Closing on an investment property 16.04.2013

MMAGirl

I think its worth a punt at this point.
Im closing on an investment property tomorrow.
Numbers are good.
Basically I put up 25k deposit and then the mortgage is going to cost me no more than a days wages per month and at the moment the rental income will be twice what the mortgage is.

Thats workable and I think i'll be doing it again soon.
Brother in law already has two apartments in the same place.

Galego

MMAGirl wrote: »

I think its worth a punt at this point.
Im closing on an investment property tomorrow.
Numbers are good.
Basically I put up 25k deposit and then the mortgage is going to cost me no more than a days wages per month and at the moment the rental income will be twice what the mortgage is.

Thats workable and I think i'll be doing it again soon.
Brother in law already has two apartments in the same place.

What is the yield in that property?

MMAGirl

Galego wrote: »

What is the yield in that property?

Small bit north of 10%.

There's a great thread called Darren's property portfolio. I did loads of research all over the place but that thread is one of the most useful. He doesn't update it anymore which is a pity.

To simplify it more though. I out up 25k to cover deposit, solicitor etc. I should have no more to put up that doesn't come from the rent. After taxes and expenses I'm looking at getting just less than 10% of that 25k back every year.
So at the end of the day I outlay 25k for a return of 10% After taxes per year and the apartment will be all paid off eventually as a side effect.

Glenbhoy

MMAGirl wrote: »

Small bit north of 10%.

There's a great thread called Darren's property portfolio. I did loads of research all over the place but that thread is one of the most useful. He doesn't update it anymore which is a pity.

To simplify it more though. I out up 25k to cover deposit, solicitor etc. I should have no more to put up that doesn't come from the rent. After taxes and expenses I'm looking at getting just less than 10% of that 25k back every year.
So at the end of the day I outlay 25k for a return of 10% After taxes per year and the apartment will be all paid off eventually as a side effect.

Are bank's happy to give BTL mortgages on apartments though?? I thought that BTL mortgages were proving extremely difficult to obtain and mortgages on apartments are also proving extremely difficult to obtain, so putting them together should have been a total no-no??

Galego

MMAGirl wrote: »

Small bit north of 10%.

There's a great thread called Darren's property portfolio. I did loads of research all over the place but that thread is one of the most useful. He doesn't update it anymore which is a pity.

To simplify it more though. I out up 25k to cover deposit, solicitor etc. I should have no more to put up that doesn't come from the rent. After taxes and expenses I'm looking at getting just less than 10% of that 25k back every year.
So at the end of the day I outlay 25k for a return of 10% After taxes per year and the apartment will be all paid off eventually as a side effect.

10% is an amazing return but to my knowledge you calculate the annual rental yield of a property but annual rental income (less operating expenses) / total invested amount in the property (included all related costs of acquisition).

I was pretty sure that it was pretty much a ROE formula. Please correct me if I am wrong.

Glenbhoy

Galego wrote: »

10% is an amazing return but to my knowledge you calculate the annual rental yield of a property but annual rental income (less operating expenses) / total invested amount in the property (included all related costs of acquisition).

I was pretty sure that it was pretty much a ROE formula. Please correct me if I am wrong.

So the 10% yield is actually 10% on the initial investment of 25K?? Re-reading MMAGirl's post I can see how you'd come to that conclusion.

You are correct of course, yield is not calculated on the amount of cash you invest, but rather on the amount of the investment which must also include all borrowings required to acquire the asset.

MMAGirl

Glenbhoy wrote: »

So the 10% yield is actually 10% on the initial investment of 25K?? Re-reading MMAGirl's post I can see how you'd come to that conclusion.

You are correct of course, yield is not calculated on the amount of cash you invest, but rather on the amount of the investment which must also include all borrowings required to acquire the asset.

The return on the 25k i gave is not a yield calculation. It just happens by coincidence that yield calculation gives roughly the same figure as the yearly return on the 25k. That return is after tax too. There are numerous sources for getting the formula for yield if you google it.

