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Pussay Patrol  02 Mar 19 9.56pm |
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Originally posted by Hrolf The Ganger
You hate people with money, We get it. Not necessarily, I just think they should put some more of it back into the system
Paua oouaarancì Irà chiyeah Ishé galé ma ba oo ah |
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 YT  Oxford 02 Mar 19 10.12pm |
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Originally posted by Hrolf The Ganger
I get that but how is this yield calculated? How do we arrive at a figure of 4% on a property with no mortgage on it and a rent in excess of the monthly costs of actually buying the property? It's (Increase in capital value + Rent - Expenses) X 100 ÷ initial capital value Edit: sorry, I've just understood your question a bit better, Hrolf. This is the formula, but I suspect you are saying how can the answer be as little as 4%, but I don't have the statistics and wasn't the one to make that claim. Edited by YT (02 Mar 2019 10.14pm)
Palace since 19 August 1972. Palace 1 (Tony Taylor) Liverpool 1 (Emlyn Hughes) |
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| ChrisGC Wantage 03 Mar 19 8.38am |
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Originally posted by YT
It's (Increase in capital value + Rent - Expenses) X 100 ÷ initial capital value Edit: sorry, I've just understood your question a bit better, Hrolf. This is the formula, but I suspect you are saying how can the answer be as little as 4%, but I don't have the statistics and wasn't the one to make that claim. Edited by YT (02 Mar 2019 10.14pm) As little as 4% is still a lot better than you get in the bank, plus property long term will yield a capital gain.
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| ChrisGC Wantage 03 Mar 19 8.52am |
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Originally posted by Hrolf The Ganger
I get that but how is this yield calculated? How do we arrive at a figure of 4% on a property with no mortgage on it and a rent in excess of the monthly costs of actually buying the property? The yield represents the growth of your money when compared to just having it sat in a bank, the mortgage isn't relevant. For example, if you've got a house that's worth 100k (keep the maths easy) which you own outright, you might be getting a 5% yield on the rent compared to if you had that same amount sat in a bank where the interest rate is what? Not even 1%? Add to that your asset should be increasing in value. If you've got 150k cash, rather than have it in a bank you're better off buying a nice flat in Manchester and letting it out. You'll receive around 6- 6.5% compared to 1% or 0.5% in the bank where your money is actually shrinking. In ten years time the property won't have increased in value much, so if you're getting a mortgage to fund your investment (a buy to let) you're better off buying a property further south, getting 4% yield (once mortgage and letting fees are paid you're probably breaking even) and selling the property in 15 years time when it's doubled in value. Not all landlords are scumbags. I'm involved in two projects (one of each of the above) with the aim of providing myself a pension and funding the children's education. I use reputable letting agents that take 10% and believe me, the tennants do very well and have powers of their own.
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cryrst  The garden of England 03 Mar 19 9.21am |
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Originally posted by Pussay Patrol
Not necessarily, I just think they should put some more of it back into the system Socialist thought process.
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| Pussay Patrol 03 Mar 19 11.14am |
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Originally posted by cryrst
Socialist thought process. Logical thought process house prices are out of control and unaffordable for a person on average earnings. People shouldn't make money from property, if they want to invest in a property which they pass down to their kids fine, but not to increase their wealth. If someone's making money another person is suffering so you have to redress the balance. Tax earnings on 2nd properties and use that to fund help to buy schemes
Paua oouaarancì Irà chiyeah Ishé galé ma ba oo ah |
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| ChrisGC Wantage 03 Mar 19 11.17am |
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Originally posted by Pussay Patrol
Logical thought process house prices are out of control and unaffordable for a person on average earnings. People shouldn't make money from property, if they want to invest in a property which they pass down to their kids fine, but not to increase their wealth. If someone's making money another person is suffering so you have to redress the balance. Tax earnings on 2nd properties and use that to fund help to buy schemes This is envy, not fact.
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| Pussay Patrol 03 Mar 19 11.23am |
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Originally posted by ChrisGC
This is envy, not fact. what's your point?
