Buying a new house - but want to rent my existing one as an investment..

getmore4less

devils_advocate wrote: »

Sorry but I have to disagree with you. Houses are illiquid enough as an investment at the best of times, and with any investment you have to have an escape route to turn it into cash if necessary.

What many people forget is that whilst house prices have always risen over time, so has inflation. Depending upon which point in the cycles you wish to measure from, you may find that there has been a reduction in house prices in real terms. Certainly, those buying at a peak and selling in a trough will notice it.

People's priorities change, and they are also affected by unforeseen circumstances. You cant ignore capital values, and cash flow does not equal income.

If you are speculating then you don't go buying at the peaks.
Igoing into rental thats a good reason for getting the initial yield right, at the peaks finding 10% yielders will not be easy.

Once yield get much below this you are entering risky property speculation not rental.

The pros offload their worst(low yield, high maintanence) rental stock into a peak when people will buy anything, then have ready cash for the down turn when good stock can be bought cheap.