Can You Shoot This One Down?

[Yonmon]

I can't discuss the subject with someone who can't spell it sorry.

And CIUW, haven't I told you to get a life?

Someone with nearly 4000 posts to their name telling someone else to get a life. Hilarious.

[Marina]

Don't you think there's enough good ideas to go around?

Read Robert Kyosaki's books. There is a huge amount of money sloshing around in the world, do you want to have your share of it , or not?

I get my share from renting my software - my clients pay me monthly to use it. It's a whole lot easier than owning houses and hoping to rent them out.

[Time to raise the rents.]

I get my share from renting my software - my clients pay me monthly to use it. It's a whole lot easier than owning houses and hoping to rent them out.

Dare I make a comment on how quickly software finds itself out of date?

[Yonmon]

Some good stuff in those Kyosaki books. Hard to see how anyone applying the core ideas would be buying property at the moment. Still, there's lots of money to be made in other ways.

[enworb]

In TTRTR's defence, it appears to be a case of TTRTR's experience versus the rest's opinions.

I don't know why he hasn't mentioned the fact that his properties do appreciate because of the extensive work on each of his properties?

6+% yield plus massive appreciation minus small costs of refurb/labour = 1 happy TTRTR.

Your arguments against him would only make sense if he was purchasing overpriced new build apartments!

[geranium]

TTRTR,

This property is within walking distance of the Battersea Power Station Redevelopment Project, in other words, a very noisy building site. When does work start? How long will it go on for? Is it possible that this property is priced to reflect the risk of rental voids or much lower rental income once work starts?

[King of the castle]

Hi TTRTR,

I'm not too sure what you're trying to prove with this thread, because you wouldn't buy it yourself due to location/ex LA etc [as you said] and you're more inclined to buy circa 6% yield. Now call me old fashioned but I'd consider this way too low a yield, with maintenance taken off [and assuming no voids] you're simply making what you would in the bank [5%], You've got no guaranteed capital appreciation, and even if you did have you'd have to sell it to lift it ,as there simply isn't the cashflow there to remortgage into. My most recent purchase will net me 13% yield, on purchase price, and the cost of works required. My apologies for speaking 'against you', I normally agree with everything you say, but I just can't fathom out how you can buy at 6% yield and be pleased [and safe] with it. Perhaps OK as a one off individual BTL, with a seperate income to back it up, but the thought of an entire portfolio built like this, AND reliant on an income from it, spooks the hell out of me.

Good luck, and best wishes none the less.

Regards KOTC

[Rapid Descent]

I'm not a big fan of anecdotal evidence , either for or against a crash. This definitely comes under the "anecdotal evidence" banner.

Surveys and indices are a safer bet, although you have to recognise that at publication they are usually out of date. The ARLA buy-to-let survey suggests average yields in London for flats are 5.3%, average yield for a house is around 5.2%. Something like 8% of properties in London are yielding less than 4%.

The survey shows that there are a small number of properties (like 0.2%) yielding over 15%, but this is meaningless in terms of the overall market because it is such a tiny proportion. Great for those who know how to find and exploit such opportunities, but meaningless in terms of answering the question, "will there be a house price crash?"

[Time to raise the rents.]

TTRTR,

This property is within walking distance of the Battersea Power Station Redevelopment Project, in other words, a very noisy building site. When does work start? How long will it go on for? Is it possible that this property is priced to reflect the risk of rental voids or much lower rental income once work starts?

That is a great question. When will work start on the d**m f*****g Battesea Power station redevelopment?

I did a tour there a few years ago, they said once planning permission was in place (which it now is), they would go through a rolling redevelopment. I can't wait, because it'll boost Battersea big time.

I believe they have started already with some new build riverside flats.

As for its impact on this property, who cares?

[dogbox]

Hi TTRTR,

I'd consider this way too low a yield, with maintenance taken off [and assuming no voids] you're simply making what you would in the bank [5%],

I have to agree. Some of us are re - investing elsewhere, here's one my B2L freind just aquired;

Tenerife. Studio with sea views, c 12 years old. 80000 EUROS. 12000 EURO DEPOSIT.

The management company guarantee a return sufficient to produce a profit after all expenses incuding lost interest on e12000 deposit, one - off and regular repairs and the cost of the Spanish mortgage. The profit is £2000 (yes pounds) p/a, AND THATS BASED ON A 15 YEAR CAPITAL REPAYMENT MORTGAGE!

The 'guaranteed' return is the minimum he can expect and is based upon 26 weeks occupancy, which for Tenerife is realistic. Any rent achieved over and above 26 weeks will add to the profit.

So, he not only makes a reasonable rental profit but he will own the place outright in 15 years.

At the end of 15 years he has made a minimum £30000 rental profit and ownes a property worth 80000 EUROS. On top of all this he will use it for his holls so save money there to.