Paua oouaarancì Irà chiyeah Ishé galé ma ba oo ah |
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| ChrisGC Wantage 03 Mar 19 11.36am |
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Originally posted by Pussay Patrol
what's your point? My point is that it's dangerous to base a political belief on a personal feeling such as envy. I apologies for assuming your background, but I imagine it's similar to mine: state educated, left school at sixteen and have worked hard. I'm 33 now and I have a buy to let and a property i share ownership of which I let out, along with my own mortgaged house that I live in. I work very hard to sustain these properties, running a company full time (I'm at my desk now coincidentally sorting the week's work out for the lads whilst my children miss me at home) with a view to retiring in 25 years on the profits (I don't have a pension) yet despite this I should be taxed double so that somebody who has had exactly the same start in life/opportunity can maybe get a leg up? The big flaw in these socialist policies? As soon as they're implemented I'd sell up and go somewhere where hard work pays off. As would everyone else who can afford to. Leaving only the takers. Who do you tax to subsidise the new homes then?
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 Hrolf The Ganger 03 Mar 19 11.45am |
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Originally posted by ChrisGC
The yield represents the growth of your money when compared to just having it sat in a bank, the mortgage isn't relevant. For example, if you've got a house that's worth 100k (keep the maths easy) which you own outright, you might be getting a 5% yield on the rent compared to if you had that same amount sat in a bank where the interest rate is what? Not even 1%? Add to that your asset should be increasing in value. If you've got 150k cash, rather than have it in a bank you're better off buying a nice flat in Manchester and letting it out. You'll receive around 6- 6.5% compared to 1% or 0.5% in the bank where your money is actually shrinking. In ten years time the property won't have increased in value much, so if you're getting a mortgage to fund your investment (a buy to let) you're better off buying a property further south, getting 4% yield (once mortgage and letting fees are paid you're probably breaking even) and selling the property in 15 years time when it's doubled in value. Not all landlords are scumbags. I'm involved in two projects (one of each of the above) with the aim of providing myself a pension and funding the children's education. I use reputable letting agents that take 10% and believe me, the tennants do very well and have powers of their own. Thanks for taking the time. So it's basically the investment in property/rent return compared to other types of investment at the going interest rate. Once again the cost of the property itself seems to be the key factor in driving up rental charges. I'm loathed to say it once again, but immigration must be a big factor in that.
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| Pussay Patrol 03 Mar 19 11.56am |
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Originally posted by ChrisGC
My point is that it's dangerous to base a political belief on a personal feeling such as envy. I apologies for assuming your background, but I imagine it's similar to mine: state educated, left school at sixteen and have worked hard. I'm 33 now and I have a buy to let and a property i share ownership of which I let out, along with my own mortgaged house that I live in. I work very hard to sustain these properties, running a company full time (I'm at my desk now coincidentally sorting the week's work out for the lads whilst my children miss me at home) with a view to retiring in 25 years on the profits (I don't have a pension) yet despite this I should be taxed double so that somebody who has had exactly the same start in life/opportunity can maybe get a leg up? The big flaw in these socialist policies? As soon as they're implemented I'd sell up and go somewhere where hard work pays off. As would everyone else who can afford to. Leaving only the takers. Who do you tax to subsidise the new homes then? so because you don't have a pension you are using the property market or more to the point other people's income's at the bottom of the ladder to subsidise that? and what sustains the strength in the value of your property empire is the fact those people can't afford to buy them? I don't believe in a have and have not system where the haves make money out of the have nots. I would mkae the haves give back so it's more balanced I also don't think because a young family cannot afford a new house and get turned down for a mortgage and are at the mercy of the high rental market is envy Edited by Pussay Patrol (03 Mar 2019 11.58am)
Paua oouaarancì Irà chiyeah Ishé galé ma ba oo ah |
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| Mapletree Croydon 03 Mar 19 12.11pm |
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Originally posted by Pussay Patrol
so because you don't have a pension you are using the property market or more to the point other people's income's at the bottom of the ladder to subsidise that? and what sustains the strength in the value of your property empire is the fact those people can't afford to buy them? I don't believe in a have and have not system where the haves make money out of the have nots. I would mkae the haves give back so it's more balanced I also don't think because a young family cannot afford a new house and get turned down for a mortgage and are at the mercy of the high rental market is envy Edited by Pussay Patrol (03 Mar 2019 11.58am) Oh dear What would you rather people invest in, BitCoins like Tux recommends? At least renting out housing benefits people. Nowadays in London there is no capital accumulation, so it's only providing a modest return. Probably lower than equities. There is a need for a private rental sector. Full stop. The fact that rents are high is solely a function of the cost of housing, given the returns aren't high. It isn't profiteering, simple ROCE calculation.
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