Do you think property prices will double in 10 years?

Chichi_2

lynzpower wrote:

I can only presume that the OP wanted everyone to know how theyve found a BTL property with an 8% yeild.

I really am not the boasting kind. Sorry if I come across like that. When the property has been let out, then we'll see whether the yield is 8%. We believe that the potential yield will be that based on the location of the property.

Chichi_2

jackieblue wrote:

Chichi,

If you are getting the low mortgage rate and the rental income I'm suggesting I personally wouldn't care whether house prices doubled or not, as your £20,000 deposit is already generating surplus income of £5400 pa, which would be 27% pa if I'm doing all this right.

Your calculations are not quite right as the property price is incorrect as I haven't disclosed the % deposit we're putting down and the mortgage interest rate . For obvious reasons, I don't want to list all my calculations, but we have worked out that a rough surplus of £450 a month is achievable. So yes, the deposit of 18K will generate potential interest of 30% p.a.

F_T_Buyer

mlmoneysaver wrote:

Property prices will definitely double in the next 10 years.

Absolutely guaranteed, 100% certain. No room for doubt.

That's some confidence you have. Are you going for broke?

Dead_Eye_Jones

No one knows where prop prices will go next, there are a range of opinions above but none of them know for sure - fact!

People were saying to me 5 years ago that property prices couldnt rise any further, but they did, luckily I didnt listen to all the people who told me to wait - I bought anyway and havent regretted it for a second - I feel sorry for anyone who really wanted to buy and was persuaded not to.

However I was buying a home and an investment, and tbh the former was my priority, in your case the purchase is purely an investment and one that will always have an element of risk - as most investments do! Personally I would invest in other things that I have a better understanding of, and I also think its perfectly acceptable to aspire to home ownership for reasons other than making money. People seem to forget that last point in todays money orientated society, but for me, a stable home is worth paying for. When youve had landlords force you out of rental accommodation by fair means and foul it changes your outlook...

jackieblue

Chichi wrote:

Your calculations are not quite right as the property price is incorrect as I haven't disclosed the % deposit we're putting down and the mortgage interest rate . For obvious reasons, I don't want to list all my calculations, but we have worked out that a rough surplus of £450 a month is achievable. So yes, the deposit of 18K will generate potential interest of 30% p.a.

The deposit has become 18K, whereas you previously mentioned 20K.

You did quote the % deposit as well as its value, see below :

Chichi wrote:

Her deposit of 20K

Chichi wrote:

She is paying the deposit (15% of purchase price)

You also gave the surplus, and yield so you didn't need to quote the mortgage rate - I can work it out from the info available.

PoorDave

F_T_Buyer wrote:

Tennis_Star wrote:

And what have a few of the big funds been doing recently? Selling.

Reference?

PoorDave

Chichi wrote:

Your calculations are not quite right as the property price is incorrect as I haven't disclosed the % deposit we're putting down and the mortgage interest rate . For obvious reasons, I don't want to list all my calculations, but we have worked out that a rough surplus of £450 a month is achievable. So yes, the deposit of 18K will generate potential interest of 30% p.a.

Am i the only person not to see what your "obvious reasons" are?

PoorDave

F_T_Buyer wrote:

The point you're missing is average yields are not 8%, they are around 5%. The average mortgage rate is much higher at 5.29% which was before the rate rise.

The point you're missing is that the 8% quoted is from what the OP said applies to her case.

5%+ yields are perfectly possible in some areas. Quoting the average doesn't help each potential BTL person, as they should be checking their own figures anyway. The average presumably means that in some cases the yield is barely above zero (bad investment -all agreed?), but correspondingly, some areas will be more (good investment if you're happy it's more than you can get for your cash elsewhere?).

Regardless of whether we have any confidence in the scheme the OP proposes, if the figures are true, and they do work, then would you agree the OP should go for it, since thus it makes a good investment?

monkey_writer

they will in Folkestone

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(fingers crossed)

whambamboo

PoorDave wrote:

The point you're missing is that the 8% quoted is from what the OP said applies to her case.

5%+ yields are perfectly possible in some areas. Quoting the average doesn't help each potential BTL person, as they should be checking their own figures anyway. The average presumably means that in some cases the yield is barely above zero (bad investment -all agreed?), but correspondingly, some areas will be more (good investment if you're happy it's more than you can get for your cash elsewhere?).

It would never be barely above zero. Net profit is often below zero (after interest payments), but even the worst place would pay 3%+. Yield is annual rent / cost of the property.

BTW 5%+ yield is pretty rubbish, unless + means 10%.