Can You Shoot This One Down?

[Time to raise the rents.]

http://www.findaproperty.com/agent.aspx?ag...5&photo=1#photo

Enjoy.

[Guest consa]

http://www.findaproperty.com/agent.aspx?ag...5&photo=1#photo

Enjoy.

Has the tenant given notice then?

Why is it for sale if it is so wonderful?, it must be one of yours

[OnlyMe]

Ex LA block - what are the servicing costs? What is the structure of the the block like - what are the likely maintenance costs and does the block need £100,000s to keep it standing and in tact over the next years/decades? Why just a picture of the kitchen, what size are the bedrooms? Why no picture of the outside of the block - is it a pig?

[Killer Bunny]

http://www.findaproperty.com/agent.aspx?ag...5&photo=1#photo

If its not on a 'Sunhill' type sink estate its probably priced right. Well done you've found one property out of 1 million for sale priced right - again assuming its not total crap elsewhere in the property and outside.

[Civil Servant]

Looks like it might be a relative bargain. Well done TTRTR. Lets hope more vendors start to price realistically (a phenomenon which, relative to 2004 prices, would also be known as a House Price Crash).

I think most people on this site are here because they do ultimately want to buy property when reasonably priced stuff becomes available. So I don't fully understand the instinctively negative reaction to your posts by some when you point out this might be beginning to start happening (and that the crash/slide/correction, call it what you will, is beginning to take hold).

[CrashCrash]

ouch Chain Free, sounds like Pain Free(for the seller)

Who wants to live close to Power station(as if it is a selling point)

No picture of out side, tells you something

split level ? over 4 floors ?

No mention of size of the rooms or picture of the rooms, Too small ?

TTRT, description shot itself down. we dont have to do it

Try harder next time

Hope that helps

http://www.findaproperty.com/agent.aspx?ag...5&photo=1#photo

Enjoy.

If it is so hot, why would you let us know about it rather than buy it yourself.

not good enough for you or off loading your BTLs ?

[London-loser]

TTRTR,

Certainly on the face of it (assuming it doesn't have some horrendous problem to justify the "low" price) that looks pretty d@mn good... and a massive anomaly I presume you would agree (there must be some reason why you mess around with 6% yields or so if you can get 9% easily).

Now... if you can just convince my landlord to drop the price to give a 9% yield (he'd have to almost half the price) you'll have turned me from a renter to a buyer!

[Marina]

You seem to be under the illusion that finding an example of a property which provides a reasonable yield somehow means that:

The majority of would-be FTBs can suddenly miraculously afford property. (They can't)

That property is suddenly a good investment again (it isn't - the exception proves the rule).

That the market is in good shape (it isn't - have a look at the expats site to see how real people selling real houses are getting on).

That current property prices are sustainable. (They aren't - young people scrabbling onto the ladder in the last few years are never going to be able to move up the market as they get older and want families. If a 1 bed flat is a massive stretch, a 3 bed house will be an unattainable dream all their lives - unless, of course, the market does what markets have to do - and begin to price at what people can afford to pay.)

I do hope this has helped to clear things up.

[Smell the Fear]

If its not on a 'Sunhill' type sink estate its probably priced right. Well done you've found one property out of 1 million for sale priced right - again assuming its not total crap elsewhere in the property and outside.

I don't agree that it is priced right - it is only priced right relative to the more desirable properties in the area.

A well maintained victorian property in the same area is likely to yield 5-6%. The higher yield on the ex-council property is justified by the fact that it is much less desirable and much more difficult to dispose of in any market conditions. A 4 bed ex-council flat is likely to attract less desirable tenants carrying a greater credit risk for the landlord (i.e. those on very low wages or students - the rent per room is cheap by London standards), and is almost certainly more prone to rental voids.

This property should be yielding 15-20% gross p.a. as it would have done a few years ago.

[murpaul]

http://www.findaproperty.com/agent.aspx?ag...5&photo=1#photo

Enjoy.

