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dogbox

No Alternative Better Yields Than Property

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Most LLs tend to put about 15 - 20% deposit on a B2L deal.

Lets say £26250 on a price of £175000.

I agree yields are low, but what is the alternative for Mr average who's been burned by Pensions?

Lets assume he puts the £26250 in the Bank and gets 4.75% interest. Thats £708 p/a after higher rate Tax. Wow.

Therein lies the nub of the issue, most Jo Blows wont give two figs for £708, on the other hand they will be happy to forgoe this piffling sum for a chance at longterm capital growth. Thats it, end of, he wont think any further. The fact you guys will factor - in all sorts of irrelevance and pessimism is irrelevant to people like him, he wont.

JO BLOES drive the market, not you.

Dr Bubb usually introduces all sorts of irrelevance into the argument, including his mantra that LLs subsidise tenants. Well again this is all irrelevant because in the real world I dont know a single LL that subsidises no matter how many pointless illustrations bears use. Not only that, but vast numbers of LLs bought when prices were lower so yields hold - up.

UNLESS IRs RISE PEOPLE WILL STICK THIER MONEY INTO PROPERTY.

Edited by dogbox

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in the real world I dont know a single LL that subsidises no matter how many pointless illustrations bears use. Not only that, but vast numbers of LLs bought when prices were lower so yields hold - up.

So what? I do know someone who subsidises his tenant. That just shows we know different people. Your point is?

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look at the FTSE my lovely ISA's have you had a better return than 4.75% in the last year, i'm considerably richer than this time last year just by sitting on my ar**

as opposed to you two just talking from yours

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Spot on. Unless debt becomes unaffordable, it's business as usual.

Cheers for that boys. Lets hope all the jonny-cum-latelys have taken that on board.

Everyone always works on the basis that everything is fine, then something happens!

Best case scenario thinking seems to be the bull refuge at the moment despite plenty of economic indicators with largely showing downside risk.

Economic growth does not last forever, so when you start seeing the signs take heed, you never anticipate which plank will start the compound/domino effect.

Feel the economic temperature. Its out there in the press hubbub. When there is no hubbub there is no problems, there is a hubbub.

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I do know someone who subsidises his tenant.

I only have to look at the rental pages of the local paper to see plenty of amateurs eager to subsidise their tenants... and that's before taking into account how much the actual value of their new BTL flats must have dropped since they bought them.

Also, I'm kind of amused to see dogbox posting that he sold all his BTLs and then posting a couple of days later to say that 'no alternative offers better yields than property'. So was selling them a mistake, or does he really not believe what he posts? LOL.

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I only have to look at the rental pages of the local paper to see plenty of amateurs eager to subsidise their tenants... and that's before taking into account how much the actual value of their new BTL flats must have dropped since they bought them.

Also, I'm kind of amused to see dogbox posting that he sold all his BTLs and then posting a couple of days later to say that 'no alternative offers better yields than property'. So was selling them a mistake, or does he really not believe what he posts? LOL.

Yes, I remember about this time last year he was warning us all to buy a property before they increased in price. Next thing I heard he'd sold his BTLs. No credibility, IMO.

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look at the FTSE my lovely ISA's have you had a better return than 4.75% in the last year, i'm considerably richer than this time last year just by sitting on my ar**

as opposed to you two just talking from yours

Im well into ISAs and Unit Trusts so I concur your view, however, again this is not relevant to the great unwashed who all thier lives have been conned with endowments, bonds and pensions.

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There are two ways of taking subsadising your tennant.

One is, where the rent does not cover mortgage payments and the LL has to top it up every month. I would hate to rent from someone such as this.

Or, for example,

My landlord has no mortgage on the property I rent. He is however subsadising my living cost because he is charging considerably less rent than the bank would (IO mortgage on the same house). If you take the latter meaning, which I do, then almost all LL's are subsadising their tenants.

TTRTR, answer me this:

Could any of your tenants buy the you rent to them for less than the cost of the rent? If they cant then you are subsadising them!

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Also, I'm kind of amused to see dogbox posting that he sold all his BTLs and then posting a couple of days later to say that 'no alternative offers better yields than property'. So was selling them a mistake, or does he really not believe what he posts? LOL.

