From a tenant/landlord point of view this is one of the biggest, if not THE biggest problem in the rental market - landlords who do not have a clue what they are doing, do it on the side, have little or no concept of their obligations under law and believe they have rights which exist only in their imaginations.Loki said:Who said these people were proffessional property investors, in fact how many property investors are there? Most do it as a side subject.
I would venture to say that the vast majority of investors are interested in its revenue generating properties, not its utility, after all, they don't exploit its utility functions.Loki said: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.
Finally, from the point of view of guesstimating where Irish property prices are going to go, I would hazard a guess that rental yields based on historical purchase prices are pretty irrelevant to anyone considering buying today. Yield calculations based on current market value (assuming market value and purchase price are roughly equivalent, although that's not always a given) are somewhat more relevant to the pleb with the moolah who's coughing up for the investment property, fulltime professional landlord or investor on the side. In other words, your rental yield doesn't matter to future movements of property prices.Loki said: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.
You two guys don't know what yield means.
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Loki said: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
Duplex said:If anyone likes graphs here's a bunch on the UK property market. It would be nice to have this type of data on the Irish market.
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Duplex said:If anyone likes graphs here's a bunch on the UK property market. It would be nice to have this type of data on the Irish market.
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walk2dewater said:Why would I sink €300,000 of my wealth into an asset and get out €8,000/year net?
Interesting perspective and one that's shared by many property investors who've discovered leverage for the first time. It's wrong though - the bank is essentially renting you a sum which they will have secured on an asset. As long as the asset you are investing the sum in increases in value at a rate higher than the rent you pay on the sum borrowed, you're in the money. If the market turns you get to find out that you do actually owe 300k and the bank will want it back.Nermal said:The point is that in many cases it's not you sinking the €300,000, it's the bank. When you can get a bank to lend you multiples of your income at 3% to invest in 'base metals, oil, natgas, and canadian dollar bonds', then that'll be a fair comparison.
hmmm said:Interesting perspective and one that's shared by many property investors who've discovered leverage for the first time. It's wrong though - the bank is essentially renting you a sum which they will have secured on an asset. As long as the asset you are investing the sum in increases in value at a rate higher than the rent you pay on the sum borrowed, you're in the money. If the market turns you get to find out that you do actually owe 300k and the bank will want it back.
bearishbull said:[FONT=Arial, Verdana, Arial]from todays indo.[/FONT]
[FONT=Arial, Verdana, Arial]Flatley eyes 5pc stake in BoI but warns of bubble[/FONT]
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Ailish
O'Hora
BOSTON-based billionaire Tom Flatley is considering the purchase of up to 5pc in Bank of Ireland, Ireland's second biggest bank, industry sources said yesterday.
Mr Flatley, who is worth $1.3bn, confirmed to the Irish Independent that he is looking at "taking a position" in an Irish company but would not comment directly on buying into Bank of Ireland.
Investment advisers to Mr Flatley were in Dublin last week to look at the potential of him taking a position in Bank of Ireland.
Since divesting of much of his massive property portfolio in the US in recent years, the Co Mayo-born tycoon is believed to have a substantial cash war chest in search of a solid Irish investment.
A 5pc stake in Bank of Ireland at current prices would cost just under €750m, based on yesterday's closing price of €15.41 per share.
Mr Flatley said that Bank of Ireland is "a terrific bank and will be a player in the future".
It is understood that he would take a stake in Bank of Ireland as an investment rather than a controlling position and could buy up to 5pc of the Bank's shares.
Mr Flatley, who left Kiltimagh in Co Mayo when he was 18 and made his fortune mainly in the construction/real estate sectors in the US, said: "Why wouldn't I want to invest in an Irish company? I should have done it way back but I didn't have the time."
In a wide ranging interview due to be published in this newspaper on Thursday, Mr Flatley ruled out investing in property in Ireland at current prices. In a stark warning from a billionaire property mogul, Mr Flatley said it was "too expensive" and warned that a "correction" in the Dublin housing market is on the cards.
"When the correction comes, it will hit hard," he said. "I read the Irish papers from time to time and am shocked at the prices in Dublin."
He added that during his development years he went through four down times, and when it comes to property "no tree grows to the sky".
"I've watched the corrections in the past take place every ten or 12 years, and we've now gone 16 years in the US," he said.
He added that he is thrilled with the performance of the Irish economy but he would be happier if things slowed down.
"I really do worry about the Dublin property market and I believe it is more vulnerable than any market I know."
According to Mr Flatley, areas in the US like California, Massachusetts and the east and west coasts where prices have accelerated the most are on a par with increases in the likes of Galway, but the Dublin market is in a league of its own.
He added that one of the problems in Ireland is that interest rates are now dictated by Europe.
"You have a bit of a problem here because your Alan Greenspan (the former chairman of the Federal Reserve) is in Brussels and you are now part of the European Union.
"It's just a matter of when the correction will be.
"Three years ago I would have said it was coming next year."
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Nermal said:where am I wrong? i just stated that the only way most people get leverage is on property.
walk2dewater stated that he had 300K invested in commodities and that it had outperformed the same amount invested in property over the past few years. fair enough, but with 300K in deposit & interest payments i could have a lot more exposure to property than he had to commodities. and a lot more gains to show for it.
Massachusetts home prices fall
The number of homes sold in Massachusetts dropped a whopping 21 percent in January compared with a year ago, the largest year-to-year decrease in monthly home sales in a decade. As a result, home values have begun to soften. Statewide, they actually fell slightly in January compared with a year ago.
Such pressures are forcing a rising number of homeowners to erase their debts by forfeiting their homes. Foreclosure filings in the county that includes Boston nearly doubled in January from a year ago, ForeclosuresMass. says.
Homeowners "call us and are heartbroken," says Robert Pulster, executive director of the Ecumenical Social Action Committee, which works with Boston residents on the brink of losing their homes. "They thought it was their dream."
Neffa said:Huge contradiction here - he believes in the long-term story of the BoI but is bearish on property. Yet the bank is hugely exposed to the property bubble here so effectively by buying into the bank he is buying into the property market - doesn't make sense to me.
Duplex said:Much of the mortgage risk is repackaged by the banks and sold on the money markets as mortgage backed securities. Still a slight contradiction depends when and at what price he buys I guess.
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