Happened to stumble upon this....

shortchanged_2

julieq wrote: »

Shortchanged, it doesn't mean what you think it means. You're just too thick to understand that.

92% chance of a profit in 3 months, 7% yield over a year. Good business.

But the figures are worse than they were.

How do I put this simply for you julieq, more BTLer's are reporting a loss than previously.

That is not a good thing for BTL'ers.

But then again I'm sure you can put a positive spin on this julieq.

julieq

These are not buy to let landlords, they are professional investors with over 20 properties. And there aren't that many of those. The sample size is only 550, and so you get noise effects both on the numbers of portfolio landlords that are found to be in the sample, and on the number that experience a loss. These can combine to cause quite large fluctuations.

Unless you can actually see the figures - which the article and the source press release carefully avoid showing - you can't draw conclusions from the increase. What you can see is that this sector proportionately generates more yield than the general market, which all other things being equal means that they are less leveraged.

Also note that the number seeing a quarterly loss has increased since 2006 when rents were lower and rates were higher. There's no logic at all to support the idea there can be a systematic decrease in profitability. If there is a significant increase in losses over a 3 month period when noise is removed, then there are probably some other effects such as arrears due to unemployment, but even so it's still a great business to be in on those numbers.

I'm afraid you're letting what you believe cloud the way you're approaching the numbers. 3 months is too short to measure profit and loss, the significant number here is the yield, which is brilliant for the portfolio investors.

shortchanged_2

Fair play julieq you're wasted on this forum. Shouldn't you be out selling snow to the Eskimo's or something.

julieq

Well shortchanged, if you're too thick to understand that 7% is an excellent return on £3M or so of capital for a portfolio investor, you're probably gullible enough to buy pretty much anything.

shortchanged_2

julieq wrote: »

Well shortchanged, if you're too thick to understand that 7% is an excellent return on £3M or so of capital for a portfolio investor, you're probably gullible enough to buy pretty much anything.

But surely not all of them are getting this 7% return. Hence why more are losing money.

nearlynew

Doin't forget that the majority of BTLers (particularly more recent entrants) haven't got a pot to p155 in.

And they tend to forget that the "deposit" they put down to buy a house is a remortgage and is a loan in itself.

shortchanged_2

nearlynew wrote: »

Doin't forget that the majority of BTLers (particularly more recent entrants) haven't got a pot to p155 in.

And they tend to forget that the "deposit" they put down to buy a house is a remortgage and is a loan in itself.

I'm sure julieq will be along soon to put you straight nearlynew.

julieq

Oh !!!!!! shortchanged. IT IS AN AVERAGE return over the entire sector of portfolio landlords with more than 20%. Some will make more, some will make less, but on balance this is a thriving sector.

Over a year you make 7% on average. Over the last a three month period, a you have a small percentage chance of reporting a loss. You can lose money on a quarter and make money over a year, and that's essentially what the numbers are saying here.

julieq

You really couldn't invent financial illiteracy at this level.

Someone with 20+ properties has invested somewhere north of £3M and is getting 7% on it just in terms of rental income. Some of that might be borrowed at 4%ish. That is still a stonking investment. Even with full leverage that is circa £100K a year cleared.

You're so desperate to believe that the BTL sector is in trouble that you just turn your brains off when examining the numbers. This report says it's a good business to be in.

shortchanged_2

julieq wrote: »

Oh !!!!!! shortchanged. IT IS AN AVERAGE return over the entire sector of portfolio landlords with more than 20%. Some will make more, some will make less, but on balance this is a thriving sector.

Over a year you make 7% on average. Over the last a three month period, a you have a small percentage chance of reporting a loss. You can lose money on a quarter and make money over a year, and that's essentially what the numbers are saying here.

Thanks for explaining that julieq.