May Nationwide MoM +0.3% YoY -1.2%

debtistheft

chewmylegoff wrote: »

why not? surely as long as you're making a profit on the BTL, it doesn't matter what rent you might be paying and what rate you're charging rent at.

before: rent payable = 10. net position = -10

after: rent payable = 10; profit on BTL = 5. net position = -10 + 5 = -5

The risk would outweigh the return.

shortchanged_2

OK debtistheft lets look at this.

Your profile was created on the 19/05/2011, funnily enough the same day that RenovationMan made his last post. A little suspicious, unless RenovationMan is on a round the world trip with all the money he is saving from the low interest rates.

debtistheft

shortchanged wrote: »

OK debtistheft lets look at this.

Your profile was created on the 19/05/2011, funnily enough the same day that RenovationMan made his last post. A little suspicious, unless RenovationMan is on a round the world trip with all the money he is saving from the low interest rates.

I know. I am Rennovationman. I am pretending to be your sockpuppet in order to discredit you.

Kohoutek

debtistheft wrote: »

As I said in my earlier response, I would not exclude any investment where the return outweighed the risk.

Return and risk can't be precisely quantified with any investment...

debtistheft wrote: »

Other scenarios could be that you save up £100k. You can either 'invest' that in a home for yourself or you could use it as a deposit for 3 other properties. You rent those properties out and the tenants pay them off over a period of 25 years. As long as the return on the initial £100k investment was worth the risk of investing in these properties then the investment was sound.

So being such a risk averse guy, if you had £100k, you would rather buy three properties to let (for the sake of argument worth £300k each) than one to live in?

If you buy three properties, you have £900k worth of exposure to property prices and £100k of equity. If you buy one, you have £300k worth of exposure and 100k of equity. Can you see why most people choose the latter?

chewmylegoff

debtistheft wrote: »

The risk would outweigh the return.

on that basis you wouldn't make any investment which didn't pay a higher return than your rent, because the risk wouldn't be worth it.

savings account? what's the return? only £100 interest a month. nah, too risky.

ponzi scheme - 20% return a month. that's more than my rent. the risk is worth it!! invest in ponzi scheme!

debtistheft

Kohoutek wrote: »

Return and risk can't be precisely quantified with any investment...



So being such a risk averse guy, if you had £100k, you would rather buy three properties to let (for the sake of argument worth £300k each) than one to live in?

If you buy three properties, you have £900k worth of exposure to property prices and £100k of equity. If you buy one, you have £300k worth of exposure and 100k of equity. Can you see why most people choose the latter?

Actually I would not borrow money to fund any investment. I can't understand why you guys do it so readily. £200k exposure and £100k equity on a single investment? The mind boggles!

Kohoutek

debtistheft wrote: »

Actually I would not borrow money to fund any investment.

What do you mean by this then?

debtistheft wrote: »

Other scenarios could be that you save up £100k. You can either 'invest' that in a home for yourself or you could use it as a deposit for 3 other properties. You rent those properties out and the tenants pay them off over a period of 25 years. As long as the return on the initial £100k investment was worth the risk of investing in these properties then the investment was sound.

shortchanged_2

debtistheft wrote: »

I know. I am Rennovationman. I am pretending to be your sockpuppet in order to discredit you.

Well the jokes over now so why don't you go back to being RenovationMan or whoever you usually are.

debtistheft

shortchanged wrote: »

Well the jokes over now so why don't you go back to being RenovationMan or whoever you usually are.

You're right. I will.

IveSeenTheLight

Pimperne1 wrote: »

Originally Posted by geneer
Hmmmmm.

Yet again Lite appears to be relying on the wriggly bullish fallback definition of "stagnation".

"stagnation" is houseprices keeping up with inflation.
Significant real falls is better know as "a crash".

See 90's "Crash" for corroboration.

Its only anything other than stagflation for those who have the same amount as a house costs in the equivalent of a bank earning inflation rate or above. For others its still the same price as it was last year with no additional income.

Hmmm.
Stagnation is http://dictionary.cambridge.org/dictionary/british/stagnate?q=stagnation

Definition

to stay the same and not grow or develop The electronics industry is showing signs of stagnating after 15 years of tremendous growth.

Stagflation is http://dictionary.cambridge.org/dictionary/british/stagflation?q=stagflation

Definition

an economic condition in which rising prices, high unemployment and little or no economic growth are present


(Definition of stagflation noun from the Cambridge Advanced Learner's Dictionary)

In terms of house prices (which is what we are discussing) would that mean that poor old geneer believes were stagflating.

I'm quote comfortable with my assessment that in the last couple of years, house prices have stagnated

Indeed, poor old geneer is clinging with desperation to "real term" valuation falls whilst nominally prices aren't changing much.
Rather than compare against general inflation, he should possibly compare against wage inflation.

Nevermind, nothing really to concern me.
My properties equity continue to increase month on month as the debt is paid down, whilst he is helping his LL to do the same