As I keep saying, what I think and do is irrelevant. I sold to crystalise gains. Most LLs wont. They will think "I could sell but where will I put the cash". They are'nt interested in poxy Bank accounts and in any event many will have cash exposure already.

THE POINT IS, LLs WONT FLOOD THE MARKET WITH PROPERTY TO SELL. RECENT LL's WILL SURMISE THAT RE - DRAWING THIER DEPOSIT TO BE PLACED IN A POXY BANK ACCOUNT IS'NT WORTH IT.

My landlord has no mortgage on the property I rent. He is however subsadising my living cost because he is charging considerably less rent than the bank would

I think bears fundamentally misunderstand LLs.

I know a few that really couldnt give a flying - 5uck for yield. One old boy I know only charges £400 per month on a 3 bed detatched bugalow just outside London - happy as larry.

They are happy the rent is still hansome in comparison with thier original capital outlay. They have no reason to sell (in thier eyes) and are happy in the knowledge that longterm growth is a strong bet.

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Could any of your tenants buy the you rent to them for less than the cost of the rent?

Don't forget that TTRTR has implied in the past that he specialises in multiple-occupancy rental. If you buy a house in London and stuff a dozen Australian backpackers into it, I'm sure you can make a profit... he may be annoying at times, but he's one of the few bulls here who seems to have some clue.

RECENT LL's WILL SURMISE THAT RE - DRAWING THIER DEPOSIT TO BE PLACED IN A POXY BANK ACCOUNT IS'NT WORTH IT.

Recent BTLs will soon come to realise that subsidising their tenants by 500 or more a month when the value of their crappy 'executive apartment' is dropping is crazy. Or they'll stuff them full of illegal immigrants and chavs, thereby reducing the value of other flats in the block even further.

Edited by MarkG

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Im well into ISAs and Unit Trusts so I concur your view, however, again this is not relevant to the great unwashed who all thier lives have been conned with endowments, bonds and pensions.

Dogbie,

As you have unwittingly pointed out here, the deciding factor is not the asset but the investor. "The great unwashed" are doomed to stumble from one bubble to another. Yes, property may well seem like the most attractive option on the table for them right now. Just like endowments, splits, "pensions", shares, GEBs, junk bonds and with-profits did when they piled into these!

Edited by Sledgehead

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TTRTR, answer me this:

Could any of your tenants buy the you rent to them for less than the cost of the rent? If they cant then you are subsadising them!

Yes they could if they had the necessary self discipline. None of my places are rented for less than what they would cost IO to buy. They yield around 6.5% & the best mortgage rate I can get is 5.09% So they are yielding enough to pay for themselves including maintenance. That means my equity in them is earning more than enough to satisfy me. I shouldn't forget to thank the tenants for the CG on top either. :D

BTW, I whole-heartedly agree with your method of judging whether a tenant is paying their way or being subsidised.

The fact that I am not subisidising my tenants and can find more property for sale where the tenants pay well over 100% of the cost, is the reason for me knowing property at least where I operate, isn't overvalued.

I will start a new thread on my ongoing purchase right now.

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I know a few that really couldnt give a flying - 5uck for yield. One old boy I know only charges £400 per month on a 3 bed detatched bugalow just outside London - happy as larry.

They are happy the rent is still hansome in comparison with thier original capital outlay. They have no reason to sell (in thier eyes) and are happy in the knowledge that longterm growth is a strong bet.

In that case LLs to misunderstand bears - and anyone who thinks owning should be competitive with renting. Remember, long term growth is predicated on attracting new owners!

There are many folks who are happy to hold high yield shares and bonds, but these folks don't expect long term growth. Why should the LLs?

Edited by Sledgehead

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So what? I do know someone who subsidises his tenant. That just shows we know different people. Your point is?

Me to..

depends on the area...

I have a mate who does so to the sum of over £100 a month.. on two properties..

and he didn't buy at the peak..

Yes they could if they had the necessary self discipline. None of my places are rented for less than what they would cost IO to buy. They yield around 6.5% & the best mortgage rate I can get is 5.09% So they are yielding enough to pay for themselves including maintenance. That means my equity in them is earning more than enough to satisfy me. I shouldn't forget to thank the tenants for the CG on top either. :D

BTW, I whole-heartedly agree with your method of judging whether a tenant is paying their way or being subsidised.