Edited November 5, 2005 by dogbox

[Time to raise the rents.]

Hi TTRTR,

I'm not too sure what you're trying to prove with this thread, because you wouldn't buy it yourself due to location/ex LA etc [as you said] and you're more inclined to buy circa 6% yield. Now call me old fashioned but I'd consider this way too low a yield, with maintenance taken off [and assuming no voids] you're simply making what you would in the bank [5%], You've got no guaranteed capital appreciation, and even if you did have you'd have to sell it to lift it ,as there simply isn't the cashflow there to remortgage into. My most recent purchase will net me 13% yield, on purchase price, and the cost of works required. My apologies for speaking 'against you', I normally agree with everything you say, but I just can't fathom out how you can buy at 6% yield and be pleased [and safe] with it. Perhaps OK as a one off individual BTL, with a seperate income to back it up, but the thought of an entire portfolio built like this, AND reliant on an income from it, spooks the hell out of me.

Good luck, and best wishes none the less.

Regards KOTC

I know nothing about your area, so can't really comment on it in any detail. But I can of course comment on my area. 6.5% (that's what I'm buying at the moment) is a good yield for London. The economy in London isn't as vulnerable to local factories or industries closing down like the Rover factory etc. So there isn't the same element of risk to employment and economic growth associated with regional locations.

So I think what you can get is great, but may also be subject to it's own potential problems which are too great for my liking & may explain why the yields are higher there.

Edited November 5, 2005 by Time to raise the rents.

[Marina]

Dare I make a comment on how quickly software finds itself out of date?

Course you can, like I can make comments about houses now being a depreciating asset in many parts of the country.

If you provide people with software to run their business, the upheaval of changing suppliers and learning a new system puts people off changing. If you provide them with reliable, intuitive to use software that makes it easier for them to run their business - they just stick with you.

We've been building slowly over the last 5 years. Our first customer is still with us. We've only lost two and that was through mergers.

It's a way better business model than property because there are barriers to entry - you have to have a modicum of intelligence to get started. Unlike property where any wally can borrow money and get started. And, say what you like, the number of people who have piled into BTL in the last few years has killed the goose that laid the golden egg - as we all know, yields now are really very uninteresting.

[boom_and_bust]

Hi TTRTR,

I live a couple of miles downstream from Battersea powerstation and it has been undeveloped for as long as I have had a home in London (30 years). Now, you will need to check up on the current status of this but I have seen in that time numerous residential redevelopment plans come and go on the site but on each occassion I was following the stories, the private sector investers pulled out because of the environmental costs required to clean the land site. Their are alot of toxic substances deep in the soil relating to the power burning era of Battersea like lead, sulphur, arsenic, etc., that would cost alot of money to clean up and the local authorities have never been prepared to foot the bill. There was talk about twenty years ago of the government intervening and stumping up the cash for development of Civil Service offices although the EU required a full health and safety task force to be commissioned for the project so it fell through. As I say, it has been like that as far as I can remember, 30+ years but I don't know what they have been up to recently.

Boomer

Edited November 5, 2005 by boom_and_bust

[Time to raise the rents.]

Hi TTRTR,

I live a couple of miles downstream from Battersea powerstation and it has been undeveloped for as long as I have had a home in London (30 years). Now, you will need to check up on the current status of this but I have seen in that time numerous residential redevelopment plans come and go on the site but on each occassion I was following the stories, the private sector investers pulled out because of the environmental costs required to clean the land site. Their are alot of toxic substances deep in the soil relating to the power burning era of Battersea like lead, sulphur, arsenic, etc., that would cost alot of money to clean up and the local authorities have never been prepared to foot the bill. There was talk about twenty years ago of the government intervening and stumping up the cash for development of Civil Service offices although the EU required a full health and safety task force to be commissioned for the project so it fell through. As I say, it has been like that as far as I can remember, 30+ years but I don't know what they have been up to recently.

Boomer

Good, the longer they take, the less of a glut of new builds there will be.....

[London-loser]

I know nothing about your area, so can't really comment on it in any detail. But I can of course comment on my area. 6.5% (that's what I'm buying at the moment) is a good yield for London. The economy in London isn't as vulnerable to local factories or industries closing down like the Rover factory etc. So there isn't the same element of risk to employment and economic growth associated with regional locations.

So I think what you can get is great, but may also be subject to it's own potential problems which are too great for my liking & may explain why the yields are higher there.

Hi again TTRTR,

I hope by now you realise I haver no problems with landlords in general (I even believe they deserve to make money for what they do!) and nothing against you personally (I would agree with enworb that you seem to be at the smarter end of the business - keeping away from the mass market etc).

However, I would point out that the London economy wasn't as vulnerable to local factories and industries closing down in the late 1980s/early 1990s either... but the London property market fell further and faster than regional property markets (I know, I know... it's different this time ).