect

    If Landlords borrow via a company they are not a great deal better off

    The reason Most BTL will not go into Build to Rent is because they don't have a lot of money to start with

    Build to rent with cash is very different

    I walk around all the rules S24 brings I don't Borrow so PRA has no effect JC

    I also avoid Stamp duty to a great extent

    Development without leverage is much more profitable than the Old ways of BTL

    I built my business on BTL but that was yesterday not today

    Time to move on if you really want to make a lot of money

    Donald Trump did not build what he owns today buying old property and doing it up

    he did it by building new developments


    Learn Change and Adapt ?????

    I don`t dispute build to rent is attractive ..Never did . No need to go over the same ground

    But BTL is still attractive to those who dont want to or are unable to  build to rent

    Most people would take 20K if put on the table in front of them

    You say these people are outdated and past their sell by date though . That`s not true

    Yes in the past they  may have made  30K on the same deal

    But 20K is 20K .

    What you appear to be saying is 20K is not enough profit . 30K was in the past but not now if its only 20K

    But now you want more like 50K with build to rent

    I can live with that but that doesnt mean BTL is outdated and past its sell by date

    BTL is for the masses

    Or are you saying no one  should even get involved as 20K profit in a month is just not worth it

    But some people work 9- 5 for 48 weeks a year for 20K so clearly it is worth it to many

    BTL is an excellent gateway to riches

    What i would like to know .......

    You have been investing in BTL for 30 years or so

    But in the last 2 years since S24 you have decided BTL is dead and build to rent is more attractive

    The figures you have shared make build to rent much  more attractive even than BTL was pre S24

    Why didn`t you therefore start build to rent 5 years ago ?

    Would someone who had been building to rent from 2012  - 2015  say to you in 2014

    DL ...BTL is outdated  and past its sell by date  why are you still doing it ...... I hope they wouldn't say that

    But that is what you are now apparently saying to all the 1000`s of BTL`ers out there

    You found a new toy so you are disparaging about any one still playing with the old toy


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