If banks aren't giving mortgages I can't say I noticed any difficulty. But I suppose the bank is the place to ask about that one. I'm sure they refuse some and lend to others at their discression.

Hoop66

Excuse my (maybe) silly question, but does this mean that if I buy an apartment for 100k and the rent is 10k/year, that I'm getting 10% yield?

MMAGirl

Hoop66 wrote: »

Excuse my (maybe) silly question, but does this mean that if I buy an apartment for 100k and the rent is 10k/year, that I'm getting 10% yield?

No. Look up yield calculations and you can work some examples. There will be different formulae and some are more meaningful than others.

flintash

MMAGirl wrote: »

No. Look up yield calculations and you can work some examples. There will be different formulae and some are more meaningful than others.

why do you say no? i see 10% before taxes ,expenses,maintanance,,etc. well,whats left after that its different in each case.isnt it?

Galego

Hoop66 wrote: »

Excuse my (maybe) silly question, but does this mean that if I buy an apartment for 100k and the rent is 10k/year, that I'm getting 10% yield?

Yes. Annual Income/investment * 100 = annual rental yield

This is with the assumption that there are no annual operating expenses or any cost of finance on the 100k.

MMAGirl

flintash wrote: »

why do you say no? i see 10% before taxes ,expenses,maintanance,,etc. well,whats left after that its different in each case.isnt it?

At its simplest If you buy a 100k property it will cost you more than 100k before you rent it out. Just google yield calculations.

Hoop66

OK, I should clear up. If I spend 100k total on a property and I rent it out at 830/month. does THAT mean I get 10% yield?

Next question:

I have (or will have) a cash sum within the next 6 months or so. Would anybody recommend buying a city-centre apartment for cash? The idea being that if there is no mortgage to service, all rent is profit and this makes it much easier to weather any periods where I have no tenant in the apt.

Slightly off-topic, I know, but it could be tenuously related to Dublin property prices.

Galego

Hoop66 wrote: »

OK, I should clear up. If I spend 100k total on a property and I rent it out at 830/month. does THAT mean I get 10% yield?

Next question:

I have (or will have) a cash sum within the next 6 months or so. Would anybody recommend buying a city-centre apartment for cash? The idea being that if there is no mortgage to service, all rent is profit and this makes it much easier to weather any periods where I have no tenant in the apt.

Slightly off-topic, I know, but it could be tenuously related to Dublin property prices.

To be accurate in the answer we would need to know:

From an expense point of view:
- Annual running expenses related to the property.
- If a loan, annual interest paid.
- Any possible taxes paid annually.

From a finance cost:
- Any costs related to the acquisition of the property (e.g. solicitor, stamp duty, etc)

roro2

Hoop66 wrote: »

OK, I should clear up. If I spend 100k total on a property and I rent it out at 830/month. does THAT mean I get 10% yield?

Yes, 10% is the gross yield. It ignores the costs of buying the property, ongoing expenses, tax, etc. And it is not dependent on how the purchase was financed - i.e. with a mortgage or cash. It is probably the most relevant measure when comparing property investments as tax will be dependent on an individual's circumstances and any mortgage financing, while costs may also be different for different people.

Net yield will be lower, it takes account of costs and is probably more useful on an individual basis.

Galego

roro2 wrote: »

Yes, 10% is the gross yield. It ignores the costs of buying the property, ongoing expenses, tax, etc. And it is not dependent on how the purchase was financed - i.e. with a mortgage or cash. It is probably the most relevant measure when comparing property investments as tax will be dependent on an individual's circumstances and any mortgage financing, while costs may also be different for different people.

Net yield will be lower, it takes account of costs and is probably more useful on an individual basis.

