Iotrez Posted July 9, 2007 Share Posted July 9, 2007 Hi all, If there is a big housing crash, are people on this forum going to start investing in property and buying up lots of houses after the crash. After previous crashes property prices then rise up again. Are people here going to adopt a buy low sell high strategy with property? Quote Link to comment Share on other sites More sharing options...
dirge Posted July 9, 2007 Share Posted July 9, 2007 Guess some people would, I'm just a first time buyer knowing the markets turning and waiting till I can get a decent deal on falling prices. Quote Link to comment Share on other sites More sharing options...
Guest The_Oldie Posted July 9, 2007 Share Posted July 9, 2007 Not lots, but I am intending to buy two. One in France, to live (retire) in and one here as a UK base. Quote Link to comment Share on other sites More sharing options...
Disillusioned Posted July 9, 2007 Share Posted July 9, 2007 Just the one... not an investment though... to live in! Quote Link to comment Share on other sites More sharing options...
Fancypants Posted July 9, 2007 Share Posted July 9, 2007 I *may* "invest" in a home. But notwithstanding the ethical dubiousness of property as an investment vehicle, I suspect the catharsis of the crash will kill property as a mass money-maker for at least a generation. Quote Link to comment Share on other sites More sharing options...
NotMyHouse Posted July 9, 2007 Share Posted July 9, 2007 Nope. When there is a crash, we plan to buy a house with some land, hopefully without a mortgage. The UK crash is looking inevitable. The experience of Japan suggests that the rise after the crash may not be inevitable. Quote Link to comment Share on other sites More sharing options...
Chazza Posted July 9, 2007 Share Posted July 9, 2007 I *may* "invest" in a home. But notwithstanding the ethical dubiousness of property as an investment vehicle, I suspect the catharsis of the crash will kill property as a mass money-maker for at least a generation. Personally yes. If the market approached a level which looked like value, tho hard to call if it does indeed crash, and you can get a decent yield in a good location, I would 'fill my boots'... Quote Link to comment Share on other sites More sharing options...
MarkG Posted July 9, 2007 Share Posted July 9, 2007 Uh, no. Who wants to be a bloody landlord? Quote Link to comment Share on other sites More sharing options...
Selling up Posted July 9, 2007 Share Posted July 9, 2007 I would never buy property for a capital gain - I'm too much of a natural bear by temperament to do that. I don't own even a house to live in at the moment but one day after I've bought then I'll look into property investment: If the figures added up then I would contemplate buying a rental property for the yield. I would not factor capital gains into my calculations except to assume that the house price will probably keep track with inflation. Obviously at today's prices one couldn't buy property for the yield. But after a crash, maybe... While landlords aren't exactly popular on this site, I think that landlords who consider property to be an income-generating investment, not a speculation, are not particularly socially damaging: They have an interest in keeping their tenants happy, and would not buy at bubble prices (such as now), thus contributing little to HPI. Quote Link to comment Share on other sites More sharing options...
Guest The_Oldie Posted July 9, 2007 Share Posted July 9, 2007 Personally yes. If the market approached a level which looked like value, tho hard to call if it does indeed crash, and you can get a decent yield in a good location, I would 'fill my boots'... If the market drops, pauses, and then falls again after you have "filled your boots", you could end up "filling your pants" Quote Link to comment Share on other sites More sharing options...
Guest tbatst2000 Posted July 9, 2007 Share Posted July 9, 2007 Hi all,If there is a big housing crash, are people on this forum going to start investing in property and buying up lots of houses after the crash. After previous crashes property prices then rise up again. Are people here going to adopt a buy low sell high strategy with property? If the rental yield hits 10% (as it did where I live in 1992), then yes. Assuming otherwise, I'd just like to buy a bigger house without having to liquidate all of my other investments and commit myself to another 10 years work. Quote Link to comment Share on other sites More sharing options...
sossij Posted July 9, 2007 Share Posted July 9, 2007 (edited) I don't think so. There seems little point in saddling myslef with a 25 year debt, crash or no crash, in light of the uncertainty over future oil supplies, global warming etc. I'm going to remain debt free and as mobile as possible in case I need to get to New Zealand fast! Edited July 9, 2007 by sossij Quote Link to comment Share on other sites More sharing options...
Leonard Hatred Posted July 9, 2007 Share Posted July 9, 2007 Yes. Then I'll ring up Kirstie & Phil, who will be living on the street by then, and offer it to them for four times what I paid, stating that "there's never been a better time to buy." Quote Link to comment Share on other sites More sharing options...
