Sell or Keep BTL

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    Sell or Keep BTL

    My BTL is in London 7.5% rental yield.
    As the rental market and the property price seem to be static if not dropped.
    Is it better to sell or keep the BTL (do it up and relet) ?

    #2
    I can tell you in 5, 10 years time. Currently any other answer would be a guess, whoever is guessing.
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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      #3
      That’s a far better return than anything else.

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        #4
        Originally posted by Neelix View Post
        That’s a far better return than anything else.
        I agree! My non BTL investrment - is slightly less return an it is a longer investment and return is not guarantee <-- but what is? I am trying to weigh up the options, have not much to go on...

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          #5
          Much depends on whether you are cashing in simply because the market has gone soft in London and do not expect the trend to reverse : whilst it is true that the London rental sector has lost much of its froth compared to the last five years , everything is cyclical and indeed if the property is in good condition in a good location then personally I would stick with it since clearly the return on any cash profit would achieve a return of a fraction of what you are possibly getting or get on the property, also there is still the prospect of capital growth.

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            #6
            Originally posted by loanarranger View Post
            Much depends on whether you are cashing in simply because the market has gone soft in London and do not expect the trend to reverse : whilst it is true that the London rental sector has lost much of its froth compared to the last five years , everything is cyclical and indeed if the property is in good condition in a good location then personally I would stick with it since clearly the return on any cash profit would achieve a return of a fraction of what you are possibly getting or get on the property, also there is still the prospect of capital growth.
            Also, to add in the mix, the council has gone bankrupt where my property is and it needs serioud investment and regeneration.. and I agreed it may take a few years to get back to where it was - I am in two minds as to whether to keep it and hope to find some 'good' tenants but If I buy another property the rental yield may not be as high and no gurantee my luck with change regarding tenants. PS The capital growth has dropped by 10%.. my main concern is that the geting some good tenants may have to lower the rent?

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              #7
              I am assuming that you are referring to Croydon , if I am correct then much depends on the specific area of Croydon your property is located in.
              The rental sector for the general London area in terms of gaining top rents has softened in recent months and as already mentionedmuch depends on the location and quality of accommodation. No one can crystal ball gaze but Croydon retains USP’s in terms of ease of access to London, Gatwick and areas going south so quality long term will help in yields and potential capital growth, but if you have deep misgivings then test the market for what price you might achieve , if it is insufficient then try and ride it out.

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                #8
                loanarranger - Good points.
                It is 15 minutes walk from Norwood Jn station. There has been not much changed on the propety value for the whole development in the past 6 years (even with the newly renovated properties), I am not sure whether it is the market or there is a ceiling to property value in the area? If there are no capital growth then I am thinking of selling and hope to get the growth elsewhere. Does it sound mad to pay 100% more for another property in a slighter better area with a 5- 10% increase on rent? and hope for capital growth?

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                  #9
                  Paying 100% more for another property for 5% rent increase means your rental yield is down to 3.75 % . This is not a good return.

                  Is you current property located in a place with large negative point for rental ? such as next door to fire station or fish n chip shop ? Or high rise building with cladding problem ?

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                    #10
                    Agreed not a good return but I was hoping the capital return will be better if I buy another. If I redecorate my cuurent property etc and can find trenants (apparently according to a local agent - some renters they know are now buying, due to easier to get a mortgage). Also, my property is not close to a station, and unemployment and the developement looks a bit tired and he said it is not as good as it used to be ..and I am not sure whether I will be liable if I use a managing agent if things go wrong but the return is good if it can be let out.

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                      #11
                      Every property has a natural ceiling irrespective of whether it is for sale or rent, it is only by undertaking due diligence in researching the various web sites that one can, based exactly on a like for like, what properties are achieving , unfortunately property owners believe that by spending money will automatically achieve either an increase in value or an uplift in rental , sometimes if the property has been neglected and fallen in value or achievable rent will an uplift be feasible .
                      I know the area well in which your property is located and clearly the rental market even for A1 properties is soft but equally the same can be said across many of the areas of Greater London indeed a report published shows that the market has fallen by a further 4.8% compared to the previous half year of 6% which is in marked contrast the majority of the rest of the U.K which has either remained flat or increased.

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                        #12
                        I am going to update the property and good to know the traders are have contacted are very vbusy for the next 2 months - more void period?

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                          #13
                          Question, is there any reason why some property prices in some parts of London is 4x more than other parts of London but the montly rent is only £200 pcm more?

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                            #14
                            It may be attributable to the quality of local schools , given your property is in Norwood I would give Dulwich as an example of cost differential

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                              #15
                              Good comparsion, I still do not see how I can get a better yield with by selling and buying anoether? as some other had suggested to sell and wait for the property market to fall..

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