I think the most interesting thing is the fact Rory states his views as fact and positively right and going to happen while the article points out things to be weary of. The rport strgely mentions details like"growing number on investors" yet provides no proof or figures. Not saying it isn't like that but an accurate picture of the Irish property market would be nice for all involved. A lot of people point to anicdotal evidnce hints to say they are right.
Future price of Irish properties
- Thread starter bacchus
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Beattie - You're making the fatal assumption that Irish Property Speculators (I know of very few Property *Investors*) act rationally.beattie said:
Most buy-to-let amateur landlords appear to believe that 'yields' are things you encounter only when you're driving.. ;-)
I recently saw that 'show me the money' program for the 1st time with the (for me, kinda unbearable) Eddie Hobbs. There was a couple (in the south west somewhere I think..) who had an "investment" property (which was referred to several times as the retirement nest-egg) which was bringing in €700/mth in rent and the mortgage was €1500/mth.
Sweet.. This post will be deleted if not edited immediately.
And the worst part (altho I admit I only watched the 1st half of the program - couldnt really take any more of either the presenter or the couple) was that Hobbs never brought this up as perhaps not such a prudent financial transaction.. (the couple were struggling with their cashflow). They had some decent equity in the property and could have sold it for an income producing asset but sure that'd be thinking..
While Loki will probably whine about anecdotal evidence, I currently know two amateur speculators (altho of course they think they are 'investors') currently making a loss on their buy-to-let properties - altho neither of them are anywhere near as bad as the above. Throw in the fact that a report quoted earlier in this thread (apologies I cant remember which one/the name..) said only 64% of buy-to-let owners said their rents covered their expenses.. this does not bode well.
Well as we don't actually know what effect the investors are having speculating on the effects of the change in an unknown quantataive effect seems pretty difficult to do.beattie said:
I think people overrate the investors effect and the reason for purcashes. I know a lot of people in the market whom bought years ago for pensions and increased their protfolio as prices rose. It still seems pretty risky thing to do right now but over 10-20 years the massive risks some people estimate disapear. A good buy will make you a return given time.
Its all about the investment horizon Soma; do you honestly think that Irish property investors haven’t literally spend seconds pouring over DCF spread sheets, undertaking highly complex portfolio analysis, and other assorted, ahhh..... do dahs ?
Its long term fractional analysis of yield spreads at the furthest reaches of modern investment appraisal that we are witnessing here matey.
Ya cant beat long term, it both soothes the need to engage the rational faculties and transports the day of reckoning to some unspecified date in the future, powerful stuff.
Its long term fractional analysis of yield spreads at the furthest reaches of modern investment appraisal that we are witnessing here matey.
Ya cant beat long term, it both soothes the need to engage the rational faculties and transports the day of reckoning to some unspecified date in the future, powerful stuff.
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SteelBlue05
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Calina said:
Not true, you can identify most good buys up front. If you even stick to the ol' "location, location, location" principal you'll identify most good buys quite easily.
Completely agree there. Buy a house beside airport land don't be surprised when the airport expands, not hindsight but foresight. Buy a house close to a college and hospital you can rent to students and hospital staff unlikely the college and hospital will close even in the long term.SteelBlue05 said:
That is a gross over-simplification if you are speaking as an investor rather than an owner occupier.SteelBlue05 said:
There is no guarantee that for example houses in the most sought after suburbs such as d4, blackrock, ranelagh etc (which currently have prices in the stratosphere) will still be selling for the same or greater than (inflation-adjusted) amount in 10 years.
All these 'pension nest egg' properties will have to be sold sometime in the future so as to actually realise their currently assumed value. When this happens, in the next 10 - 20 years, the market will be flooded with one and two bedroom apartments that an ageing population will have no interest in.
So if there is a price correction within the next 2 - 4 years it will be the first of several.
So if there is a price correction within the next 2 - 4 years it will be the first of several.
The thing is I know many bigger investors (5+ properties) and on most of their properties they are getting 90% of the rental income on properties by haveing loss making properties. Own 3 properties outright then buy 2 other properties with mortgages and you get intrest relief on all your rental income. You don't even need to rent out the property to be making profit. Even is 64% is right what level of not reaching? 10% orsoma said:
soma said:
Actually I am assuming that over time property increases in value in a 10-20 like I said and thonce you own it the income is all profit. Some of you guys seem to forget as time goes on you own more of the property untill you own it all. So "yield", if you want to look at it that way, can drop but in real terms to the person be increasing. Owning an asset that gives a return is the "yield" some people are looking at. Look at the long term not the short sight of there willl be a crash today or tomorrow.
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SteelBlue05
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soma said:
Well it was only in response to an equally simplified statement.
The guy who said it was as easy as "location, location, location".Loki said:
So I picked some nice locations..SteelBlue05 said:
..in one of which I rent a lovely 3 bed house for a fraction of the purchase cost, and write the rent off as a business expense, investing the money saved.soma said:
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SteelBlue05
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soma said:
No, I didnt make reference to any location that was listed in other posts, mine was a general comment.
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Neffa
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Duplex said:
Brilliant!
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