None. We're moving from an historically low interest rate environment where any investment worthy of the name should have made significant profits. In a high(er) rate environment there may not be any investments that show such growth potential. In such an environment wealth maintenance is the aim of the game.
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None. We're moving from an historically low interest rate environment where any investment worthy of the name should have made significant profits. In a high(er) rate environment there may not be any investments that show such growth potential. In such an environment wealth maintenance is the aim of the game.
S
SteveyWonder
Guest
There's no prizes for spotting historical trends my friend. And I have done extremely well out of what has gone on in Ireland over the last 10 years.
The point is though (and I have been making this point since I joined up this askaboutmoney), I was referring to another poster, carlb, who caught my eye - he bought in 2006. Are you suggesting that he should not be worried, just use history as a basis for predictions in to the future?
A business selling property to paddies in Bulgaria or any other God forsaken bubble market you care to mention?
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StoppedClock
Guest
Casinos, i heard of this one guy who literally doubled his money in about 3 minutes, he then did it again, and again, all in under 10 minutes. Therefore since casions now only ever pay out (new paradigm) he can expect this return for ever. Pity the poor losers who wasted their time on property.
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walk2dewater
Guest
SW, it's called the "100-smokes-a-day-hasn't-killed-me-yet-so-it-never-will" school of philosophy
Good point for sure... for proper wealth maintenance one needs enterprising opportunities to stay ahead of the game
Good for you & I mean that.. I just find that there are posters here who 'deplore how investors/speculators' have reaped from it.
It depends on what he bought & where he bought in my view. I never regarded apartments as good long term...so if he bought one then yeah... his yields may be soemthing to watch
Not everyone who got into property loses...co you can't paint everyone with the same brush
..must remember that oneSW, it's called the "100-smokes-a-day-hasn't-killed-me-yet-so-it-never-will" school of philosophy
3% over what period
If I buy a house tomorrow and rent it I will make about 3% per year.
See my earlier post about buying an apartment for 400K
BTW, my house has appreicated abut 300% over the last 8 years and in time I will probably inherit property worth about 500K, so its not really benificial for me to see the market crash.
on the 400k house. If the subsidizing costs and opportunity costs are to be 20k py (seems a bit high to be but nevertheless) the property would need to increase by 3.75% annually over the next 20 years to break even. Over 30 years the annual growth would only need to be 1.5% which seems low to me.....(still bearish short term, but long term still think it's the best investment for the money)
OK rental yield as opposed to capital growth yield is what you are referring to right?
I am assuming house prices stand still. Lets say the next 5 year period, as interest rates rise, capital appreciation gets cut back, and in my opinion might depreciate.
It is big picture time. With Irish property the Math does not add up. There will of course be major winners and there will be major loosers.
The next few months will tell a tale as the impact of increasing interest rates, and higher energy costs eat into consumer confidence.
Ireland is vulnerable to a number of international shocks. Today the President of Venezuela has said that they will stop oil production if the US attacks Iran. Oil at over $100 a barrel would be arrow into the heart of consumer confidence.
The next few months will tell a tale as the impact of increasing interest rates, and higher energy costs eat into consumer confidence.
Ireland is vulnerable to a number of international shocks. Today the President of Venezuela has said that they will stop oil production if the US attacks Iran. Oil at over $100 a barrel would be arrow into the heart of consumer confidence.
CelloPoint
Registered User
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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.
Not in agreement 100%. 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.
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.
Firefly.
CelloPoint
Registered User
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- 75
If you could do that Firefly, it would be most appreciated. We can whet our lips even more prior to the impending crash.
Personally i reckon only the shrewd investor will avoid losing a lot of money in the next few years.
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...
ninsaga
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