+1

Amen to that although cost of finance will play a big role on any investment return.

mari2222

The gross yield on 100,000 apartment whose rent is 10,000 per year is 10%.
The calculation is useful for comparison with, for example, putting the money in a bank for a year, which at present might yield around 4%. The 4% is also "gross" as there will be DIRT deducted.

But having a way of calculating gross yield is useful for either looking at trends (changes over time) or comparing investments in different sectors.

MMAGirl

Hoop66 wrote: »

OK, I should clear up. If I spend 100k total on a property and I rent it out at 830/month. does THAT mean I get 10% yield?

Next question:

I have (or will have) a cash sum within the next 6 months or so. Would anybody recommend buying a city-centre apartment for cash? The idea being that if there is no mortgage to service, all rent is profit and this makes it much easier to weather any periods where I have no tenant in the apt.

Slightly off-topic, I know, but it could be tenuously related to Dublin property prices.

Do a search for Darrens property portfolio.

StillWaters

Whilst all your rent is profit, it also means it is all taxable (bar allowable expenses) with a mortgage, you can offset 75% of the interest against tax. So as well as the adage of spreading your investments, eggs in baskets etc, it can make sense to leverage to buy an investment property.

Really if you are coming into that sort of money you should seek independent financial advice.

murphaph

mari2222 wrote: »

The calculation is useful for comparison with, for example, putting the money in a bank for a year, which at present might yield around 4%. The 4% is also "gross" as there will be DIRT deducted.

This is exactly where gross yield is not useful surely because the DIRT is basically fixed for everyone (so they can give you an AER that accounts for DIRT being deducted, whereas nobody can give you a simple net yield for a given property without knowing many other factors)

The net yield is all that matters at the end of the day, be that the net yield on rents or the net yield on your deposit (after DIRT is all that matters to me at the end of the day)

Glenbhoy

MMAGirl wrote: »

The return on the 25k i gave is not a yield calculation. It just happens by coincidence that yield calculation gives roughly the same figure as the yearly return on the 25k. That return is after tax too. There are numerous sources for getting the formula for yield if you google it.

If banks aren't giving mortgages I can't say I noticed any difficulty. But I suppose the bank is the place to ask about that one. I'm sure they refuse some and lend to others at their discression.

Apologies, I hadn't originally thought that, but it did look a little too coincidental to ignore.

Glenbhoy

Hoop66 wrote: »

OK, I should clear up. If I spend 100k total on a property and I rent it out at 830/month. does THAT mean I get 10% yield?

Next question:

I have (or will have) a cash sum within the next 6 months or so. Would anybody recommend buying a city-centre apartment for cash? The idea being that if there is no mortgage to service, all rent is profit and this makes it much easier to weather any periods where I have no tenant in the apt.

Slightly off-topic, I know, but it could be tenuously related to Dublin property prices.

as someone else noted you want a mortgage in order to maximise the tax benefits. If this was 10 yrs ago, most people would be telling you to buy 10 properties putting down 10K on each!!

super_furry

Still don't think we'll know where we are until the repossessions start in earnest.

gaius c

MMAGirl wrote: »

I think its worth a punt at this point.
Im closing on an investment property tomorrow.
Numbers are good.
Basically I put up 25k deposit and then the mortgage is going to cost me no more than a days wages per month and at the moment the rental income will be twice what the mortgage is.

Thats workable and I think i'll be doing it again soon.
Brother in law already has two apartments in the same place.

The mortgage is a days wages per month for you and the rental income is double the mortgage so somebody can rent the place for a whole year for just 24 days of your salary and you can buy it outright with just 240 days of working.

Once you do some sums for various permutations of your possible salary on a spreadsheet, you start to see just how improbable those figures are:
(have done a little bit of rounding for legibility)

Assumed salary: 40000
Daily salary: 150
Rent: 300
Value: 36k (300*12/10%)
Would a place that sells for 37k really pull in 300 a month rent? That kind of money is garden-shed type stuff.

