Property Markets

[andrewducker]

Just throwing around some figures and briefly considering buy-to-let. It makes _no_ sense in Edinburgh, as far as I can see. Monthly rent for a decent place like this is £900 for a three bedroom place. Wandering over to a mortgage calculator, I note that for £900 mortgage repayments I could borrow about £130k, on a £160k place. Which would not get you anything like as nice a place as that, nor as close in.

Baffling - is buy-to-let as poor an investment elsewhere in the country?

Comments

[ami-bender.livejournal.com]

It does still make sence, but only if you have a lot of spare cash. If lets say you ad a spare 100k. you then buy house. Rent covers mortgage and repairs, plus little left over. You then have a good investment as real return is when sell house. The problem with buy to let is how much you have to pay bank.

[andrewducker]

That makes sense if property prices continue to go up as they currently are. At the moment the differential between the cost of the place and the rent you get isn't massive - but if it gets much bigger then it won't be a great investment any more and the market will stall.

At which point the whole reason people are buying flat (to make money by selling them on) fails to hold any more, so people will start to sell them on, prices will start to drop, and if we're not lucky we'll end up with a crash.

[ami-bender.livejournal.com]

Yup. But the market still has a long way to go before it peaks. Edinburgh is unusual in that everyone wants to be in the centre, which will keep it high. And judging from examples in the states and london, crashes tend to be temporary glitches. As far as I am aware big losses tend to be made primarily off of paying a lot more then valuation