Titanic news: 90% of landlords decide to 'ride out' ice berg

macaque_2

Gorgeous_George wrote: »

Petrol has fallen from £1.30 per litre to just 89p. Shell should sell up quick.
GG

Shell made a gross profit of $65 billion on total assets of $280 billion. Thats about 23%. What was your total profits against asset value? 2%? 4%? (and I won't ask about profit after capital depreciation)

mower5

Lotus-eater wrote: »

I suggest you relook at your figures then and include all the things that stevetodd mentioned, also not being able to buy at the top of the market due to the real life problem of not knowing when it is till its gone.
Its all very well sitting there at home saying everyone is the same, sell blah blah now and buy back when the market has dropped another 20% blah, if you want to do it fine, or if you want to play fantasyhouseBTLportfolio I'm sure its very easy to buy and sell just like that <snaps fingers> but in RL its not.

The OP was using as the example his mate who bought/developed houses 9+ years ago, fairplay :beer: . He has seen huge increase in his capital value because of the bubble and now is a chance to realise some of the money, so whats the problem with that? Why the anger? I think Stevetodd may be right with all his figures and all his assertions but i still say having so many eggs in one basket is a high risk strategy.

Lotus-eater

mower5 wrote: »

but i still say having so many eggs in one basket is a high risk strategy.

Ahh yes, but thats very different to saying everyone with a BTL is stupid for not selling up now and buying back later when prices have fallen.

I wouldn't mind to have the chance to have 9+ houses, mortgage free, providing me with income thanks. I can't see me selling them either. I'd just be sitting at my carp lake that I won on the house lottery, never looking at the prices of houses, cos I couldn't care less

Gorgeous_George

macaque wrote: »

Shell made a gross profit of $65 billion on total assets of $280 billion. Thats about 23%. What was your total profits against asset value? 2%? 4%? (and I won't ask about profit after capital depreciation)

My yield versus current market value is about 6.3%. I'm happy not to be seen in the same light as Shell. I'd struggle to find 6.3% with any other investment.

My yield against purchase price is somewhat higher and Shell can only dream of making such great returns.

Interestingly, prices for houses like my BTL have not moved over the last year or so. I know because I keep looking - just in case a bargain comes onto the market.

GG

macaque_2

Gorgeous_George wrote: »

My yield versus current market value is about 6.3%. I'm happy not to be seen in the same light as Shell. I'd struggle to find 6.3% with any other investment.

My yield against purchase price is somewhat higher and Shell can only dream of making such great returns.

Interestingly, prices for houses like my BTL have not moved over the last year or so. I know because I keep looking - just in case a bargain comes onto the market.

GG

House prices fell by 16% (or thereabouts) last year. If you are making making 6.3%, your rental income must be in excess of 20% of the property value. Well done!

When Shell strike oil in a new field, the uplift in value can go from $thousands to $billions. You seem to be suggesting that you are making more than this in capital appreciation. Well done again!

silvercar

Lotus-eater wrote: »

Very well said.

I can't believe some of the people on here are seriously advocating selling up a portfolio of houses to buy back when the house prices are higher again. This is real life, not some numbers on a piece of paper!

Yet people have done that with their residential home and are patting themselves on the back before they have done the buy back.

Lotus-eater

silvercar wrote: »

Yet people have done that with their residential home and are patting themselves on the back before they have done the buy back.

If you have timed it right then you might have made quite a bit of money by the end of the crash.
Timing, timing, timing.
Its too late to sell now, too early to buy yet by the looks of it.

I wouldn't gamble with my families home though*, but if I was single or had a moveable life I might have considered it.

Lots of costs though and hassle. People like Pasturesnew was in the right place at the right time and that's probably the best way to do it. Then pray and pray that the market does fall

* besides, if you think I'm moving my greenhouse, raised beds and fruit trees you've got another thing coming.

stevetodd

silvercar wrote: »

Yet people have done that with their residential home and are patting themselves on the back before they have done the buy back.

There's a big difference in the comparatively small effort to selling the property you live in compared to selling a number of BTL properties, in addition to the effort involved there is:

Rental voids whilst selling
Loss of rental yield
We are now probably over halfway down from the overall % drop

Additionally some STR's may not have had great mortgage tracker products and/or perhaps they knew in the back of their minds that they would prefer to have a different house/flat (larger/smaller) or different location in a few years which would have meant selling at some point anyway.

Mr_Matey

macaque wrote: »

House prices fell by 16% (or thereabouts) last year. If you are making making 6.3%, your rental income must be in excess of 20% of the property value. Well done!

That's not what he said. He said he's making 6.3% on the current property value. He may have had capital losses over the past year, but if his rental yield versus purchase price is higher than 6.3%, he's made capital gains overall.

Gorgeous_George

I'm also saying that I bought to LET. I did not buy it to make as much money as possible.

And while prices have fallen by 16.5%, mine hasn't - yet! It is worth about £80K - similar properties (but with three bedrooms rather than four) are still selling for around £80K. If I thought it would lose 50% over the next 12 months, I'd still keep it.

Selling would cost me a fair chunk of that £80K. How much would I need to be able to buy it back for to make the sale worthwhile? How much would my return be on the residue of the £80K? Less than 6.3% I bet.

Because I bought to LET I have maintained and improved the property to my standards. I have plans to do more work over time. Selling up and buying again would give me a house that I would need to impove all over again.

Selling would make my tenants homeless.

GG