soma said:The problem ivuernis is that I cant even begin to talk logically about things like this to the parties involved - they just roll their eyes - they've heard all the 'doom and gloom' (as they would say) for years.
Most of the 1.3m will be an interest only loan secured against existing investment properties. Talk about a house of cards..
As long as they're not looking for stock market tips then we're grandonekeano said:Soma - they are shoe shine boys these friends are they?
Roy
ivuernis said:They are building in Dubai like there is no tomorrow...
http://forum.skyscraperpage.com/showthread.php?t=101057
The rapid scale of construction is unbelievable, probably only matched in a few of the largest Chinese cities.
Who Started listening to real estate agents and believed them? A property supplement is effectively property porn written by the advertisers. Show me any property ad and I can pick on most points and rip it to shreds.gearoidmm said:The point is that it wasn't a property sceptic who made up this example but in fact it was the property supplement of the Irish Times and they were trying to sell it as a good idea!
Many FTI bough their home a while ago. This means they have equity they can borrow on if they buy another and rent it out with a differential and pay the difference their mortgage can easily be less than somebody who bought a year or 2 later. It appears that people do it for this reason in part, basically it is possible.Calina said:Can you provide back up for this statement? Why is it so much cheaper for FTIs than for other people?
Neffa said:I don't think it is only true for exclusive property - it looks to me (from examples I've already posted) that it applies to the family home market too - the €1m market is hardly exclusive in Ireland anymore but it buys you more in most areas of London. It is just another pointer to me that it is unlikely that the market has a lot of growth left in it, particularly when interest rates are rising.
redo said:A bit simplistic there Duplex.
Duplex said:Explain.
redo said:I can only think that equating the location of an bank, to the location of property was an off the cuff comparison. Of course, one would not decide to invest money in a bank based solely on its location, or even purely on the interest rate they offer. There are many factors involved. Minimum term, mimimum amount required etc. However a lot of people are keen to invest money in the Isle of Mann and Jersey. These are location based investments.
I believe the property game is all about location. If you want to disagree, fine.
Duplex said:Location, location, location is not, repeat not, what property (investment) is about. Property investment is about maximising the return on capital employed, i.e. it’s about yield. Location is a function of value but the main determinant is return (yield).
Would you place your money in one bank in preference to another, because of its location?, or would you base your choice of bank on the interest that they’ll pay on your capital?
Duplex said:You find an ‘investment’ property anywhere in Ireland and I’ll provide a comparable property that offers a better yield, i.e. earns more money, and comfortably pays for its self.
walk2dewater said:Yield is net income divided by current market value, usually expressed on an annual basis. E.g. a bond with a market value of €1000 that pays the owner €100 in annual dividends has a 10% yield.
walk2dewater said:And of course, it seems just about every property investor in Dublin believes the primacy of location (appreciation) over yield (rent). They believe the ability to sell the asset on for a higher price in the future is the prime reason for owning it, hence the often remarked "yield doesnt matter" and all that matters is "location, location, location".
Fools and their borrowed money...
That is a funny way to work out rent yield. Current market value doesn't effect my rent yield! If that is what you think rent yield should be worked out on investros you would have me losing money when I am not.That is Vodoo economicswalk2dewater said:Yield is net income divided by current market value, usually expressed on an annual basis. E.g. a bond with a market value of €1000 that pays the owner €100 in annual dividends has a 10% yield.
Duplex said:As far as yield is concerned.
Yield is calculated by employing the current passing rent and the current open market value, how else could you make an analysis of the performance of the original investment and any subsequent capital growth.
Loki said:Current market value doesn't effect my rent yield!
Howitzer said:Duplex said:As far as yield is concerned.
Yield is calculated by employing the current passing rent and the current open market value, how else could you make an analysis of the performance of the original investment and any subsequent capital growth.Yield is the current rent divided by the price you BOUGHT at. For someone, like Loki I'm sure, who bought ages ago their yeild's will still be very high.
Valid point. To be specific, I'm talking CURRENT yield then; current rent/current market value. This is the standard definition.
But none of this hair splitting matters, Dublin property barrons live in their own economic universes.
I never said they were intangable you did. These are tangable values the same way location from the city centre is.Duplex said:More voodoo economics coming at ya Loki.
You suggest that many investors are happy to forego yield in return for intangible benefits, relating to specific locations ( I could argue that there is no such thing as intangible value).
Who said these people were proffessional property investors, in fact how many professional property investors are there? Most do it as a side subject.Duplex said:A professional property investor will seek a sound building with a secure legal title, occupied by a tenant who offers a good covenant, where the passing rent is close to open market rent or where the possibility of a review is in the offing and where prospects of further rental growth are good.
You see the problem there is you can use it to make analysis of the over all market but forget that property is not purely an asset it has a use in itself. You also ignore the reality of financial situations live in. You can't give your kids some shares and say live in that.Duplex said:As far as yield is concerned.
Yield is calculated by employing the current passing rent and the current open market value, how else could you make an analysis of the performance of the original investment and any subsequent capital growth.
No that is current MARKET rent yields. My rent yield is by what I am paying and what I am recieving. Not great on definitions. If you are using rent yields in your way as I said you would be saying many investors are not getting a return from their property which is simply not true. I think you guys are mixing up economic theory and book keeping and getting a very warped view of the world.walk2dewater said:I'm talking CURRENT yield then; current rent/current market value. This is the standard definition.
Loki said:I never said they were intangable you did. These are tangable values the same way location from the city centre is.
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