A seller drops their price substantially is this a sign of our times?

mewbie_2

chucky wrote: »

if you want a fund manager investing where he wants and making money from you through charges go for it. otherwise do your own research

if you want individual equities go for Primary Health Properties they're pretty cheap at the moment with a decent dividend.

Do you think borrowing money to invest would be sensible?

chucky

mewbie wrote: »

Do you think borrowing money to invest would be sensible?

if the rate you borrow at is cheaper than the income you are receiving - obviously yes.

and also capital value is maintained through tax efficiencies, inflation or even HPI.

mewbie_2

chucky wrote: »

if the rate you borrow at is cheaper than the income you are receiving - obviously yes.

and also capital value is maintained through tax efficiencies, inflation or even HPI.

Would it make sense to MEW every bit of equity out of my existing property and jump in now?

HAMISH_MCTAVISH

mewbie wrote: »

You never, ever, include interest payments in your calculations. Interest Hamish. It's dead money.

:rotfl:

OK you pedant, interest for the same time frame on a tracker, around 10K.

So now the buyer would be around 12K up versus the renter. But even if on a fix, and paying a similar amount to rent, the buyer would still be two years closer to paying off the mortgage. Thereby gaining two years rent/mortgage free in their life that the renter would not have.

Interest is far from dead money, as the sooner you start paying it the sooner you get to live rent/mortgage free. Every year of renting is another year of lifetime housing cost you need not be paying for.

mewbie_2

HAMISH_MCTAVISH wrote: »

Interest is far from dead money, as the sooner you start paying it the sooner you get to live rent/mortgage free.

No - interest is the charge for the loan. Now paying off capital is a different matter.

chucky

mewbie wrote: »

Would it make sense to MEW every bit of equity out of my existing property and jump in now?

up to you.

HAMISH_MCTAVISH

mewbie wrote: »

No - interest is the charge for the loan. Now paying off capital is a different matter.

:rolleyes:

You know full well what I meant.

Yes, of course, people should be paying off capital as well. As they will be on all "normal" repayment mortgages.

nembot

I rent a place that was up for 325k 9 months ago, rent is £600 per month.

I'd really like to know where can you buy a place for £188k and get a £1000 pcm back in rent, as this would suggest a yield of almost 7% - which we all know is rubbish at present.

Excluding Hamish's street obviously, because that bucks the trend.

HAMISH_MCTAVISH

nembot wrote: »

I'd really like to know where can you buy a place for £188k and get a £1000 pcm back in rent, as this would suggest a yield of almost 7% - which we all know is rubbish at present.

As we all know, such sweeping generalisations are rubbish.

Heres a list of 10 places where rental yields average between 7% and 12%.

There are plenty of others.

http://timesbusiness.typepad.com/money_weblog/2009/07/the-top-ten-buytolet-hotspots.html

Excluding Hamish's street obviously, because that bucks the trend.

My market does average between 6% and 8% depending on property type. Many others do too.

The average UK gross yield now stands at 4.57% compared to 4.55% a month before.

Yields for flats are also up from 5.16 to 5.19% as are rental yields on houses which have risen from 4.33% to 4.35%.

This can be explained by rents which are now rising after falling during the latter part of last year.

http://www.!!!!!!!!!!!!!!!!!!!!/index.php?page=news&id=644

Oh, and if you want me to publically humiliate you with any more facts which disprove your assertions, I'm here all day.;)

IveSeenTheLight

mewbie wrote: »

You never, ever, include interest payments in your calculations. Interest Hamish. It's dead money.

We'll an average property at £188,000 with a 10% deposit would leave a mortgage of £169,000 (so the highest mortgages currently available, this would on average be lower)

If the mortgage was paid at 6% (let's face it, many have, are and would have been paying a lot less) it would be £10,140 per year.

Therefore it would be as a minimum £100 in the first year better off buying taking off the paper loss or £1,860 better of if comparing like for like.

A lower mortgage (due to higher deposit) and lower mortgage rate would mean even better return to buy