It is different this time Posted July 9, 2007 Share Posted July 9, 2007 Are People Here Going To Invest In Property? I might have a couple of flats, you know it is for my pension If the market drops, pauses, and then falls again after you have "filled your boots", you could end up "filling your pants" Quote Link to comment Share on other sites More sharing options...
buylowsellhigh! Posted July 9, 2007 Share Posted July 9, 2007 Hi all,If there is a big housing crash, are people on this forum going to start investing in property and buying up lots of houses after the crash. After previous crashes property prices then rise up again. Are people here going to adopt a buy low sell high strategy with property? It's all in the name! Quote Link to comment Share on other sites More sharing options...
JumboMills Posted July 9, 2007 Share Posted July 9, 2007 Predicting the peak of decline in a market is just as difficult as predicting the peak of growth. It could take a year for prices to shoot up again or it may take 20. Property investment is always a medium to high risk venture in my opinion. But in answer to the question, yes - I intend to buy in France and Portugal. Quote Link to comment Share on other sites More sharing options...
Objective Developer Posted July 9, 2007 Share Posted July 9, 2007 I will be difficult to buy without a sizable deposit, which I don’t at the moment have. That said, I may look abroad as the weather here gets to me and my family is spread all over the world anyway. But hypothetically yes, I would look to buy. And yes, I would consider investing in more than one. Call me BTL scum if you like, but I’ll be buggered if I’m not going to do my utmost to ensure a happy life for my self and any future generations, and if history does repeat, then property will be a good place to put cash (as long as you are ‘in it for the long haul’ ;-) Quote Link to comment Share on other sites More sharing options...
Guest DissipatedYouthIsValuable Posted July 9, 2007 Share Posted July 9, 2007 I intend to live in a tree as protest about all this housing and investment nonsense. Quote Link to comment Share on other sites More sharing options...
Chazza Posted July 9, 2007 Share Posted July 9, 2007 If the market drops, pauses, and then falls again after you have "filled your boots", you could end up "filling your pants" As I said, if I can see value in a good location, and I maybe I should have said, it could fund itself, then if you go in with open eyes, who cares if it goes down further. Buy more if you believe in it. Whilst I agree, that if you were doing this levergaed on 5 times salary there would be a cretain amount of 'pant filling' when it could no longer be financed. That would not be my strategy Quote Link to comment Share on other sites More sharing options...
Fergie Posted July 9, 2007 Share Posted July 9, 2007 (edited) It's an interesting question. I'm honestly not sure. It's easy with hindsight to think I wish I'd invested when prices were really low, but that's always been the case (if only I'd bought Microsoft shares in the 1960s...). So there's a tendency to think that if prices would only fall again, I'd buy low and watch prices rise again. In reality, it's just not that simple. For one thing, there's being able to invest. Banks won't normally lend peope massive sums of money to speculate. They do it in bubbles: heck, they'll chuck money at investors in bubbles. It happened in 1920s America, it's happening now. If you imagine walking in asking a bank to lend you £250,000 to invest in the stock market, you can see the problem though. In or just after a crash, you'd need to be actually wealthy to be able to invest in property (as in invest, rather than just buy to live in). You also have to take sentiment into account. In a rising market, areas are always up-and-coming, being regenerated, gentrifying etc, etc. In a crash, it's going the other way. Estates might be failing - lots of empty property, vandalism, crime, places boarded up, possibly even council/housing associations taking over. Last crash, there were entire streets up for sale. It takes a very brave person to invest in those kind of places because - sure - they might go up again in 5 or 10 or 20 or 30 years. On the other hand, you could be in for a very long haul trying desperately to keep them from being trashed or deteriorating. So you'd have to imagine a complete change of sentiment. Edited July 9, 2007 by Fergie Quote Link to comment Share on other sites More sharing options...
