Buying Cheaper Than Renting Everywhere except London

chucknorris

chucky wrote: »

that would be 65% off house prices now - good luck with that _party_

Come back with your 70% from peak falls Brit, you don't look so daft now, we've found someone else.

mewbie_2

IveSeenTheLight wrote: »

So the original post and link is wrong and you are right (yet to see your links prooving so)

I've been looking at this property
http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274569?ID=FGJKNHFO#picture

2 bed, valued at £110k.
Rental for a 2 bed city centre property in this area goes for £800 pcm.
That is an 8.72% rental yield.

£900 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274293?ID=FGJKNHFO#picture

£800 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274919?ID=FGJKNHFO#picture

£800 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274854?ID=FGJKNHFO#picture

£875 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274847?ID=FGJKNHFO#picture

£850 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274731?ID=FGJKNHFO#picture

£800 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274653?ID=FGJKNHFO#picture

£800 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274346?ID=FGJKNHFO#picture

£850 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274281?ID=FGJKNHFO#picture


To purchase this with only a 10% deposit and on a 5.95% mortgage would mean the C&I mortgage is £590 per month and the rent is 35% more expensive at £800 per month.

Comparably, the interest is £490 per month or 63% cheaper than the rent

At the risk or repeating myself, there are many places outside of London that do achieve better than 6% rental yield and where buying is cheaper than renting :rolleyes:

Soudns too good to be true. 8% yields. Compared to the boom years where the novices were buying on yields of 0 or 1%. So why hasn't anyone bought these properties? Snapped them up? Maybe you need to improve your touting skills.

But here really isn't the place. There's only a few people, if you discount aliases.

nearlynew

BTL landlords didn't give a stuff about yields 3 years ago.
Most of them didn't even know what it meant, let alone how to calculate it.

It was all based on capital appreciation.
It's only since the assumed, automatic HPI has been removed that they start mentioning yields in an attempt to justify their purchase.

I'm not necessarily having a go at anyone on here, but generally, that is the case.

Entertainer

IveSeenTheLight wrote: »

So the original post and link is wrong and you are right (yet to see your links prooving so)

I've been looking at this property
http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274569?ID=FGJKNHFO#picture

2 bed, valued at £110k.
Rental for a 2 bed city centre property in this area goes for £800 pcm.
That is an 8.72% rental yield.

£900 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274293?ID=FGJKNHFO#picture

£800 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274919?ID=FGJKNHFO#picture

£800 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274854?ID=FGJKNHFO#picture

£875 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274847?ID=FGJKNHFO#picture

£850 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274731?ID=FGJKNHFO#picture

£800 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274653?ID=FGJKNHFO#picture

£800 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274346?ID=FGJKNHFO#picture

£850 pcm http://www-n.aspc.co.uk/cgi-bin/public/LiveProperty/274281?ID=FGJKNHFO#picture


To purchase this with only a 10% deposit and on a 5.95% mortgage would mean the C&I mortgage is £590 per month and the rent is 35% more expensive at £800 per month.

Comparably, the interest is £490 per month or 63% cheaper than the rent

At the risk or repeating myself, there are many places outside of London that do achieve better than 6% rental yield and where buying is cheaper than renting :rolleyes:

What is it about uberbulls and Aberdeen on this site. All we need now is for JulieQ to announce that she lives there as well.:T

I don't really have the time to waste proving that black is black as opposed to white and arguing with someone who is determined to believe otherwise but...

These are all picked at random:

Maidstone, Kent 2 bed 130k:

http://www.rightmove.co.uk/property-for-sale/property-27277340.html?sortByPriceDescending=false&minPrice=125000&maxPrice=220000&displayPropertyType=flats&oldDisplayPropertyType=flats&pageNumber=1&fromSummary=true&backToListURL=%2Fproperty-for-sale%2FMaidstone.html%3FsortByPriceDescending%3Dfalse%26minPrice%3D125000%26maxPrice%3D220000%26displayPropertyType%3Dflats%26oldDisplayPropertyType%3Dflats

Typical rent £550 (5.08%)

http://www.rightmove.co.uk/property-to-rent/property-23595103.html?sortByPriceDescending=false&minBedrooms=2&pageNumber=1&fromSummary=true&backToListURL=%2Fproperty-to-rent%2FMaidstone.html%3FsortByPriceDescending%3Dfalse%26minBedrooms%3D2


