Would you invest £30k in buy-to-let now?

[contractor79]

Imagine you have £30k already in premium bonds. You are tired of receiving maybe the odd £50/month from this. You already own your own property and don't need to reduce the mortgage on it.

Would you do a buy to let on a £100k flat? £25k down, £5k for transaction cost, furniture, fittings? Get £450/month rent in? This would cover the £75k buy-to-let mortgage.

Long term it could be a good deal. Rents would go up over time. Property value would increase over time. All for a £30k investment now.

Thoughts?

[northernladuk]

In my mind you have answered your own question there.

If I was in your position I would be struggling to find a reason not to. Those godawful new flat complex's with smallish 2 bed flats are going like wildfire. A week later there is a sea of to let signs and 2 weeks later they are all down. People can't get enough up here.

You could of course use your contracting knowledge and buy near a large knowing user of contractors and offer it out to the contractor population for pretty secure income.. etc etc...

Seems pretty good plan at this moment in time...

Just a note. A few people I know have been contacted by these Land Banking organisations that are cropping up all over the place. They are asking people to inviest in land with building permission and will wait for the price to rise. Personally wouldn't touch them but the fact there are a few cropping up there must be people out there that strongly believe property and land is on its way up...

Watch for CGT on property if you are in for the mid term though

[ChimpMaster]

Buy property in India. Inflation at double digits and house prices rising fast.

Would suggest China but some seriously strict rules there.

[sasguru]

What would Jesus do?
I think he would give it away to worthy causes, and I don't think he'll love you if you don't. Because he can see inside you, so following the rules isn't enough.

[MarillionFan]

Imagine you have £30k already in premium bonds. You are tired of receiving maybe the odd £50/month from this. You already own your own property and don't need to reduce the mortgage on it.

Would you do a buy to let on a £100k flat? £25k down, £5k for transaction cost, furniture, fittings? Get £450/month rent in? This would cover the £75k buy-to-let mortgage.

Long term it could be a good deal. Rents would go up over time. Property value would increase over time. All for a £30k investment now.

Thoughts?

It depends on how many years you look at it for, with the interest you are paying.

YOU MUST figure in the cost of buying the property, solicitors, arrangement fees etc and the cost of selling, solicitors + selling fees.

To me, 70K at 4% = £2800 per year. Versus £450 x 10 (include unlet times) = £4500. £1000 to buy in fees, arrangement fee of £1500 say, cost of doing up etc means you will lose year 1, you will also lose on year(sell because of costs).

So you're making £1700 before costs on £30k. So lets call it £700 per year.

£30K, high interest bond paying 5.1% = £1500ish per year.

Lets say 2-3% Capital growth.

So you work it out and decide. I'm thinking about it, put cash is king at the mo!

[TimberWolf]

£30K, high interest bond paying 5.1% = £1500ish per year.

Where do I get me one of those?

[contractor79]

Where do I get me one of those?

I'd like to know that too.

Back to the BTL issue. Yes when you take into account transaction costs - solicitor, surveyor etc. and the Capital gains tax bombshell one day if you sell it... it makes the whole thing rather unattractive. Less hassle to leave money in Premium Bonds and hope for a £1m prize,

[thunderlizard]

What would Jesus do?
I think he would give it away to worthy causes

John 12 1-10:

1Six days before the Passover Jesus came to Bethany, the home of Lazarus, whom he had raised from the dead. 2There they gave a dinner for him. Martha served, and Lazarus was one of those at the table with him.
3Mary took a pound of costly perfume made of pure nard, anointed Jesus’ feet, and wiped them* with her hair. The house was filled with the fragrance of the perfume.
4But Judas Iscariot, one of his disciples (the one who was about to betray him), said,
5‘Why was this perfume not sold for three hundred denarii* and the money given to the poor?’
6(He said this not because he cared about the poor, but because he was a thief; he kept the common purse and used to steal what was put into it.)
7Jesus said, ‘Leave her alone. She bought it* so that she might keep it for the day of my burial.
8You always have the poor with you, but you do not always have me.’

[contractor79]

Don't rape and pillage Holy scripture on this thread please, thanks.

[northernladuk]

I'd like to know that too.

Back to the BTL issue. Yes when you take into account transaction costs - solicitor, surveyor etc. and the Capital gains tax bombshell one day if you sell it... it makes the whole thing rather unattractive. Less hassle to leave money in Premium Bonds and hope for a £1m prize,

Yep. Less hassle than someone paying your mortgage so investment costs you a few grand and the house prices rising 40-50% in the next 5 years or so and giving you free money

Capital gains is on a sliding scale over time, all to do with the value of money. £10 10 years ago is very different to £10 now. If you keep it long term it will slide to nothing..

And anway... I would be happy to pay captial gains on my PROFIT! Profit - captial gains still = Profit.

I wouldn't be so quick to write it off at the moment.