Chazza Posted July 9, 2007 Share Posted July 9, 2007 It's an interesting question. I'm honestly not sure. It's easy with hindsight to think I wish I'd invested when prices were really low, but that's always been the case (if only I'd bought Microsoft shares in the 1960s...). So there's a tendency to think that if prices would only fall again, I'd buy low and watch prices rise again. In reality, it's just not that simple. For one thing, there's being able to invest. Banks won't normally lend peope massive sums of money to speculate. They do it in bubbles: heck, they'll chuck money at investors in bubbles. It happened in 1920s America, it's happening now. If you imagine walking in asking a bank to lend you £250,000 to invest in the stock market, you can see the problem though. In or just after a crash, you'd need to be actually wealthy to be able to invest in property (as in invest, rather than just buy to live in). You also have to take sentiment into account. In a rising market, areas are always up-and-coming, being regenerated, gentrifying etc, etc. In a crash, it's going the other way. Estates might be failing - lots of empty property, vandalism, crime, places boarded up, possibly even council/housing associations taking over. Last crash, there were entire streets up for sale. It takes a very brave person to invest in those kind of places because - sure - they might go up again in 5 or 10 or 20 or 30 years. On the other hand, you could be in for a very long haul trying desperately to keep them from being trashed or deteriorating. So you'd have to imagine a complete change of sentiment. Agreed, good point. Trying to finance the falling knife would be problematic Quote Link to comment Share on other sites More sharing options...
benj Posted July 9, 2007 Share Posted July 9, 2007 If there is a big housing crash, are people on this forum going to start investing in property and buying up lots of houses after the crash. I would only ever buy a residential property for me and my family to live in. Directly holding a very small number of houses or flats is not a safe investment strategy. Particularly if you have to use a lot of leverage to buy them. Houses are a capital asset and by nature they require maintenance, especially when tenants are installed. That's not how I want to be spending my precious hours. (I mean, if I were a landlord, where would I find the time to post on here? ) And capital gains (and losses) on individual properties are extremely hard to predict and tend to happen over quite long timescales, since they're mainly driven by social shifts (and short-term bubbles, ahem). If the property market ever looks like it's good value again, there are plenty of ways to obtain exposure to it without buying property directly. The most stable long-term yields come from commercial property in any case. Property funds and shares in building firms are a much better bet - very liquid, easy to buy and sell, easy to gauge valuation, easy to hold in an ISA or pension fund, more diversified, and zero maintenance. Quote Link to comment Share on other sites More sharing options...
benj Posted July 9, 2007 Share Posted July 9, 2007 (if only I'd bought Microsoft shares in the 1960s...). You'd have had a job - Microsoft didn't go public until 1985! But what you're saying is quite true - it's easy to spot great investments with hindsight, but "calling the bottom" or spotting the "next big thing" in any sphere of investment requires a lot of skill, judgement, knowledge, research, common sense, and not an inconsiderable amount of luck. Quote Link to comment Share on other sites More sharing options...
markyh Posted July 9, 2007 Share Posted July 9, 2007 (edited) After the crash I will buy a family home with a low mortgage, but I'm only looking for a 25% drop so a 300k house goes back to £225k and back to 1% stamp duty. But saying that, as I have patiently watched interest rates, press sentiment, and the gov monthly HPI index to make the decision to STR recently, I will probably do the reverse as to BTO (Buy To Occupy, I am claiming this now for the new site www.housepricerise.co.uk from 2010 to 2025) long as I can before the wife gets fed up of renting. As it looks at the moment due to schools renting looks better for the next 3 years for us. If however, the market has dropped to the bottom within 3 years, and has dropped 50% or more, and interest rates are dropping and fix rates are getting reasonalbe again and prices are leveling again like in 95 / 96, I will be tempted to put 1/2 my STR pot into an 3 bed BTL if I could fix for a few years and the rent level paid the interest and capital and a bit on top. I say this as we are looking a decent 3 beds now to rent and they go like hot cakes i Aylesbury if you have a 3 bed on a good estate and a garage. I wouldn't touch 1 or 2 beds as there is a glut of them, two much competition. Yes, If I could by a nice 3 bed with garage that is currently £250k for £125k, I would be tempted to put £50k of my pot into it and rent it out with a £75k mortgage. That would leave me with £75k to put down on my 4 bed family home which would have dropped from £300k to £150k, so a £75k mortgage too. With the renters buying the 3 bed for me, I could afford a few voids here and there If I only had a £75k mortgage on the family home. One can dream i guess, it depends on how far the market drops, how soon, and how many others locally who have STR now with a big pot of cash are compeating with us. M Edited July 9, 2007 by markyh Quote Link to comment Share on other sites More sharing options...
Imp Posted July 9, 2007 Share Posted July 9, 2007 I'm just waiting for the cost of land to become sensible, then I'll build the house I want to die in in 40 years time (assuming I live my 3 score year and ten). Once I've built it, I won't care what it's worth because it will be priceless to me. Quote Link to comment Share on other sites More sharing options...
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