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Monday, June 23, 2008

Buy-to-let meltdown won't last forever - but some landlords will be badly burned.


As someone who likes to bring good news, it's difficult to come along and say we told you so.

But unfortunately we did.

The team at Property Hawk has been warning landlords ever since its launch in early 2007 that investors should proceed with caution. We have also repeatedly warned against new build city centre apartments, money off deals and supposed Below Market Value (BMV) property investments.

Anyway, moving on (and not getting any pleasure from the fact we were correct in the reading of the market and the quality of our advice.)

This article in the Telegraph
relates the split in the market between established landlords who have built up a portfolio over a number of years and those novice landlords who jumped with both feet into the dream of great wealth and investing in new builds over the last couple of years.

Unfortunately the latter investor type has got himself stuck well and truly in the dirt. These novice investors have the unfortunate dilemma of, either running at a rental loss over the next few years and supplementing the loss with other income. OUCH!!!!!! or selling at a loss . OUCH!!!!!!!! again.

As we have been posting on the site over recent months, the reality will be that after all the fallout, property investment opportunities will present themselves in 2009 and 2010, for cash rich property investors.

Whether that be as property or property focused equity shares as the Income Monkey has been posting about.

The article also confirms that Buy-to-let will rise phoenix like from the ashes of the current meltdown. But between now and then many landlords might find themselves taking some serious financial heat.

1 comment:

Anonymous said...

We started a property investment business 3 years ago but have gone from strength to strength.

This has been purely down to avoiding all the tempting off plan and new build deals that seemed quite lucrative at the time.

I pride myself in not going with the flow of having super looking properties in city centre locales but in the less affluent areas.

The problem is some 'novice' investors think they know better and do not listen to sound advice.

LynG