Your Best Investments?

vectistim

The_Hurricane wrote: »

Hi All,

What has done well for you in the past, how much did you make and what are you looking towards now?

Housing, a considerable way towards what might be enough, housing

The_Hurricane

vectistim wrote: »

Housing, a considerable way towards what might be enough, housing

Even in today's climate?

vectistim

The_Hurricane wrote: »

Even in today's climate?

Yes, housing, even in today's climate. OK, so capital appreciation has been essentially zero for the last few years, but yields have been OK. The low interest environment makes the gearing easier[1] and makes it easier to pay down the mortgages. I've been fairly picky about what I go for but, subject to finding the right thing at the right price, I'm up for another purchase this year.

[1] Certainly, I could have generated a lot more by maxing out my gearing all the time, but I would have found that a little scary with the amount of debt I could have accumulated - if there's a problem currently with one or more properties I should be able to cope for long enough to sort it out. If I was mortgaged to the hilt I would need much larger cash resources lying around to cover emergencies.

sabretoothtigger

The_Hurricane wrote: »

Even in today's climate?

Housing is the countries most subsidised investment. Whatever climate you got to live, got to pay rent if not an owner.

Largest cost in a house is the finance which is now low. Lets say the rates would be 8% if not for HMG cheap money.
Reverse that and add 20% for div tax and you wont get barely any investment that pays out that much every year and not without more risk, so its the best by reducing costs.

If he is paying off, eventually he will have saved this cost/made this money as higher rates are inevitable. I'd say a fixed rate is better but fast pay off could be cheaper/more profitable

The_Hurricane

Proportional to the value of the property, what sort of annual income are you generating? My own is 4.4% which I know is too low but the house is holding it's value.

vectistim

My gross rental yields vary between about 5.25 - 6.25%, but that isn't really a figure I get too hung up on. When considering a purchasing I'll do a sense check of whether I expect the gross yield to be above 6% - that's pretty much my cutoff point at purchase time.

Obviously the mortgage leveraging significantly alters the yield on the invested capital.

Whilst price rises are nice to look at on an assets spreadsheet they're not particularly interesting to me (they make it harder to buy more). My main focus is to ensure the properties pay for themselves, the repayment of the capital, and maybe have a bit left over.

So, over the long term I should have a set of mortgage free assets providing income that rises over time (I assume a reasonable correlation between wages and rents)

The_Hurricane

vectistim wrote: »

My gross rental yields vary between about 5.25 - 6.25%, but that isn't really a figure I get too hung up on. When considering a purchasing I'll do a sense check of whether I expect the gross yield to be above 6% - that's pretty much my cutoff point at purchase time.

Obviously the mortgage leveraging significantly alters the yield on the invested capital.

Whilst price rises are nice to look at on an assets spreadsheet they're not particularly interesting to me (they make it harder to buy more). My main focus is to ensure the properties pay for themselves, the repayment of the capital, and maybe have a bit left over.

So, over the long term I should have a set of mortgage free assets providing income that rises over time (I assume a reasonable correlation between wages and rents)

5.25% + is a satisfactory return, my tenants are half way through a six year contract which I am happy about. Whilst the return is only 4.4% the rent takes care of the mortgage and rates. I will then use the rest of the income along with additional funds to invest back into the house via repairs and upgrades.

vectistim

Nathan489 wrote: »

Good ideas are given and i prefer to invest on the precious things and that makes you satisfied all the time, if you have invested for the right and things go right for you.

This is a local shop for local people, they'll be no touching of the precious things of the shop.

planteria

Nick_C wrote: »

Best current investment - 100 shares in Resolution at 213.25 last October. Currently worth 297.3, so a gain close to 40%. Unexpected, as I bought these shares for income - they are yielding 9.9% (based on the price I paid)

Worst current investment, 1500 shares in Avocet Mining, bought at 66p in January and now worth 6.7p :-( But they were bought as a pure gamble..

great with Resolution. 9.9%:T

and i am holding Avocet Mining too...no choice but to hold & see what happens now.:think:

doughnutmachine

vectistim wrote: »

My gross rental yields vary between about 5.25 - 6.25%, but that isn't really a figure I get too hung up on. When considering a purchasing I'll do a sense check of whether I expect the gross yield to be above 6% - that's pretty much my cutoff point at purchase time.

what type of net return do you get? I've looked at buying flats before and i couldn't get the figures to add up.