I feel poorer but in many ways I am better off.
Do landlords need to look at the current decline in property prices through different eyes?
What do I mean by this?
Well as property prices continue to fall I lose thousands of pounds each day ( but only on paper).
(This economic gloom can start to bring you down, do other landlords feel the same?)
However when I look at it from a different perspective my financial situation starts to look rosier.
Let me explain. All landlords have that 'king in the counting house' moment every now and then, that 'if I sold all my property portfolio and paid of all my BTL mortgages - how much cash would I have?'
This used to make landlords feel warm and good about life ( mmmmmm -wealthy ), but all we keep feeling now is ' Mmmmmmm - not so wealthy - not nice!
However in reality this wealth was only ever on paper and if like me you were a landlord looking long term with their property portfolio then current property prices have no real value. The value of an asset is only truly important at the point when the asset is sold.
You see I wasn't planning on selling any of my property investments for at least another 15-20 years, which gives plenty of time for capital values to re-cover.
Looking at my situation logically here and now, in many ways I am better off each month. As it is my BTL mortgage payments keep dropping because they are on trackers, so my rental profit keeps getting bigger and bigger.
With further interest cuts on the way the future for my cash-flow gets better and better.
I can only see rental demand increasing as fewer properties are built, I see a steady increase in rental amounts over the next five years.
With unemployment rising in the building industry the supply of trades will increase bringing rates for trades down which should lower my maintenance costs.
Therefore for many landlords without heavily geared portfolios and with long term investment strategies these might be seen as the good times.
Hawkeye
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