Southampton, Hampshire 1 bed 115k

http://www.rightmove.co.uk/property-for-sale/property-22431415.html?locationIdentifier=REGION%5E64916&sortByPriceDescending=false&pageNumber=4&fromSummary=true&backToListURL=%2Fproperty-for-sale%2Ffind.html%3FlocationIdentifier%3DREGION%255E64916%26sortByPriceDescending%3Dfalse%26index%3D30

Typical rent £450pcm (4.7%)

http://www.rightmove.co.uk/property-to-rent/property-27317216.html?sortByPriceDescending=false&pageNumber=20&fromSummary=true&backToListURL=%2Fproperty-to-rent%2FSouthampton.html%3FsortByPriceDescending%3Dfalse%26index%3D190

Camberley, Surrey 1 bed 155k

http://www.rightmove.co.uk/property-for-sale/property-20109532.html?sortByPriceDescending=false&minPrice=125000&pageNumber=2&fromSummary=true&backToListURL=%2Fproperty-for-sale%2FCamberley.html%3FsortByPriceDescending%3Dfalse%26minPrice%3D125000%26index%3D10

Typical rent 650 pcm (5.0%)

http://www.rightmove.co.uk/property-to-rent/property-23491537.html?locationIdentifier=OUTCODE%5E1010&sortByPriceDescending=false&minBedrooms=1&displayPropertyType=flats&oldDisplayPropertyType=flats&pageNumber=2&fromSummary=true&backToListURL=%2Fproperty-to-rent%2Ffind.html%3FlocationIdentifier%3DOUTCODE%255E1010%26sortByPriceDescending%3Dfalse%26minBedrooms%3D1%26displayPropertyType%3Dflats%26oldDisplayPropertyType%3Dflats%26index%3D10

Wimborne, Dorset 2 bed house 172k

http://www.rightmove.co.uk/property-for-sale/property-26967287.html?sortByPriceDescending=false&pageNumber=3&fromSummary=true&backToListURL=%2Fproperty-for-sale%2FWimborne.html%3FsortByPriceDescending%3Dfalse%26index%3D20

Typical rent £700pcm (4.9%)

http://www.rightmove.co.uk/property-to-rent/property-26933306.html?locationIdentifier=OUTCODE%5E195&sortByPriceDescending=false&minBedrooms=2&displayPropertyType=houses&oldDisplayPropertyType=houses&pageNumber=1&fromSummary=true&backToListURL=%2Fproperty-to-rent%2Ffind.html%3FsearchType%3DRENT%26locationIdentifier%3DOUTCODE%255E195%26radius%3D0.0%26displayPropertyType%3Dhouses%26minBedrooms%3D2%26maxBedrooms%3D%26minPrice%3D%26maxPrice%3D%26maxDaysSinceAdded%3D%26retirement%3D%26sortByPriceDescending%3Dfalse%26_includeLetAgreed%3Don%26primaryDisplayPropertyType%3D%26secondaryDisplayPropertyType%3D%26oldDisplayPropertyType%3D%26oldPrimaryDisplayPropertyType%3D%26oldSecondaryDisplayPropertyType%3D%26letType%3D%26letFurnishType%3D%26houseFlatShare%3Dfalse%26x%3D68%26y%3D9

mewbie_2

Entertainer wrote: »

Camberley, Surrey 1 bed 155k

http://www.rightmove.co.uk/property-for-sale/property-20109532.html?sortByPriceDescending=false&minPrice=125000&pageNumber=2&fromSummary=true&backToListURL=%2Fproperty-for-sale%2FCamberley.html%3FsortByPriceDescending%3Dfalse%26minPrice%3D125000%26index%3D10

Typical rent 650 pcm (5.0%)

I just picked one to delve into.

Let's assume we have 155k sitting in a 0% interest account. Might get a bit knocked off for cash, but there's fees on top so call it 155k. You are assuming 12 months rent with no voids to get the 5% figure. Also to make the 5% we are managing it ourselves, and it costs nothing at all - year after year to look after the property or the needs of the tenants.