LOL. I know where this flat is. Back in 2001, when I was interested in living in zone1 I went to view a 1 bed flat in the estate where this one is, offered at £90 a week. It was 2001, but £90 was very,very cheap. There was a reason it was that price, the block/estate is terrible, really terrible. Imagine the worst 1960s architecture with crackheads roaming the place, etc., etc. and you're halfway there. It should be knocked down.

Anyway after turning down the place straight off, the estate agent hassled me for days afterwards to reconsider, with a discount. TTRTR will have more voids than he is getting on his other stock and will not get the rents he thinks he will but hey, lets humour him. Nice one mate, good luck, really. I think you'll need it, it a BTL too far.

[erranta]

ouch Chain Free, sounds like Pain Free(for the seller)

Who wants to live close to Power station(as if it is a selling point)

No picture of out side, tells you something

split level ? over 4 floors ?

No mention of size of the rooms or picture of the rooms, Too small ?

TTRT, description shot itself down. we dont have to do it

Try harder next time

Hope that helps

If it is so hot, why would you let us know about it rather than buy it yourself.

not good enough for you or off loading your BTLs ?

He's probably banking on the fact that most people don't realise they get WHACKED for huge sums from the council for re-roofing, asbestos clearance (very likely) or upgrading the building in some way.

Many, many ex-council property owners have been ruined by being put in this position after buying their property in a 'shared' building!

Hence get rid of property @ ANY price after getting the 'dreaded' letter!

[Time to raise the rents.]

TTRTR,

Certainly on the face of it (assuming it doesn't have some horrendous problem to justify the "low" price) that looks pretty d@mn good... and a massive anomaly I presume you would agree (there must be some reason why you mess around with 6% yields or so if you can get 9% easily).

Now... if you can just convince my landlord to drop the price to give a 9% yield (he'd have to almost half the price) you'll have turned me from a renter to a buyer!

Let's see, the only reason that comes to mind for me is that it's so unpopular with tenants, that the yield is actually 6% or less when applying voids to the equation.

So what would you lot rather have, a 6.5% yield and ALWAYS full, or a 9% yield and endless viewings for prospective tenants to constantly reject your place?

Me being in Sweden, could only put up with the first option above (do I need to explain?). I imagine that even though you lot are local vs. me, you would prefer the 1st option too.

Please correct me if I'm wrong there.

Edited November 3, 2005 by Time to raise the rents.

[Smell the Fear]

Let's see, the only reason that comes to mind for me is that it's so unpopular with tenants, that the yield is actually 6% or less when applying voids to the equation.

So what would you lot rather have, a 6.5% yield and ALWAYS full, or a 9% yield and endless viewings for prospective tenants to constantly reject your place?

Me being in Sweden, could only put up with the first option above (do I need to explain?). I imagine that even though you lot are local vs. me, you would prefer the 1st option too.

Please correct me if I'm wrong there.

This begs the question why you bothered posting this in the first place. The yield appears to be 9%, but with voids it is much lower. Going by what you are saying (and what other posters have already stated about the property) the gross yield should be much higher given the downsides with this property.

Are you simply telling us that you consider yourself clever for buying property that yields 6% with no voids, rather than one that yields 6% with voids and hassle?

Pretty obvious and pointless to tell us about it.

[Time to raise the rents.]

Maybe I'm telling you a calculator isn't the answer to every problem.

[Smell the Fear]

Maybe I'm telling you a calculator isn't the answer to every problem.

Thanks. You have told us that in the current market it is possible to have a cr@p yield, or a cr@p yield with hassle. Dumb and dumber.

[OnlyMe]

TTRTR,

Can You Shoot This One Down?, 9% yield Options

I'm struggling to follow the point now of the whole thread, quick question are you shooting up?

Edited November 3, 2005 by OnlyMe

[London-loser]

Let's see, the only reason that comes to mind for me is that it's so unpopular with tenants, that the yield is actually 6% or less when applying voids to the equation.

So what would you lot rather have, a 6.5% yield and ALWAYS full, or a 9% yield and endless viewings for prospective tenants to constantly reject your place?

