Hi again everyone, hope you are well.

A few "easy" questions for a few experts out there....

1, Please explain "Yield"?

2, Do you think the BTL market will be going well for the next 50 years? Its on going isnt it, always property for BTL'ers to buy to let? As new property is being built, bocomes older/flr sale etc, seems to me like an ongoing market, WHICH IS GREAT!

3, Some of you (as i sit and read all forums), have companys you buy your property under, is this a good option? Good and bad points of creating a property investment company...

4, Has any of you who have ALOT of property, ever had quite a few sit empty and been doomed about paying 10 mortgages with no income?

Thanks again for your time, i actually make notes from your posts, so i can understand it, so thankyou for your help.

Matt

1, Please explain "Yield"?

Yield is a measure of the true value of a property, expressed as a percentage. To translate it into a simple (meaningful!) currency format use the following:

Yield(%) = (CPR - KMA)/72 * SQRT(WMD/SWAK^IR)

2, Do you think the BTL market will be going well for the next 50 years? Its on going isnt it, always property for BTL'ers to buy to let? As new property is being built, bocomes older/flr sale etc, seems to me like an ongoing market, WHICH IS GREAT!

Yes, the older a property is, the better! (Higher yeild due to to significant CPR gains - see answer to 1 above) In 50 years there will be lots of OLD properties to buy! Totally ongoing.

3, Some of you (as i sit and read all forums), have companys you buy your property under, is this a good option? Good and bad points of creating a property investment company...

Yes (goodness, you already have all the answers!), but remember, if you have less than 42 BTLs you can start a Ltd Company without the hassle of setting up an 'official company'. Companies are great, they don't pay any tax.

4, Has any of you who have ALOT of property, ever had quite a few sit empty and been doomed about paying 10 mortgages with no income?

Don't worry about that - you have obviously been spending too much time amongst the boring jealous FTBers at SingingPig! Don't even read the crap they post. The longer your properties sit vacant, the more capital gains you will have made, and you don't have to worry about an increased FBT caused by the diflamic effect of renters.

I'm always happy to help, so feel free to ask if you have any further questions or if I have broken things down too simply for you (I can read between the lines that you are fully switched on with your BTL plans).

Hooroo & good luck!

Harrison.

Hi Foundation,

Speechless! Out of the 3 forums i posted that same message for feedback, your post was the most helpful of all!

You are SPOT ON with what you said about jelous BTL'ers, some people do not like to advise begginers on this subject.

May i ask if you let properties yourself? by the sounds of your post, you do, or you just know alot about the subject.

Im not looking for short term money spinners, im thinking more about the future and long term investment.

On top of that, property just interests me, and i love business, so puting the two together is ideal for me.

The only thing in my way, is the 1st 15% - 20% deposit needed for the 1st property, after the 1st property, i can use the equity in it for the 2nd properties deposit.

Thanks to your advice i will set up a LTD company when i manage to get my 1st property, and i did not know that after 42 you need to be an "official company", so thanks for that aswel.

I still do not fully understand "yield", i cannot seem to grasp exactly what it means.

Thanks

Matt

Cripes. Let's start over.

>> 1, Please explain "Yield"?

Yield is value of the shareprice that the company pays out in dividends. If the shareprice is 50 and it pays a 2p dividend, that is a 4% yield. Not all companies like to pay out a high dividend, as it leaves them with less cash to reinvest in the business.

Yield in property terms is the yearly rental income as a % of the market price.

>> 2, Do you think the BTL market will be going well for the next 50 years? Its on going isnt it, always property for BTL'ers to buy to let? As new property is being built, bocomes older/flr sale etc, seems to me like an ongoing market, WHICH IS GREAT!

50 years is too long a time horizon. Property is not a good investment now and will not be until prices drop at least 30%. In my opinion, shares will always outperform property, especially well selected shares. With property you are at the mercy of the market, but with shares you can pick good companies which outperform the market as a whole.

>> 3, Some of you (as i sit and read all forums), have companys you buy your property under, is this a good option? Good and bad points of creating a property investment company...

Do you mean buy-to-let syndicates? They are a way of buying a newbuild at a slight discount, but just forget about it for the next few year... property is NOT a good investment right now.

>> 4, Has any of you who have ALOT of property, ever had quite a few sit empty and been doomed about paying 10 mortgages with no income?

