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Btl Gone Mad

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Talking to a neighbour last night, he has this very well off Irish friend, in his 50s, comes around and cuts his grass, does some sort of landscape gardening, but anyway, he's loaded.

He owns a house worth around 500k. A couple of months back, my neighbours friend decided to buy the house next door to him that was going up for sale, for 450k - CASH. I was like "what?".

He is going to rent it out for £1450 per month. I was like "what?". "Its an investment" my neighbour said. I havent done the calculations, but I have the impression that everyone is doing this because in my neighbours words "Property is the place to put your money".

Despite me highlighting that property cannot continue to go up at the previous 6 years startling rate, he still thinks its the way forward.

Shall I go and do it as a long term investment, everyone else is doing it!!

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Talking to a neighbour last night, he has this very well off Irish friend, in his 50s, comes around and cuts his grass, does some sort of landscape gardening, but anyway, he's loaded.

He owns a house worth around 500k. A couple of months back, my neighbours friend decided to buy the house next door to him that was going up for sale, for 450k - CASH. I was like "what?".

He is going to rent it out for £1450 per month. I was like "what?". "Its an investment" my neighbour said. I havent done the calculations, but I have the impression that everyone is doing this because in my neighbours words "Property is the place to put your money".

Despite me highlighting that property cannot continue to go up at the previous 6 years startling rate, he still thinks its the way forward.

Shall I go and do it as a long term investment, everyone else is doing it!!

He's one person who is now 100% exposed to the housing market (assuming that was most of his money). Thats a VERY bad investment strategy for starters and thats ignoring the fact that RISK FREE, he could earn more monthly with bank/building society accounts!

AFP

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If your in it for the long term then yes you should go for it!

Houses are like any other investment, they go up and down in the short term, but will always increase in value over the longer term.

If I had that much cash im sure I would throw some of it into real estate too, and shares, and gold, and whatever else.

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He owns a house worth around 500k. A couple of months back, my neighbours friend decided to buy the house next door to him that was going up for sale, for 450k - CASH. I was like "what?".

He is going to rent it out for £1450 per month. I was like "what?". "Its an investment" my neighbour said. I havent done the calculations, but I have the impression that everyone is doing this because in my neighbours words "Property is the place to put your money".

He's a muppet. He could get £1237 a month after tax (at 40%) just keeping it in the bank and not worrying about voids, maintenance, management

or insurance!!

I'll repeat....MUPPET!!!

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Talking to a neighbour last night, he has this very well off Irish friend, in his 50s, comes around and cuts his grass, does some sort of landscape gardening, but anyway, he's loaded.

He owns a house worth around 500k. A couple of months back, my neighbours friend decided to buy the house next door to him that was going up for sale, for 450k - CASH. I was like "what?".

He is going to rent it out for £1450 per month. I was like "what?". "Its an investment" my neighbour said. I havent done the calculations, but I have the impression that everyone is doing this because in my neighbours words "Property is the place to put your money".

Despite me highlighting that property cannot continue to go up at the previous 6 years startling rate, he still thinks its the way forward.

Shall I go and do it as a long term investment, everyone else is doing it!!

Maybe he believes that buying it for £450k was too good a deal to miss. If he makes £50k profit in a couple of years it will have been worth it.

That's the secret of making money from propety, buy a bargain and sell it on or keep it if you can afford to.

I did the same myself last year. I bought a BTL because it had tenants but it was so cheap I bought it anyway and it's now worth nearly 25% more (subject to usual bear debate)

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Houses are like any other investment, they go up and down in the short term, but will always increase in value over the longer term.

Tell that to the Japanese, or the people of Beirut.

Maybe he believes that buying it for £450k was too good a deal to miss. If he makes £50k profit in a couple of years it will have been worth it.

50,000 pounds in two years on a 450k cash 'investment' is about 5% per year. Barely worth getting out of bed for, and probably below the real rate of inflation... way below if they end up paying tax on it.

Edited by MarkG

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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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