dothesums blog

Having read Tony Levene’s article in the Guardian on line ‘Buy to Let investors fear they may be left homeless’ dated 22.03.08, is it any wonder that these landlords get everything they deserve? How can educated people be so consumed by greed that they deceive the banks and inflict higher loan charges on the rest of us.

For two, or three, years now we have been warning our clients that new build properties, city centre, or otherwise, are unlikely to be profitable.

Also, that purchases with no deposits are doubtful as an investment and dubious in law.

There are, and will continue to be good investments during the credit crunch, because prices will be softer.

Choose the post code areas with the highest forecast growth.

Check tenant demand in those areas.

Work out the combined net cash flow for each year and add to it the projected growth in the value of the property, to get the return on your investment.

That Mr.Morris is seeking redress from his valuers, when he bought without seeing the properties, is the same as the gambler who tried to sue his bookmaker for not exercising a duty of care, when he ran up gambling losses of over a million pounds. Delusional is the word that springs to mind. Where was his duty to himself? If you believe the salesman to establish property value and estimated likely rental income, without even seeing the property, then you only have yourself to blame. These two investors were motivated by greed and the prospect of easy money. It has been an expensive lesson for them, but in the end the real costs will fall on the rest of us.