Me being in Sweden, could only put up with the first option above (do I need to explain?). I imagine that even though you lot are local vs. me, you would prefer the 1st option too.

Please correct me if I'm wrong there.

Hmm,

You seem to have shot it down yourself by pointing out that the place is actually a sh1tpit that nobody wants to live in (as I alluded to above). Nice one.

[jpidding]

Hmm,

You seem to have shot it down yourself by pointing out that the place is actually a sh1tpit that nobody wants to live in (as I alluded to above). Nice one.

What this boils down to (which everyone is realising) is that when pricing assets VS LIBOR (read interest rates) you have to factor in risk.

A well decorated spaceous flat in a nice street in Chelsea would be AAA. No problem filling it, good professional tennant with good credit history, no buggering around. Trades a few ticks above LIBOR.

A dodgy ex council place in a rough area with crackheads on the street not so good. Bad neighbours, tennant likely to leave at a moments notice, takes time to fill....junk bonds. Trades 400 basis points over LIBOR.

There should not be an equal yield expected for all rental properties across the UK, but the level they trade at will always be related to LIBOR (or base rates).

[Time to raise the rents.]

You guys as usual just don't get it.

6.5% (easily found as I've demonstrated before) is excellent.

You won't get it until yields are 4% all round (by that I mean even in popular tenant areas & not new build remote villages), that 6.5% was good will you?

Lets face it, when yields were 10%, you didn't get it then, so why would you get it now?

[Matt]

Now matter how much spin you put on it one thing is clear: HOUSE PRICES WILL FALL OVER THE NEXT FIVE YEARS.

(you just don't get it)

[Time to raise the rents.]

Now matter how much spin you put on it one thing is clear: HOUSE PRICES WILL FALL OVER THE NEXT FIVE YEARS.

(you just don't get it)

Well you obviously know what you're talking about..................

[murpaul]

You guys as usual just don't get it.

6.5% (easily found as I've demonstrated before) is excellent.

Well the reason I dont get it ( cant speak for anyone else ) is that for a business to take on nearly £200k of debt, to generate 6.5% doesnt make sense. I'm sure you could generate bigger profits from any number of other businesses for that kind of outlay, a McD franchise springs to mind but its one of many. On top of that, whether the market is stagnanting or falling, theres no extra gain to cushion any potential problems. Rents are not rising, so there is limited opportunity to increase profitablility.

Furthermore, the financial climate is moving against highly leveraged businesses, and GB is facing an unknown blackhole in the govt finances, BTL looks a very attractive target for taxation. Thats why 6.5% yield doesnt look that good to me. Good luck anyway, I think you'll need it.

[sign_of_the_times]

seems to me the place is EMPTY !

(unless they're using old photos from when it was first flipped)

[Michael]

I'm not familiar with area but £1400 seems an unrealistic rent for an ex-LA 4 bed maisonette..

[Time to raise the rents.]

Well the reason I dont get it ( cant speak for anyone else ) is that for a business to take on nearly £200k of debt, to generate 6.5% doesnt make sense. I'm sure you could generate bigger profits from any number of other businesses for that kind of outlay, a McD franchise springs to mind but its one of many. On top of that, whether the market is stagnanting or falling, theres no extra gain to cushion any potential problems. Rents are not rising, so there is limited opportunity to increase profitablility.

Furthermore, the financial climate is moving against highly leveraged businesses, and GB is facing an unknown blackhole in the govt finances, BTL looks a very attractive target for taxation. Thats why 6.5% yield doesnt look that good to me. Good luck anyway, I think you'll need it.

Now correct me if I'm wrong, but aren't you saying there's no money to be made? Yet in the same breath you're saying that BTL is an attractive taxation target?

What is the name of those drugs again??????????

I'm not familiar with area but £1400 seems an unrealistic rent for an ex-LA 4 bed maisonette..

This is cheap compared to £2,300pcm for a period 4 bedroom house in the same area.