Assumed salary: 60000
Daily salary: 230
Rent: 460
Value: 55k
Would a place that sells for 55k really pull in 460 a month rent?

Assumed salary: 80000
Daily salary: 310
Rent: 620
Value: 74k
Would a place that sells for 74k really pull in 620 a month rent?

Assumed salary: 100000
Daily salary: 385
Rent: 770
Value: 92k
Would a place that sells for 92k really pull in 770 a month rent?
That's one bed in Dublin city one bed apartment-level rent but you'd be doing well to get those for 92k.

It gets even more improbable the higher you go.

MMAGirl

gaius c wrote: »

The mortgage is a days wages per month for you and the rental income is double the mortgage so somebody can rent the place for a whole year for just 24 days of your salary and you can buy it outright with just 240 days of working.

Once you do some sums for various permutations of your possible salary on a spreadsheet, you start to see just how improbable those figures are:
(have done a little bit of rounding for legibility)

Assumed salary: 40000
Daily salary: 150
Rent: 300
Value: 36k (300*12/10%)
Would a place that sells for 37k really pull in 300 a month rent? That kind of money is garden-shed type stuff.

Assumed salary: 60000
Daily salary: 230
Rent: 460
Value: 55k
Would a place that sells for 55k really pull in 460 a month rent?

Assumed salary: 80000
Daily salary: 310
Rent: 620
Value: 74k
Would a place that sells for 74k really pull in 620 a month rent?

Assumed salary: 100000
Daily salary: 385
Rent: 770
Value: 92k
Would a place that sells for 92k really pull in 770 a month rent?
That's one bed in Dublin city one bed apartment-level rent but you'd be doing well to get those for 92k.

It gets even more improbable the higher you go.

Oh, my very own stalker.
Not that you are there yet, but even on your last calculation, you can buy a place for and rent for those numbers easily in Dublin.
But I have to ask. What is the point of your post?
To make yourself feel better if I was lying?

Your calculations are fundamentally flawed too.
You dont know my daily rate. You dont know how many days I work. You dont know my tax rate. You dont know if I get a bonus. There are so many variables you dont know and i'm not inclined to publish them either.

If you want proper calculations talk to this guy
http://www.boards.ie/vbulletin/showthread.php?p=79604340

Now please go get a life.

RATM

@MMAGirl, I don't think it is about stalking, its just your figures stand out. When I read your post yesterday and saw that it is possible to buy an apartment with one days salary per month and also that the rent was twice what the mortgage is I too was surprised. In fairness to anyone on an average salary your numbers seem to good to be true.

But like you said there are other variables, if you are earning €120k+ then you can more than afford the mortgage even if interest rates rise a good bit from where they are now.

L1011

gaius c wrote: »

Assumed salary: 100000
Daily salary: 385
Rent: 770
Value: 92k
Would a place that sells for 92k really pull in 770 a month rent?
That's one bed in Dublin city one bed apartment-level rent but you'd be doing well to get those for 92k.

Think that's the sweet spot where it might be possible on those calculations. There's 11 one beds in Daft's idea of the city centre under 100k. Some of them are actually pretty central: http://www.daft.ie/searchsale.daft?id=710477

Would you get 770 for that though, I dunno.

murphaph

MYOB wrote: »

Think that's the sweet spot where it might be possible on those calculations. There's 11 one beds in Daft's idea of the city centre under 100k. Some of them are actually pretty central: http://www.daft.ie/searchsale.daft?id=710477

Would you get 770 for that though, I dunno.

Aside...do many apartments (built in the last 20 years like that place) in Ireland have real fireplaces? I can't say I've ever taken much notice but I would have thought it unusual?

MMAGirl

RATM wrote: »

@MMAGirl, I don't think it is about stalking, its just your figures stand out. When I read your post yesterday and saw that it is possible to buy an apartment with one days salary per month and also that the rent was twice what the mortgage is I too was surprised. In fairness to anyone on an average salary your numbers seem to good to be true.