My bearish view would be knock 15% off for management fees, assume 10 months a year let out only (nice to have no voids but need to allow for it), and at least a grand a year for maintenance. Plus I guess some sort of fee for insurance?

As it happens I don't have 155k cash. But I know - let's borrow the money. Now if we borrow the money then mod: OK Mewbie - we got the message back on your fifteenth post

dopester

IveSeenTheLight wrote: »

dopester, don't decend into straw clutching as per your new signature.

If you read mitchaa's thread, he clearly does not believe prices will drop in Aberdeen but your snipet he refers to him being dragged down by the doom and gloom merchants on here.

We shall see. You could be right. Also, he has pressures such as from his wife perhaps wanting to buy soonest, and possible risks of being in cash for 12 months+ (if another round of bank pressures) which he could lose his bottle over.

Mitchaa does seem to genuinely consider the possibility of value readjustment exists though, for Aberdeen.

Remember ISTL, I've already proven myself to him in another closely associated round when he seemed to fully expect his pay-rises to be locked in for something like 5 years... whereas it has actually come to pass as I suggested it would; old agreement broken, pay-freezes (happened) and pay-cuts (it apparently is under consideration).

chucknorris

nearlynew wrote: »

BTL landlords didn't give a stuff about yields 3 years ago.
Most of them didn't even know what it meant, let alone how to calculate it.

It was all based on capital appreciation.
It's only since the assumed, automatic HPI has been removed that they start mentioning yields in an attempt to justify their purchase.

I'm not necessarily having a go at anyone on here, but generally, that is the case.

When identifying potential properties my crieria was and always has been since 1991 when I bought my first investment property:

1. No single bedrooms (ie no bedrooms less than 100 sq ft)
2. The yield!
3. Within the target area

If the property did not satisfy all 3 items I wouldn't even call the estate agent.

The yield you arereferring to is only the rough guide to identify potential properties before arranging a viewing it would have to stack up on my spreadsheet analysis which considers:

1. rental income
2. Mortgage payments
3. Possible voids
4. Maintenance costs
5. Insurance/service charges
6. Misc overheads
7. Tax
8. Cash invested (deposit, fees furniture improvemments etc. for calculating the real yield i.e. the return on your capital invested this is the meningful figure that decides if an investment is a good one or not
9. All of the above over the folowing 10 years with assumptions on interest rates rental and maintenance inflation.

The yield you are referring to does not really tell you much, property is a long term investment with not much return in the early years, you need to know what it will look like in 10 years time.

IveSeenTheLight

Entertainer wrote: »

What is it about uberbulls and Aberdeen on this site. All we need now is for JulieQ to announce that she lives there as well.:T

I don't really have the time to waste proving that black is black as opposed to white and arguing with someone who is determined to believe otherwise but...

Listen, I don't not claim that every property is cheaper to buy or that every property is a worthwhile BTL investment, only that there are properties that are worthwhile.

I did say

To be fair, I do not say every property is cheaper.
This is just one current example of a 2 bed flat that suitably shows the point for buying for owner occupier or BTL purposes.

Other types of properties may not be so great.

My point is always, there are oppertunities out there if you look for them and are ready to move.

What is it with the "uberbears" that everything is either black or white and they cannot see that there are shades of gray as well :rolleyes:

IveSeenTheLight

mewbie wrote: »

Soudns too good to be true. 8% yields. Compared to the boom years where the novices were buying on yields of 0 or 1%. So why hasn't anyone bought these properties? Snapped them up? Maybe you need to improve your touting skills.

But here really isn't the place. There's only a few people, if you discount aliases.

LOL I don't tout, My advice has always been to do the market research for the local area and property you are interested in and not get caught up in the UK average stats.

It's the people with Vested Interest that prices drop that clutch at straws advising not to buy or screaming that there are to be 30%, 40%, 50%, 60%, 70% drops. One guy even believed there will be further 65% drops :rotfl:

tek-monkey

Agreed, those screaming that prices are about to tumble are usually the ones desperate to buy but unwilling to pay current prices. I assume they are hoping they can engineer a fall by telling people it will happen, but very few back up their 'knowledge' with actual facts.

Its all guesswork, nobody really knows.