As the saying goes ... "Everyone is a genius in a bull market ..."
"... so find the bull market."
There will always be opportunities if you purchase the right property, but the problem over the last 10 years is every investment has doubled,tripled, quadroupled so even the clowns that didn't know what they were at cleaned up.
Only the shrewd investor will make money in the next few years.
Re 550 terrace in phibs - Yep, the EA is following on from prices earlier on this year not realising that the sentiment (IMO) has changed.
....
As the saying goes ... "Everyone is a genius in a bull market ..."
one can make money in a plunging market as well...
"... so find the bull market."
Nope - more like €625,232Ie 400k at 1.5% over 30 years will be worth 1m.....
property like that should be razed to the ground.................
Whats the real value of this crappy cubbyhole? €180K would be overvalued imho, maybe €140K , but €510k.. is someone taking the píss?, no seriously!!
In my calcs I am saying that a 1.5% return per year on 400k is all that's needed to get the same return as putting 20k per annum in the bank. This 20k includes the cost of subbing the tenant plus opp costs. Ie 400k at 1.5% over 30 years will be worth 1m.....
In my calcs I am saying that a 1.5% return per year on 400k is all that's needed to get the same return as putting 20k per annum in the bank. This 20k includes the cost of subbing the tenant plus opp costs. Ie 400k at 1.5% over 30 years will be worth 1m.....
Actually, I know it's easy to come back and say what about interest on the 20k etc...but this is what was deemed included. I'm gonna do a costing here for once and for all on the likely subsidising costs, vacancy periods, maint costs, letting fees, mtg repayments and come up with a true cost of a 400k apartment and come back to you (prob be tomo)...totally agree with Jister though...it all depends on what property to buy,..could just as easily buy shares in Baltimore before the bust....
Firefly.
property like that should be razed to the ground.................
Agreed..... there were probably those who invested a few yrs back also who invested in the wrong areas perhaps. I don't believe that investors are just going to stop...... they will just be more selective ie. right property type, right location etc...
IMO there will be a massive wipeout so all investors will from current stand point take a beating. Hence the stock coming out to sell now.
Note average farmers income in 2004 was 15k. Just think how many sites will be sold in the years ahead - not thousands but millions. Land as income equals 250 per annum per acre yet say on average 50,000 as development. That is a PE of 200. Sell.
Re folly of people handing back keys - amend my earlier comments saying this is not an option. It is an option for all the poles etc buying apartments. They have a no risk gamble as they will just go home if it collapses. Hence this is a big risk for the banks - left with property whose owners they cannot chase. If I was polish I would buy as many properties as possible - if it goes up further I will sell, if it drops I hand back keys and head for Lodz.
If Irish and bearish I would keep my cash in a sub of a non irish bank just in case they collapse - ref credit suisse report and new york hedge funds posts. Credit unions a complete no no.
[It is an option for all the poles etc buying apartments. They have a no risk gamble as they will just go home if it collapses. Hence this is a big risk for the banks - left with property whose owners they cannot chase. If I was polish I would buy as many properties as possible - if it goes up further I will sell, if it drops I hand back keys and head for Lodz.
That's an excellent point, Irish banks have no experience of lending to migrant workers. In the US, it's nearly impossible to get even a low limit credit card without extensive history in the country. US banks know from experience that immigrants are more likely to do a runner and fly home when bad debts mount.
I'm sure that many young Irish people 'tricked' into interest only 35 year mortgages faced with debt slavery and a depreciating asset will post their keys through the letterboxes of their bank and do the flit.
But aren't you neglecting the interest on the repayments?
Also, aren't you neglecting the opportunity cost of leaving the 400k in the bank on deposit?
Your calculations are based on breaking even (which requires 1.5% growth) - this is 0% return. What then about inflation that has been eating away at your 400k? So, to compete with Rabobank, you'd need a consistent 5-6% growth over 35 years.
I think investing in property in 2006 is for fools.
Slightly off topic....I think there are a lot of people out there who are thinking "sure we're used to putting 500pm between us into the SSIA..why not keep going with a bit more and subsidize an investment property"...any thoughts.....
Firefly.