But like you said there are other variables, if you are earning €120k+ then you can more than afford the mortgage even if interest rates rise a good bit from where they are now.

You can see why your figures are useless then. Sure you don't even know what the mortgage is or what perc deposit I paid.
You just pulled figures out of thin air. yet you come in with workings like they actually mean anything.

nomoreindie

MMAGirl wrote: »

You can see why your figures are useless then. Sure you don't even know what the mortgage is or what perc deposit I paid.
You just pulled figures out of thin air. yet you come in with workings like they actually mean anything.

Your figures look too good to be true.
You are stating that what you earn in 1 day will pay the monthly mortgage on your investment property and that the rent coming in is twice the mortgage.

Anynama141

MMAGirl wrote: »

Now please go get a life.

Your defensive attitude just cements the notion that you are making this stuff up.

And if you are not factoring in the opportunity cost of your investment, the whole point is nonsense anyway. I could buy a place with a 1% mortgage (if anyone would lend it to me) and 99% deposit and claim I'm paying for a property before 10am on the first Monday of every month.

Without numbers, your post is also totally pointless.

RATM

MMAGirl wrote: »

You can see why your figures are useless then. Sure you don't even know what the mortgage is or what perc deposit I paid.
You just pulled figures out of thin air. yet you come in with workings like they actually mean anything.

They're your figures, re-read the thread, I didn't pull any numbers out of the sky.

But your defensive attitude is making me think that you have

If you want to be an advocate for jumping into buy-to-let apartments while we are at the dawn of the biggest repo program in the history of the state then fair enough, be my guest.

But for your own sake learn the lessons of the past and make sure you've got your sums right.

Victor

MMAGirl wrote: »

Now please go get a life.

Play nice

Moderator

MMAGirl

Victor wrote: »

Play nice

Moderator

Basically I'm being called a I liar when I try to contribute to the conversation. It's typical of the attacks you always get here from people who just hate anything to do with property that doesn't end in financial ruin from the buyer.

Anyone sensible can work out figures properly for themselves on whether what I said is workable or not.
I didn't even start this thread yet it has become a thread specifically to bash me.
I could have got involved in the conversation and maybe helped some people out but now there is just a bad taste here. i'm out.

lima

MMAGirl wrote: »

I think its worth a punt at this point.
Im closing on an investment property tomorrow.
Numbers are good.
Basically I put up 25k deposit and then the mortgage is going to cost me no more than a days wages per month and at the moment the rental income will be twice what the mortgage is.

Thats workable and I think i'll be doing it again soon.
Brother in law already has two apartments in the same place.

If you want to be an advocate for jumping into buy-to-let apartments while we are at the dawn of the biggest repo program in the history of the state then fair enough, be my guest.

There's a reason I am still renting even though I have mortgage approval and 3 times that amount for deposit.

The cards are coming down this year, roll on repo's

gaius c

MMAGirl
I'm an engineer so playing with figures is childsplay to me and you don't seem to realise it but you pretty much gave us all the figures bar the daily salary and I was able to make some assumptions on that.

Just so we're clear on the maths.
You said mortgage equals daily salary.
You said rent equals double that.
You said yield equals 10% so 120 x rent = sale price of the property
You also told us that you paid down a 25k deposit so we can make a stab as to how much you had to borrow but to be honest, I have no idea why you are borrowing when you can buy properties for less than a year of your salary.

Why did I do these sums?
Because your credibility is suspect and I don't believe you. Only a month ago, you were displaying your ignorance re part 4 tenancies and getting extremely defensive when everybody asked you to cease & desist. Now you're some sort of master investor getting yields even Warren Buffet would be happy with?