The fact that I am not subisidising my tenants and can find more property for sale where the tenants pay well over 100% of the cost, is the reason for me knowing property at least where I operate, isn't overvalued.

I will start a new thread on my ongoing purchase right now.

question.

Devon, 1 bed flat rental yield of £350 a month.

cost to buy £130,000 at peak.

Does that work out?

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None of my places are rented for less than what they would cost IO to buy.

Just being picky here, but IO means that you haven't bought anything - you're just renting it off the bank / building society.

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Me to..

depends on the area...

I have a mate who does so to the sum of over £100 a month.. on two properties..

and he didn't buy at the peak..

question.

Devon, 1 bed flat rental yield of £350 a month.

cost to buy £130,000 at peak.

Does that work out?

No

But if someone bought it for 20k and is happy to get 4k per year it does work for him. His capital gains are sitting in the property so he could sell & realise them - but he's happy..

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Does that work out?

Does if you stuff a dozen Chinese cockle-pickers or Eastern European cleaners in there. Of course there's a limit to how many people can do that to turn an unprofitable property into a profitable one... if more than a small fraction of landlords start filling up their properties that way, they'll soon run out of tenants.

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But if someone bought it for 20k and is happy to get 4k per year it does work for him.

Only if they're a fool. 130k in the bank would be making them nearer 8k a year, without the hassle of having to rent the place out...

I'm kind of glad that so few landlords understand maths, otherwise there'd be nowhere to rent.

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Most LLs tend to put about 15 - 20% deposit on a B2L deal.

Lets say £26250 on a price of £175000.

I agree yields are low, but what is the alternative for Mr average who's been burned by Pensions?

Lets assume he puts the £26250 in the Bank and gets 4.75% interest. Thats £708 p/a after higher rate Tax. Wow.

Therein lies the nub of the issue, most Jo Blows wont give two figs for £708, on the other hand they will be happy to forgoe this piffling sum for a chance at longterm capital growth. Thats it, end of, he wont think any further. The fact you guys will factor - in all sorts of irrelevance and pessimism is irrelevant to people like him, he wont.

JO BLOES drive the market, not you.

Dr Bubb usually introduces all sorts of irrelevance into the argument, including his mantra that LLs subsidise tenants. Well again this is all irrelevant because in the real world I dont know a single LL that subsidises no matter how many pointless illustrations bears use. Not only that, but vast numbers of LLs bought when prices were lower so yields hold - up.

UNLESS IRs RISE PEOPLE WILL STICK THIER MONEY INTO PROPERTY.

Another impassioned post with no solid foundation.

Your thread is about how you can't get better yields than on BTL... but you quickly point out that yields are low... but landlords don't care... because of the capital growth (wasn't this thread about the yields?).

Then you explain how, anyway, landlords can calculate fantasy yields based on what they paid years ago... so everything is alright.

Why is a bank account the correct alternative to measure BTL against today? For someone willing to gear themselves up six times into arguably a massively overpriced asset shouldn't you take a far riskier alternative as a comparison?

Even a boring average Balanced Managed pension fund made over 15% over the last 12 months. Why is 4.75% in ING the right comparison... other than that it helps you "prove" what you want to prove?

JO BLOWS drove the tech market too... and every other bubble you care to mention. Nobody here believes they can drive the market... just that they can get ahead of it.

Landlords and tenants?

If last year I paid £10k in rent to my landlord and the value of his property dropped £10k in nominal terms (more in real terms) plus he had to pay interest on his mortgage, service charges, ground rent, maintenance fees etc how much wealthier did he become for being a landlord and how much wealthier did I become by renting from him?

I'm sure that you can't do the maths and more importantly wouldn't see any value in doing it anyway. You already know the answer you want the rest is details.

I really don't know why you bother coming here to argue, you know what you believe and you are not interested in "irrelevances" like how to actually calculate a rental yield etc. Why don't you just go out and buy BTL?

You are an incredibly vocifeous property bull, which is a little strange for a boy who admits he sold all his BTLs recently while ramping property on this site. WEIRD. :blink:

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I would have thought you were at the drinks night tonight LL?

I wouldn't dare - I'd be terrified of getting beaten up or something. I can't believe how viscous (vishus) ?can't spell - how viscous some people are here.

how come you haven't gone, & further more, how come The Oldie hasn't gone?

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  • 301 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%



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