Jump to content
House Price Crash Forum
Sign in to follow this  
EvilEdna

Generation Rent

Recommended Posts

Generation rent the winners

"Philip says he feels "really sorry" for the situation that young adults find themselves in, but places the blame on the government. He adds that he's "disgusted" at planned cuts to housing benefit, which he believes will result in greater homelessness. But he dismisses critics who say landlords such as himself are outbidding first-timers and preventing them from buying."

What an areshole. I'm fuming.

Share this post


Link to post
Share on other sites

ok, he's wrong on housing benefits

however, if he does the following:

"They're often semi-derelict and require a level of refurbishment that would be unmanageable for most people. They tend to need an investment of £20,000-£30,000 to bring them up to scratch. In any case, we don't tend to come across first-time buyers when we're buying"

"by employing his own maintenance team, he can keep costs down. "

then why should I blame him? he is taking on a capital job that others wouldn't

if he does the job well then he can renovate properties better than amateurs and therefore offer better value for money

I suspect his numbers do not stack up as well as he hopes, and th0o he says he can survive a 10% correction, I am not sure he is expecting a 30%+ one; but that's not my problem

Edited by Si1

Share this post


Link to post
Share on other sites

Fairly telling about the general state of the economy that he jacked in making clothes and his brother stopped taking photos to become legalised extortionists.

Who needs to make stuff or provide services when you can use fantasy money from the bank of bumwad to leverage your way into a captive market?

Share this post


Link to post
Share on other sites

he's almost certainly been lucky with lender forbearance; also I wonder what his leverage is like, but it doesn't sound like he was buying massively at peak prices

time will tell if he survives cuts in housing benefits and 30% house price falls, but I'd rather have a pro as a landlord like this chap than a lot of others

Share this post


Link to post
Share on other sites

ok, he's wrong on housing benefits

however, if he does the following:

"They're often semi-derelict and require a level of refurbishment that would be unmanageable for most people. They tend to need an investment of £20,000-£30,000 to bring them up to scratch. In any case, we don't tend to come across first-time buyers when we're buying"

"by employing his own maintenance team, he can keep costs down. "

then why should I blame him? he is taking on a capital job that others wouldn't

if he does the job well then he can renovate properties better than amateurs and therefore offer better value for money

I suspect his numbers do not stack up as well as he hopes, and th0o he says he can survive a 10% correction, I am not sure he is expecting a 30%+ one; but that's not my problem

Id tend to agree.

The fundamental problem this highlights is the tax system, they purchase for cash but then mortgage it swpecifically because of the tax advantage of taking on debt as opposed to using capital. Hardly suprising why the west is at peak debt when the govt forces the behaviour via the tax system

Share this post


Link to post
Share on other sites

Fairly telling about the general state of the economy that he jacked in making clothes and his brother stopped taking photos to become legalised extortionists.

Who needs to make stuff or provide services when you can use fantasy money from the bank of bumwad to leverage your way into a captive market?

Exactly. The only way to make money is asset pumping. Sod productive work it's not worth the hassle.

Share this post


Link to post
Share on other sites

from his numbers it looks like he buys typically currently for £95,000, renovation £25,000, and rents for £575 pcm

this represents a very poor investment yield as things stand

if he has 120 houses valued at this level and 20-25% equity (he says he can take 10% falls so I guess he has a problem when he approaches 10% equity), then 120 houses x £120,000 value = £14,400,000 total worth at current prices (ok prices a month ago ;) ), has 22.5% equity = £3,240,000 equity. If house prices fall 30% he is £1,000,000 in the red on these numbers.

However, if his equity level is much less than 22% he is increasingly likely to be screwed.

If he survives it will probably depends on cash-flow. And he may find himself borderling in the red for a very very long time, barely able to service his loans.

He may just survive owing to having started so early in the game in 1995, hell of a leveraged punt tho. If he was really smart he would screw it and sell up now. Maybe too late.

It may all hinge on his business attitude to risk - if he does not realise how lucky he was, and how his numbers for current buying at current yields with falling benefits levels don't really stack up, then he maybe toast without realising it - his own worst enemy may be his own cockiness.

Edited by Si1

Share this post


Link to post
Share on other sites

Id tend to agree.

The fundamental problem this highlights is the tax system, they purchase for cash but then mortgage it swpecifically because of the tax advantage of taking on debt as opposed to using capital. Hardly suprising why the west is at peak debt when the govt forces the behaviour via the tax system

true

there is nothing wrong with a bit of leverage and a bit of capital investment, and he does sound a pro from a maintenance POV, but as you say the pro-leverage incentives in housing have been too-extreme in this country

Edited by Si1

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.