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kuntama

5 Bed House In West Dulwich Didn't Sell At Auction

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This was on the Bernard Marcus auction today. Last bid was 323000!!

Does this low price reflect the regulated tenancy or is this just a significant price drop?

Would really appreciate some opinions/pearls of wisdom

Cheers

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Not very bright are you.

This is generating gross rent annually of £5,400. It's a large house. Annualised annual maintenance must be between 2 and 5k, so annual net profit is about 3.5k at best. Even if the tenant chases L off with a pitchfork the outside needs to be painted, the central heating serviced, the gas safety certificates produced annually... Let's be very generous and say 4.5k annual profit.

On a capital cost of 323k that's an annual yield of 1.3%... And you're borrowing money from the bank at 7%... and T includnig legal successor might live another 50-75 years before you can get your hands on it. Cool, why didn't you buy it?

Generally a regulated tenancy reduces property values by 50%.

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This was on the Bernard Marcus auction today. Last bid was 323000!!

Does this low price reflect the regulated tenancy or is this just a significant price drop?

Would really appreciate some opinions/pearls of wisdom

Cheers

I would re-iterate Telometer's point but in a slightly less condescending way. Even at that low level , the property represents a bad investment, and yes regulated tenancy has a disastrous effect on prices.

Edited by monty1080

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Just like to say to telometer and monty1080:

Less of the insults please.

It was pretty clear to me it was a bad investment. In fact it was SO FUC....G obvious I just had to make sure I wasn't missing something..

Unlike some people, I like to question my conclusions from time to time.

What I was looking for was not the obvious being stated ie THE FIGURES DON'T ADD UP - YOU 2 PRATS, but why companies do take these residencies on.

I've heard rumours of unsavoury landlords with interesting methods of getting rid of these tenants.

Some auction houses have also said it's possible to buy these tenants off at the right price. If you're in the know, some auction houses can do the initial leg work for you ie how much would it take to move the tenant on.

So please telometer and monty1080 reserve your name-calling and arrogant assumptions for yourselves

Regards

ps thanks,duke of hazzard, for pointing out advice was asked for not juvenile insults and one-dimensional superficial analyses of potentially complex scenarios.

Edited by kuntama

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Just like to say to telometer and monty1080:

advice was asked for not juvenile insults and one-dimensional superficial analyses of potentially complex scenarios.

You had a detailed analysis from us. More than Duke was able to come up with!

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This was on the Bernard Marcus auction today. Last bid was 323000!!

Does this low price reflect the regulated tenancy or is this just a significant price drop?

Would really appreciate some opinions/pearls of wisdom

Cheers

Gross rental yield of 1.6%. I'm surprised bidding got anywhere near that level.

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with interesting methods of getting rid of these tenants.

Some auction houses have also said it's possible to buy these tenants off at the right price. If you're in the know, some auction houses can do the initial leg work for you ie how much would it take to move the tenant on.

That's quite interesting. They'd be shooting themselves in the foot though. Big wedge to move on. Then double the rent.

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This was on the Bernard Marcus auction today. Last bid was 323000!!

Does this low price reflect the regulated tenancy or is this just a significant price drop?

Would really appreciate some opinions/pearls of wisdom

Cheers

The reason investors like regulated tenancies is that you are guaranteed your rental income and with no voids. There is also the chance you could get vacant possession through death normally of course. I'm not current on the discount structure you get on vacant possession values. I know you had to pay in the 80's from 30% up to 40% and in the 90's it got up to 70%. The raise in percentage terms was mainly in the fact rents were able to be set more in line with non regulated rents.

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The reason investors like regulated tenancies is that you are guaranteed your rental income and with no voids. There is also the chance you could get vacant possession through death normally of course. I'm not current on the discount structure you get on vacant possession values. I know you had to pay in the 80's from 30% up to 40% and in the 90's it got up to 70%. The raise in percentage terms was mainly in the fact rents were able to be set more in line with non regulated rents.

Thank you Tim Miller

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Thank you Tim Miller

No problem my pleasure.

And to the halfwits "the_duke_of_hazzard' & 'Telometer' who were rude to you, best find out what your problem is and solve it! There really is no need for it and it's not wanted here, this is a forum for intelligent or witty remarks, perhaps just get a life!

Edited by Tim Miller

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No problem my pleasure.

And to the halfwits "the_duke_of_hazzard' & 'Telometer' who were rude to you, best find out what your problem is and solve it! There really is no need for it and it's not wanted here, this is a forum for intelligent or witty remarks, perhaps just get a life!

How was I rude, exactly?

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How was I rude, exactly?

My sincere and humble apologies, I misread your remark.

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The reason investors like regulated tenancies is that you are guaranteed your rental income and with no voids.

Hmm.... true, but in this case you are guaranteed a return of close to 0%, and certainly much less than the bank interest cost.

The raise in percentage terms was mainly in the fact rents were able to be set more in line with non regulated rents.

If that was the case in the 90s, it's not the case any longer. The main problem being that fair rents slip further and further away from market rents, on account of the restriction to the amount they may be raised.

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