If you're a credible poster telling the truth, then fine, this is information that should be shared but if you're spoofing and posting suspect figures to push an agenda or troll, then it's reasonable to question those figures. You should appreciate this as good investors are the most sceptical of folk!

gaius c

MYOB wrote: »

Think that's the sweet spot where it might be possible on those calculations. There's 11 one beds in Daft's idea of the city centre under 100k. Some of them are actually pretty central: http://www.daft.ie/searchsale.daft?id=710477

Would you get 770 for that though, I dunno.

Excellent post and if MMAGirl was actually telling the truth it is the type of post she would have made. There's 55 one beds for rent in Dublin 1 and asking rents for the first ten are as follows:
750
850
1050
850
975
850
650
900
750
695

Only one Parnell St address for let and that's going at 695. Assuming that they are similar then that points to 9.3% yield.

Possibly plausible if it wasn't coming from a poster with a habit of flying off the handle and pointing to some defunct thread as her backup when challenged.

StillWaters

There are such yields out there still. Rare enough, but such bargains can be picked up. The problem most people have is accessing finance, also in terms of borrowing, It makes sense to borrow for property even if you have cash reserves.

murphaph

StillWaters wrote: »

There are such yields out there still. Rare enough, but such bargains can be picked up. The problem most people have is accessing finance, also in terms of borrowing, It makes sense to borrow for property even if you have cash reserves.

Some people on this thread are jealous IMO but that's all I'll say about that.

As regards it making sense to borrow even if you have the cash...
I wonder, does it make sense only so long as you are allowed to deduct 75% or mortgage interest and/or your interest rate is low?

Would it still make sense to borrow (assuming you have the cash) if interest rates were 10% and the govt decided to completely strip the interest deduction (they were already way out of line reducing it to 75% IMO, it's a business or it isn't after all!).

So, imagine you had high interest rates (deposits would come nowhere near in this case) and no interest deduction allowed...would it then make sense to plough your own cash into the property?

I understand the "old way" was to leverage as much as possible and hope that capital appreciation would make up for it but that is a dangerous strategy as we have seen.

Thoughts welcome...I'm not an expert on this side of things.

roro2

murphaph wrote: »

Some people on this thread are jealous IMO but that's all I'll say about that.

As regards it making sense to borrow even if you have the cash...
I wonder, does it make sense only so long as you are allowed to deduct 75% or mortgage interest and/or your interest rate is low?

Would it still make sense to borrow (assuming you have the cash) if interest rates were 10% and the govt decided to completely strip the interest deduction (they were already way out of line reducing it to 75% IMO, it's a business or it isn't after all!).

So, imagine you had high interest rates (deposits would come nowhere near in this case) and no interest deduction allowed...would it then make sense to plough your own cash into the property?

I understand the "old way" was to leverage as much as possible and hope that capital appreciation would make up for it but that is a dangerous strategy as we have seen.

Thoughts welcome...I'm not an expert on this side of things.

But you don't need to rely on capital appreciation if you get a sufficient rental yield. Yes, the old way was to ignore rental yield and rely on capital appreciation but that doesn't need to be the case now if you choose your investments wisely.

It is riskier to take on high leverage, but not if you have cash resources and are taking on the leverage for tax efficiency purposes while retaining the cash. It may still make sense to borrow now even if you have the cash. As you say, interest rates are low and there are tax advantages. Just because interest rates may increase in the future and the tax advantages may be removed at some point does not simply mean "ploughing your own cash" into a purchase is the thing to do. Again, just retain the cash and if interest rates or tax structures are no longer advantageous - clear the borrowings. Taking on leverage without any cash is a different story.

murphaph

roro2 wrote: »

But you don't need to rely on capital appreciation if you get a sufficient rental yield. Yes, the old way was to ignore rental yield and rely on capital appreciation but that doesn't need to be the case now if you choose your investments wisely.