Only if they are asking too much for the rent! This is where we are with property at the moment - rental income does not cover mortgage payments on an investment property, and house prices are falling. So you have negative cashflow and falling capital - does that sound like a good "investment" to you?

Superb trolling!

Yield as is the annual return divided by the investment.

So:

£100 in bank, giving £10 interest per annum = gross yield 10%
£100 in gilts, giving £10 of coupons per annum = gross yield 10%
£100 in shares that pay a £10 dividend per annum = gross yield 10%
£100 (whether borrowed or not) invested in property that pays a rent of £10 pa = gross yield 10%

Forget that crazy formula.






Brilliant!





Real Class!

Why would negative cash-flow and falling capital be a bad thing? Providing the bank continues to put equity* in my account? Even without pesky tenants, I can use this to pay the mortgage and over the long term property prices will go up. History has proven that FACT!

*nb Gamover – equity money is the same as regular cash money except you don’t have to work to earn it! The banks calculate it on a monthly basis using a derivative of the yield formula I gave you above:

0.72*WMD/WTO

see it really is too easy!

Sledgehead - who is the troll?

foundation, if Gameover isn't you, you could really be messin with his guessin. Please STOP! (then again, perhaps Gameover is the troll.... ah thisis too confusing)

I know certain folk here believe stupidity should be punished, but a joke is a joke. Couldn't you form this lot into a Razzala article or something?

Better still, go and do it on singing pig. Frankly those bozzoes deserve everything they get.

I take it you can't see the positive side of Darwinian evolution then?

Foundation, I fully support everything you are telling GO. And I, for one, believe in Darwinian evolution. So bamboozle away, foundation, as I am reminded of a quote which quite accurately refers to GO; I believe it was first said by PT Barnum and refers to the frequency of birth (one a minute) of the cups on the underside of octopus tentacles.

Yes, I am a 733T 73TT3r. That's the way to put it.

In property, your future is guaranteed whether you are in it for capital gains or cashflow. See this article for PROOF!
http://melonmail.melon.com.au/vemail//view...u=2949&id=27520

If you have equity in your own home, use it to buy BLTs. If you don't have any houses yet, buy a house on a 130% mortgage. This will give you NEGATIVE EQUITY! Negative? Isn't that bad? Nope, you can take it and use it as a deposit on another house right away! See how negative equity is actually a GOOD THING?!
Want more negative equity? Buy at the PEAK OF A CYCLE. That is the 'big secret' to getting more NEGATIVE EQUITY per invested pound.

Hope this helps. Remember, there is no need to waste money on property seminars when you can get all the answers here (and from Kirsty Allsop or Sarah Beeny) for free and spend your hard earned EQUITY on more BLTs.

Hi

Thanks for the great advice Foundation, i really appreciate it

Thanks

Matt

You guys! I know where this is headed. And what if some dumb **** journo doesn't geddit? What if Kirsty takes it at face value. Or .... What if I just lighten up a bit and get with?

Actually I do see your point about property, seeing as it is the only asset in the world of limited supply, unlike Gold and Silver which can be spun from froth.

Also, whilst Gold and Silver can be rented out, it's hard to find any near good schools.

Also it's hard to borrow against the equity in your gold unless you want to buy more gold. The more you borrow against the gold, the more gold you can buy and you get stamps too. The problem with this is you'll need somewhere to store the gold. Hopefully you've set aside enough cash to buy a BTL: that'll give you somewhere to store the gold. Of course once you have a BTL you can borrow against that too. This effectively removes the storage ceiling problem for gold and is another reason why BTL has become so popular.

Gold is maleable which is another way of saying that it yields, but not as much as BTL.

Giraffe Cats Share tips*


As you can see from this graph, ebay shares have fallen by loads.



EBAY shares are in whats called a "crash". There is only 1 way that this graph is going, and that is down. Therefore I recommend** going "short" on these shares. £50 per point should be sufficient.


*Do not take my tips
**Do not follow my recommendation

As I understand it selling seagulls that you don't own like the ones in Giraffes picture is known as "going short".

It is good when the seagulls can't fly but if they hit an updraft you better watch out. If they flew up to 120 at £50 a point, a good tactic woul dbe to cr@p your pants right there and then.

As I understand it this is known as "getting caught short".

Meanwhile I wonder whether anyone would care to give an opinion on this. Somebody said it was likely to bomb, but not so as you'd notice.






(Sledgehead wishes to thank and recognise http://www.chris.com/ascii/)