Would you buy this 180k property with cash or a mortgage?
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- čas přidán 2. 08. 2024
- Running you through the top line numbers of a property found on Rightmove near Birmingham. Lets have a look at the pros and cons of buying this cash vs using a mortgage.
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Excellent explanation! I had asked months ago why interest only mortgages…this video clearly explains it. Great job you two. ~Cara 😊
Properties very rarely double in value in 10 years, and secondly, inflation eats away at a lot of that.
It's not strictly doubling every 10 years - but the growth over the last 53 years according to the Land Reg house price index is as follows:
Since 1970 here are the average increases of all house type price per decade.
These averages will of course differ based on area / property type etc.
1970 - 1980 = 390% increase
1980 - 1990 = 202% increase
1990 - 2000 = 45% increase
2000 - 2010 = 98% increase
2010 - 2024 = 68% increase
@@PropertyCouple Yes, it's an average across the country, so you most certainly cannot rely on that. In some areas of Liverpool, where I invest, prices have barely reached the level they were at in 2007, and in the 10 years from 2009 to 2019, they were down. You absolutely cannot rely on property prices doubling and therefore it is highly risky to assume they will and to base your calculations on that assumption. You say property is a great asset class, but it isn't - it's OK on a good day, but not great. Please don't forget that you two are doing this as a full time job - you are adding a lot of value, so for the passive investor, what you are saying simply does not apply. Also, you need to factor in your own personal incomes: if you were both working as e.g. doctors or lawyers, your joint NET salary would be nudging 200 grand a year. You're exaggerating how good property is, both as an investment and as a job, UNLESS you are a developer.
Awesome explanation!
I love the points that were brought up. I really enjoyed this video. 😊❤
Glad you enjoyed!
Thank you. Great vid
Wow Lia is dreamy in this vid 😍 and, good explanation, if I were in a position to do any of this, I might be inclined to do it via a mortgage instead of cash! It all depends on the situation 🙂
I managed to put a big deposit on my house and paid the mortgage off but I missed putting that deposit on a couple of properties from your example and now the houses have grown even more lol. Hoping to put a deposit on another house in the near future and living in that with a normal mortgage for me fingers crossed. Cheers for the videos giving me some insight
Nice, good for you!
Well explained props
Good info..thanks.
Glad it was helpful!
In the US, a guy named Dave Ramsey was a multi millionaire with several mortgages that were due by the bank. The banks demanded that he pay all the mortgages at once and he became bankrupt. Later in his life, he decided to pay mortgages in full. He’s a billionaire now but he learned the hard way.
Will you decide to stop using mortgages anytime soon and hold onto the mortgages that you have?
Can the banks in the UK demand that you pay all mortgages at one time?
It’s something to consider.
Completely off topic, but I love Ach's hoodie! It looks cozy but still smart!
haha thanks
Can you please make a video on modern method of auction
"every ten year it doubles" yep also the purchase power of the money halving every ten year, so you are on the same place.
If you every thought about it.
At least keeping your money valuable.
Well, technically, it is only doubling because money is worth less due to inflation. The good thing about this is the cash flow on top of wealth preservation.
You’re not in the same place at all. Think of all the cashflow in 10 years that can be generated along with the capital growth.
@@PropertyCouple In terms of cashflow obviously not. But In reality the price double myth is not real since inflation. The doubled price of the property has same purchase power.
The interest for the mortgage?
I know a lot of property experts say that houses generally double after 10 years, but I’ve had my property for 20 years and it’s only worth £50,000 more than I originally paid so how does that work out please?
Area and the price you paid will of course affect this. Some areas will grow more than others in capital appreciation.
@@PropertyCouple There's a perfect example of that in my own neighborhood here in the US. When we built our house in 1997 we paid $149, 900. Shortly after (economists had started warning as early as 2002) we entered that housing bubble where our same model was selling for $275k or higher. People who bought at that time then saw the value of the property actually go down relative to what they paid when the bubble burst. We are so thankful that we didn't get caught up in all the frenzy of the expanding bubble and just "sat" on our equity and rode it out, because it would have been so easy to take on more debt with all the home equity loan offers we were given daily. Another factor that worked to our advantage was that our mortgage interest rate is very low compared to a lot of our neighbors (3.75% v 7% or higher). We never viewed this as an investment though -- we intended this to be our forever home, so that also had an affect on our decions along the way.
Have you thought about buying a rental property in the US such as Florida close to the parks?
No we haven’t. We don’t know anything about the US market.
Maybe it’s better to use the £ symbol in the graphics during the initial minutes of the video.
Great video. BTW, Christos Anesti for those celebrating Greek Orthodox Easter.
Thank you :)
This is all well and good until inheritance tax kicks in and your family and your kids get royalty F’ed by the government.
So many property people learn this the hard way
Have you ever heard of a limited company? You would be foolish to put all of the properties in your personal name...
Education is key in understanding how to structure things.
@@PropertyCouplecan you explain?
Can I say 1 buy to let cannot sustain a living with the cashflow? One might need more than depending how much you need? Also at the moment, with 200k how many buy to let can you leverage up to with the current interests and rental market, is there some general rule of thumb? Thanks
This depends on the purchase price and refurb costs (if you use a BRRR) model. Sorry it’s not necessarily a simple question to answer. But £200k is a fantastic position to start with! If you know what you are doing you could turn that into some great cashflow.
Was that interest only?
Yes
That deal is ridiculous for 900 rent, you might have 10 percent letting fees to pay each month and I always put aside 100 a month for maintenance
Yep plus tax at min of 20%.... its basically breaking even or loosing money. Terrible deal
This was a demonstration of cash vs mortgage and how it affects numbers rather than showing if a deal is good or bad.
I can answer this question without watching the whole video. If you’ve got £180,000 in your bank account then buy the house with a mortgage!!!! Why? Because you only need to put down a 25% deposit, in this case £45,000. That means you’ve got £135,000 left to buy more houses again with a 25% deposit!!!
Never heard so much rubbish in my life .
To buy a property for £190K as to be in a poor area .
Which will generate poor Tenants and problems.
Far to many problems.
The buy to rent market is dead .
You video didn't mention taxes , fees and any expenses.
Let alone void periods or bad Tenants.
Just more bullshit from another CZcamsr.
Mortgage = Debt .
Who want to be in debt when they are Pensioners???
There is a reason why landlords having be selling up !!!!!
Simply question...
Do you own any properties 100% out right .
I own over 16 properties, commercial buildings , land , garage and parking spaces.
Payed my last mortgages of 3 years .
Mortgage free .
The point of having Tenants is to pay your mortgages off , not build up more debts .
You own nothing!!!
Unless your mortgage free , so it's the banks which own the property.
Always makes me laugh when a landlord says , they own properties, but have mortgages.
Bullshit makes the world and debt makes rich people even richer.
Plenty of fools taken in by bullshit 😂😂😂😂😂😂😂
Such a shame you cant help people in your own country???🤦🏽♂️🤦🏽♂️🤦🏽♂️🤦🏽♂️🤦♂️😭😭😭😭
Whey are they from?
Buy several houses with mortgages. Simple😊
It could be that simple yes. So many different options and ways of doing it depending on one’s circumstances.