It is riskier to take on high leverage, but not if you have cash resources and are taking on the leverage for tax efficiency purposes while retaining the cash. It may still make sense to borrow now even if you have the cash. As you say, interest rates are low and there are tax advantages. Just because interest rates may increase in the future and the tax advantages may be removed at some point does not simply mean "ploughing your own cash" into a purchase is the thing to do. Again, just retain the cash and if interest rates or tax structures are no longer advantageous - clear the borrowings. Taking on leverage without any cash is a different story.

No, I just meant that if those things changed then I guess it would no longer make sense to borrow most likely. Those things (really just the tax advantage I suppose) are what causes it to make sense to borrow even if you have the money.

bobbyg

What was the point of this thread?

gaius c

bobbyg wrote: »

What was the point of this thread?

Bullish troll tries to get a rise out of people and gets burned.

PhilMcGee

I like that idea of the calculation of return on money invested.
Never thought of it that way before, but it makes a lot of sense.

Amount put on the table.
Yearly return as a percentage of that.
Great concept. Kind of like a normal interest calculation after dirt.

About getting a mortgage on investment properties, I think its a good idea to do that for the tax reasons and gearing, but it might not be for everyone, and you certainly dont want to gear to much.

The Nutty M

Nevermind those haters MMAgirl,as you seen in Darren's property portfolio the same type of comments (possibly the same people :rolleyes:) engulfed his thread.The amount of good sound actual evidence he posted was brilliant.The yields are there and you and I both know it.

In the stupid times people were buying properties with below 5% yields but there was no sign of the engineers crunching numbers then like they are now.It's a bit of a cliche but the time is right to invest.I am in the midst of closing on a BTL like yourself MMAgirl and have a modest 8% yield set.Any money made will be an added bonus although all I'm looking for is to own a house or two at the end of it.


I wish you well and hope all goes with fairly smooth sailing.I wouldn't blame you like I don't blame Darren for not posting on the subject anymore.As you know yourself,they're are always hurlers on the ditch and always will be.Picture their names or faces on the punchbag next time you thump it,it gives great satisfaction.:D

Enjoy.

PhilMcGee

The Nutty M wrote: »

Nevermind those haters MMAgirl,as you seen in Darren's property portfolio the same type of comments (possibly the same people :rolleyes:) engulfed his thread.The amount of good sound actual evidence he posted was brilliant.The yields are there and you and I both know it.

In the stupid times people were buying properties with below 5% yields but there was no sign of the engineers crunching numbers then like they are now.It's a bit of a cliche but the time is right to invest.I am in the midst of closing on a BTL like yourself MMAgirl and have a modest 8% yield set.Any money made will be an added bonus although all I'm looking for is to own a house or two at the end of it.


I wish you well and hope all goes with fairly smooth sailing.I wouldn't blame you like I don't blame Darren for not posting on the subject anymore.As you know yourself,they're are always hurlers on the ditch and always will be.Picture their names or faces on the punchbag next time you thump it,it gives great satisfaction.:D

Enjoy.

Can you post a link to that portfolio thread you are posting about. I would be interested in reading it.
This thread caught my eye today and I posted in it.
I have a spreadsheet that I've said im going to post in another thread when I get home. Then I read the rest of this thread and im actually afraid to post it in this thread, :eek: so i think i'll stick to the other one.

Anynama141

The Nutty M wrote: »

In the stupid times people were buying properties with below 5% yields but there was no sign of the engineers crunching numbers then like they are now.

Plenty of 'engineers' crunched the numbers then too - the evidence is all over the internet.

The difference is that they were ignored during the bubble as people were caught up in property hysteria. Now a few more people actually pay attention. Not many, but a few.

The Nutty M wrote: »

I wish you well and hope all goes with fairly smooth sailing.I wouldn't blame you like I don't blame Darren for not posting on the subject anymore.As you know yourself,they're are always hurlers on the ditch and always will be.Picture their names or faces on the punchbag next time you thump it,it gives great satisfaction.:D

That reminds me of something...what was it again...

The Bertie wrote:

"Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something."

