Bears, Buy to Lets landlords and House Prices.

System

damanpunk wrote: »

I'd leave him alone, he was the exact same on the first website I came across him on, www.uk-mkivs.net infact heres one of his posts where he wanted to be a landlord himself http://uk-mkivs.net/forums/p/137320/916622.aspx#916622 the rest were like on here, always after some drama.

Huh? How are you linking Graham to "W36 EJO"?

mbga9pgf

Harry_Powell wrote: »

Can you clue us up on what you consider is a better investment at the moment?

As with in any deflationary environment, stay in cash.

There isnt going to be a good investment opportunity. Thats what happens when you get rampant deflation. There is risk associated with gilts at the moment that means I wouldnt touch them with a bargepole, especially considering the low return on them at present. I know their face value is increasing with deflation, but the risk of default for me just does not justify the yields.

Being a good investor is all about realising sometimes, its best not to invest your cash and instead sit it out.

I am doing the same. As soon as the FTSE bottoms again (mid-late 2010) I will be investing heavily to pick up the next upswing, and will be diversifying across sector boundaries and will probably fill me boots with a few commodities (NOT the yellow stuff though)...

My issue with btl is that as an investment, its about al illiquid as you can get. you cant just go online and click "sell" when something happens that massively changes and your reasons for investing change massively.

Graham_Devon

LOL Damian, you have got bitter!

Didn't "want" to be, was looking at it as an option. Didn't take it based on information I recieved and gained from HPC, here and there.

I don't know what your issue is, seems your invested, I'm not, and I didn't follow people up !!!!!! creek because I thought it was too dodgy. Simple as.

Did a lot of research into it and decided in the end it was all going to topple down. It did.

Quit the stalking stuff

Wookster

misskool wrote: »

Why does the house price/earnings ratio HAVE to be about 3.5? Why does every graph/bears have that number to drop to?

surely the wages/spending capacity and the fact that most households are now dual income show house price/earnings ratio should/could be higher?

I'm not baiting anyone, I just don't see how a ratio that is used in 1940s/1950s should still be valid today.[/QUOTE]

3.5 is the long term average (i.e. if you drew a best fit line it would be at a PE of 3.5). Its not artificially set, but it is the average number since the graph starts. A departure away from this average will have a causation e.g. very low interest rates (as was the case in 2001-1007) meaning that it is cheaper to service debt and that more can be taken on (often recklessly, as we have just seen).

misskool wrote: »

edit to add: I find your schtick graph remarkable offensive. If you want to have a proper reasoned discussion, please don't descend to a sexist pig, it makes you look weak.

Aren't you being a bit touchy here? I'm sure the OP didn't create the graph himself, he just posted it to illustrate a point. Perhaps this is insight into why moderation fails on this board.

mbga9pgf

I am still waiting to see how you can get 7% on a btl as well over the long term taking account of all costs.

Not seen a single example put forward to far as to prove it, using a legal BTL product with its associated higher IR and costs, management fees, accounting for repairs, wear and tear as well as accounting for tennant default.

It costs me nothing to put my cash in the bank.

penguine

misskool wrote: »

edit to add: I find your schtick graph remarkable offensive. If you want to have a proper reasoned discussion, please don't descend to a sexist pig, it makes you look weak.

I think the point of the Schick graph is to show that there is a historical association between hemlines and the economy. Funny thing that, I've noticed quite a few women wearing very long dresses lately, so long they were in danger of stepping on their hems and falling over. So obviously there's some deep subconscious concerns about the state of the economy at the moment.

There's supposed to be a similar correlation between width of men's ties and the economy as well. I think it's the wider the tie the worse off the economy is.

Harry_Powell

mbga9pgf wrote: »

As with in any deflationary environment, stay in cash.

There isnt going to be a good investment opportunity. Thats what happens when you get rampant deflation. There is risk associated with gilts at the moment that means I wouldnt touch them with a bargepole, especially considering the low return on them at present. I know their face value is increasing with deflation, but the risk of default for me just does not justify the yields.

Being a good investor is all about realising sometimes, its best not to invest your cash and instead sit it out.

I am doing the same. As soon as the FTSE bottoms again (mid-late 2010) I will be investing heavily to pick up the next upswing, and will be diversifying across sector boundaries and will probably fill me boots with a few commodities (NOT the yellow stuff though)...

My issue with btl is that as an investment, its about al illiquid as you can get. you cant just go online and click "sell" when something happens that massively changes and your reasons for investing change massively.

Do we have rampant deflation at the moment? I have only seen deflation with house prices and so keeping your money in cash only makes sense if you're going to use that cash to buy a house (as I am). Everything else I buy seems to be getting more, not less expensive.

mbga9pgf

Yep, thats right. But my deposit is only going to get used for buying a house, so whats the problem?

All asset classes are devaluing, shares, house prices etc, Its deflation. You cant have it any other way with this much debt. The way I see it, we have already lived through the inflationary phase with the expansion of credit. What we are now seeing is the long follow on to this; a return to nominal values of interest rate, asset price and credit availability. Thats why we are in so much pain. We HAVE to get used to a living standard that we had say 15 years ago.

Commodities prices will increase (are increasing) food etc, you could argue we are facing a biflationary envioronment. Doesnt bother me in the slightest. We need to pay more for our produce, perhaps chavs and doleites would be a little thinner and farmers would be rewarded for their hards work. If I have to pay more per shop to achieve that, wouldnt bother me in the slightest.

chucky

Graham_Devon wrote: »

Didn't "want" to be, was looking at it as an option.

lol - you were going to become a landlord but didn't understand the complexities... hahaha

being someone who likes to highlight other posters for not answering questions put to them... you still haven't answered the questions put to you... nothing to back your statements up again...

mbga9pgf

Do you mean like my unanswered question from above chucky that you BTL Piggies seem to be struggling with?