Rents rising again....

RenovationMan

Percy1983 wrote: »

There is an interesting point here, if you are too cheap corporations can actually see it as a lower quality product.

Anyway, If I charge a family more they either don't have it or little jimmy doesn't get anything for his birthday.

If I charge a corporation more the sharholders get 0.00001% less that year (figure may not be accurate), as mentioned the higher profit can then be given back to the local families through further reductions in price or competitions etc. More Robinhood than greed

So in other words, you're charging according to your client's ability to pay rather than having a fixed price that covers your costs and time. Price it too high and you might restrict your cusomer base, price it too low and you're underselling your time and effort and run the risk of losing money on the venture.

How is this any difference between a BTL landlord pricing his accomodation on the ability of his tenants to pay? If the rent is too high then the landlord may lose customer base, if he prices it too low then he's underselling his time and effort and running the risk of losing money on the venture.

IveSeenTheLight

Percy1983 wrote: »

But in securing your families future you are jepodising other families futures.

The problem is every BTL bought does equal one less for sale, every one less for sale equals more demand for remaining stock, more demand for remaining stock pushes prices up, prices going up prices more people out, more people priced out equals more people needing to rent, more people needing to rent pushes rents up, rents going up makes BTL more attractive, BTL being more attractive causes more people to buy for BTL... and so the cycle continues.

Surely you can see the problem and can see why the loop needs to stop, fair enough if you have a vested interest and you don't want it to stop, but surely you can see the damage.

What is the root cause?

It's not BTL as I've stated before, it only partially replaced the social housing sell off.

The root cause is that there are insufficient house building over a number of years to support the population increase.

I note that the Nett Migration figures showed another increase of 250,000 population.

There will always be a demand for rental property, in Europe it's higher than the UK.

Your desire for greater opportunities for would be homeowners means you shoulld be targetting increase supply rather than BTL taking the social housing gap.

On a personnel level, why shouldn't I be able to secure property for my children now as opposed to inflated prices in 20+ years time?
With housebuilding and population statistics as they are, it'sprudent to secure property now as opposed to the future.

Percy1983

RenovationMan wrote: »

So in other words, you're charging according to your client's ability to pay rather than having a fixed price that covers your costs and time. Price it too high and you might restrict your cusomer base, price it too low and you're underselling your time and effort and run the risk of losing money on the venture.

How is this any difference between a BTL landlord pricing his accomodation on the ability of his tenants to pay? If the rent is too high then the landlord may lose customer base, if he prices it too low then he's underselling his time and effort and running the risk of losing money on the venture.

The big difference is my product is completely optional, housing is not. I don't any anybody over a barrel.

IveSeenTheLight wrote: »

What is the root cause?

It's not BTL as I've stated before, it only partially replaced the social housing sell off.

The root cause is that there are insufficient house building over a number of years to support the population increase.

I note that the Nett Migration figures showed another increase of 250,000 population.

There will always be a demand for rental property, in Europe it's higher than the UK.

Your desire for greater opportunities for would be homeowners means you shoulld be targetting increase supply rather than BTL taking the social housing gap.

On a personnel level, why shouldn't I be able to secure property for my children now as opposed to inflated prices in 20+ years time?
With housebuilding and population statistics as they are, it'sprudent to secure property now as opposed to the future.

I agree, its not the root cause more a symptom of a larger problem, but that doesn't make it right to exploit a bad situation and make it worse.

chucky

Percy1983 wrote: »

The big difference is my product is completely optional, housing is not. I don't any anybody over a barrel.

You mean it's optional that they can use one of your competitors who are miles away and not you if the spec, price or location of your business doesn't suit.

You realise there isn't just one property to rent - they come in different sizes, different prices different specs and different locations. You knew this right?

The_J

You shouldn't have to justify yourself. Would you have to justify yourself if you were buying any other asset? A car? A painting? A case of fine wine?

Let's use the latter example a red Bordeaux vintage from 1990, like land, they aren't making it anymore. If you buy a case, and store it in your cellar, no-one can drink it. It may increase in value (1990 was a great vintage) or it may not (new vintages come along, old ones get lost, it could get damaged). Should you have to justify that purchase?

People bring the emotion of home ownership into this far too easily. It is not a right.

Percy1983

chucky wrote: »

You mean it's optional that they can use one of your competitors who are miles away and not you if the spec, price or location of your business doesn't suit.

You realise there isn't just one property to rent - they come in different sizes, different prices different specs and different locations. You knew this right?

Maybe you missed my point.

Yes there is many properties to rent, but people still need to rent one of them.

Where as they could use me to film something or the competition or just not both getting it filmed, of even have a go themselves.

ess0two

Hey Percy,do you do any filming of the adult nature:D

chucky

Percy1983 wrote: »

Maybe you missed my point.

Yes there is many properties to rent, but people still need to rent one of them.

Where as they could use me to film something or the competition or just not both getting it filmed, of even have a go themselves.

I understood your point.

The price of rent is affected by effective demand just like your product. If more people were able to buy property, rents would drop. You know the rest...

Percy1983

ess0two wrote: »

Hey Percy,do you do any filming of the adult nature:D

I suppose I could, not been asked to do any work of that nature yet. :rotfl:

RenovationMan

Percy1983 wrote: »

The big difference is my product is completely optional, housing is not. I don't any anybody over a barrel.

Who you rent off and where you rent is optional, so my point about pricing still stands. The landlord sets his rental prices according to his client's ability to pay.

If a landlord has accomodation in a desirable/wealthy area then he can ask a higher rent than accomodation he may have in an undesirable/poor area. A certain element of his pricing will obviously be down to his own costs - a property in a desirable area will cost him more than one in an undesirable one, but he will also factor in his client's ability to pay.

If a landlord charges higher rent than his peers, then his customer base can make the choice to rent with the landlord's peers or to rent in a less expensive, less desirable area.

I don't see how the business model is any different from yours or any other business venture.