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The Telegraph 'big up' BTL investing here.The article puts forward an investment argument that describes investing as a one way ticket to a fortune.
NB. These same newspapers were writing of the 'Death of BTL' a few years back - the fickle bunnies they are.
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I have been in the rental business for nearly 20 years. I started just after the last crisis and am happy with my portfolio as it stands now. I started with absolutely nothing except my wife, an old piano and some savings which we sold to pay for part of the 5% deposit for our first apartment, which then became part of the portfolio. I have lived abroad, whilst continuing to maintain my properties for the last 7 years or so, which included the crisis. I totally ignore everything I read in newspapers, or hear on the news or on the internet about property values or interest rates etc. I have done much better than they have predicting the outcome and keeping my mouth shut about it than they have. However, what really concerns me from the article is how it refers to property investors being pariahs. I beg your pardon? When did this happen? When did making an investment, or providing a service become disagreeable to the rest of the population? When did we all become communists (again!)? You might as well hate Tesco for buying all the carrots, or certain Arab states for having all the oil. It seems we are the new bankers, or, worse still, politicians (I am seriously contemplating suicide now...) I can understand the arguments, especially if I close one eye and squint hard with the remaining one, but seriously, aren't there those more deserving of venom and antagonism? Are there not other reasons to get all in a froth? I don't really read the Telegraph myself, but having been brought up to call it the Torygraph, I found it particularly surprising that this bastion of Capitalist Conservative ideals harbours such impressions of property investment and has readers who regard us as little more than rich pond scum. I am pleased I no longer live in green Britain and I don't mean green in the eco friendly sense...
Agree... most people, and I mean most people in the UK in general would rather see us on the 'Road to Serfdom' than live in a capitalist democracy. Communists / socialists whatever, I call it jealously. I can't blame you for fleeing abroad!
The only way we can understand someones motivation is to put on their shoes. As landlords with a portfolio of property it might be difficult to understand the person who works sixty hours a week, to barely afford to pay rent and food.
Maybe if we swapped places we might consider the viewpoint that landlords are pariahs as perfectly justifiable.
It strikes me that the boom, followed by restrictive lending practices has made the majority of both non and property owning population relatively worse off.
Landlords and property speculators have certainly helped to exasperate this situation.
Therefore, it shouldn't come as a surprise when accusations fly.
This criticsm is one small down side to having chosen to partake in something that has delivered many ups to the majority of us.
All we can really do is act in a way that recognises our own fortunate circumstance. Each individual landlord must judge themself as to whether they deserve the label of 'pariah' or not.
I find it ironic that, young first time buyers aside, many of the people bleating about today's prices and the upward trend, are the very same ones who happily sold their properties during the boom for a profit, or panic sold them during the crisis, thereby contributing to the glut of property on the market and the downwards pressure on prices. Many people panic sold property, without regard for what it would do to the property sales market, nor what it would do the rental market. Those with sense realised that rents would soar and held onto their 'negative equity' property to rent it to those who had made themselves voluntarily homeless. Now the trick is to work out when the prices will be at their highest, before interest rates start to rise and rents start to fall...
Owning your own home isn't a right, nor is owning a jet plane, a hockey team, or other things that some people might consider expensive, or out of reach. It is ridiculous to live in a capitalist society and then complain when some people get rich and others get poor by taking risks and working hard, whatever they invest in. Having started with nothing, I can say that my first purchases were risky and required a lot of effort, working 3 jobs and being creative, alongside my wife. Despite what you read, it is way easier to get a mortgage for a rental, or a first time buy right now than it was, say 20 years ago. It is easy to get clever with your finances and save money, even if you are poor. Giving up smoking can save a couple who smoke 20 a day each just under £6000 in a single year (if you don't believe me, just work it out yourself). This is enough for a deposit in many places. A couple of years ago, people buying houses and flats might have looked crazy. Take another look at those people, they just might be the smartest people you know. One of the savviest investors in the world said "try to be fearful when others are greedy and greedy only when others are fearful."
Good advice when looking at what just happened and sound advice for the road ahead. Be one step ahead of the game, ignore the papers, talking heads and internet sages (myself included) unless all you want to know is what has already happened and what you did wrong...
Thanks for your thoughts Loaded,
But what makes you think that the downward pressure on property prices was down to a glut of property on the market? I have seen no data to support this.
Supply fell after the crash, but more so, demand, due to a hit to confidence and more restrictive lending criteria.
Neither do I fully understand why you do not see questioning equality within a capitalist society as worthwhile or relevant. There is no reason that a market cannot evaluate what it is trying to achieve through its endeavour. Money is surely only a means to achieve a goal, and not the goal itself.
Surely we all have a responsibility to help as many as possible to share our fortunate prosperity?
More a contributory factor really. Before, on the cusp and during the beginning of the crisis, many properties were put on the market and there were many that had been there already, despite not necessarily being sold. Buyers therefore had a lot of choice and therefore sellers a lot to compete with. Those properties that did sell at this time did so at knock down prices, I know, I bought a few.
I wouldn't disagree that during the crisis there weren't times when it was hard to borrow, but I (the landlord pariah, who apparently no one would talk to if I ever did get invited to a dinner party!) managed to get my grubby mitts on about another million during this period, albeit it admittedly at a lower LTV than previously enjoyed and not on such favourable terms. Apparently I was not that persona non grata (I believe the new terms is Subprime).
As for helping others, I do so in my own way. I wouldn't presume to bore anyone with details and use this forum for bragging about it though. That is hardly the point. Isn't it the responsibilty of the government to look after the needy and dependant with my taxes (amongst others' naturally, I can't claim to bear the brunt all myself!)
As for others less fortunate sharing in my prosperity, well, I dare say I would buy you a drink if we met...
By now you might, or others might have come to the conclusion that I am a Maggie boy type - but quite the reverse in fact. I was brought up to dislike Margaret Thatcher by my parents, who were definitely Bolsheviks and Humanists, both fierce Labour party supporters (the real Labour party, not the one we have today). My father was a founder member of SANA and the CND, but he also did things to make money. One of his wisest investments was in my brother's and my educations. Both in school and outside of it. Nor am I a troll, trying to get a bite. Sometimes my opinions are annoying to others. But they are just that. Opinions. I read this forum and blog daily and enjoy it immensely. I usually do not weigh in for fear of becoming that which I most despise. An internet bore :-)
P.
Hi Loaded,
I fully agree with your sentiment on the importance of sharing opinion. Hearing the viewpoint of others helps us to understand ourselves, and by doing so better judge how we should act.
Your opinions are always welcome here, as you are definitely not boring. ;-)
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