Thursday, January 14, 2010
We Get a Fee for Managing the Fund Whatever Happens
To raise up to Â£300m, which would be bolstered by debt. Most will be invested in homes worth Â£500,000 to Â£800,000. The fund could buy up to 500 properties, which would be let to provide a target rental income yield of 3.5 per cent (before costs). Most of the returns, targeted at 14.5 per cent a year, are expected to come from capital growth of the properties. !!! Further explanation from the manager at FT Advisor, "He said in the long-term there could be a shortage of properties thanks to the effect of the credit crisis on building and lack of liquidity for borrowers, fuelling rental demand." Errr? So borrowers won't be able to borrow so they can't buy and must rent, therefore target of 14.5% a year coming from rising prices is because all those would be buyers are renting??