That was Ahern's response to people warning about the property bubble. The were just moaners.

NinjaTruncs

MMAGirl why not put up the numbers, I'm not sure if it's been said already but your calculations have one major flaw that I can see, you're not including the additional money your going to add every month.

Lets say for instance you need to put in an additional 200 a month, don't forget it's not just mortgage shortfall you will have to cover, there is tax and other expenses that will crop up that need to be factored in, so I'd say 200 is a reasonable figure. That would be 2400 a year.

If you're expecting to make a yield of 10% on your 25K that would mean you're getting 2500 a year, however this is less the 2400 in additional money you are going to put into the property so in fact you will only make 100 a year on your 25K. Lets say the 200 a month is more than you'd need to put in lets call it 100 a month that would still only leave you with 1300 a year or 5% without taking into account un-rented time or interest rate increases both of which will occur over the lifetime of your investment.

The above numbers are rough, as they have to be without you providing real values, but you're hope of 10% PA on your initial 25K investment is very optimistic.

PhilMcGee

NinjaTruncs wrote: »

MMAGirl why not put up the numbers, I'm not sure if it's been said already but your calculations have one major flaw that I can see, you're not including the additional money your going to add every month.

Lets say for instance you need to put in an additional 200 a month, don't forget it's not just mortgage shortfall you will have to cover, there is tax and other expenses that will crop up that need to be factored in, so I'd say 200 is a reasonable figure. That would be 2400 a year.

If you're expecting to make a yield of 10% on your 25K that would mean you're getting 2500 a year, however this is less the 2400 in additional money you are going to put into the property so in fact you will only make 100 a year on your 25K. Lets say the 200 a month is more than you'd need to put in lets call it 100 a month that would still only leave you with 1300 a year or 5% without taking into account un-rented time or interest rate increases both of which will occur over the lifetime of your investment.

The above numbers are rough, as they have to be without you providing real values, but you're hope of 10% PA on your initial 25K investment is very optimistic.

I hope she does put them up. One more post mmagirl?
Im going to put mine up in another thread so whoever want to can look them up later.s
I already had 3 investment properties from years ago.
I only just started buying again last year.

From experience though, total vacant time between the 3 is about 4 months in 14 years . Maintenance averages about 500 to 600 per year each. Only costs me about half that because it comes of taxable profit.
Worked out the way she does it im easily getting about 10% per year after taxes and expenses on my initial investment on the properties ive bought in the last year. Theres no point doing that on the ones i had already because they cost very little and the mortgages are very low, and they are trackers, so it doesnt compare to todays climate well at all. They would each give a huge percentage on that calculation. And it would have been even bigger when rents were at their highest.

Thats from memory.
I'll have a look at my spreadsheets when im home and work it out properly.

I found that portfolio thread. I'll read it later.

The Nutty M

PhilMcGee wrote: »

Can you post a link to that portfolio thread you are posting about. I would be interested in reading it.
This thread caught my eye today and I posted in it.
I have a spreadsheet that I've said im going to post in another thread when I get home. Then I read the rest of this thread and im actually afraid to post it in this thread, :eek: so i think i'll stick to the other one.

http://www.boards.ie/vbulletin/showthread.php?p=79604340

Here's the thread:p. Don't expect too much off anything you post in any thread as you can see the diverse opinions of what is and is not the truth.


Edit
Hadn't read your second reply Phil McGee.Fair do's to you for posting,another person with experience of the market and what it is like,not a hurler on the ditch.

The Nutty M

Anynama141 wrote: »

Plenty of 'engineers' crunched the numbers then too - the evidence is all over the internet.

The difference is that they were ignored during the bubble as people were caught up in property hysteria. Now a few more people actually pay attention. Not many, but a few.

That reminds me of something...what was it again...

That was Ahern's response to people warning about the property bubble. The were just moaners.

Do you accept that a statement made by an engineer about the property market holds as much weight as a politician talking about the property market?