Sunday, March 4, 2007
Is ARLA culpable?
For a geared investment, the Association of Residential Letting Agents (ARLA) are telling people they can make 21.97% a year. Well, who wouldn't if they could? However they are v. selective in their assumptions e.g. exclude letting and maintenance costs and assume average capital appreciation every year of 8.66% pa. ARLA claim to be a professional association for private landlords - but their vested interests leave them open to the charge that they are actually ramping unregulated investment schemes to the unwary leading to a buy-to-let and house price bubble. (by the way, even on their definition of Net Yield, this is now negative. God only knows what it would be if you actually had to take costs into account).