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What is your view on the property market currently?
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ShowMeTheCash wrote: »If people make huge margins then ultimately those margins come from the people either renting or buying homes, so certain ethical questions come into play. But then if you make a huge margins then Tom, Dick and Harry will want to get in on it also..... You see where this is going.
I don't suppose that you care to show me stats as to the average buyer (not the rich, or real estate companies) of property has been making huge profits on their houses in the last ten years? Or are you pulling this out of your head?
And when I say profits, I'm not talking about purchase price vs selling price, but actual profit with the costs of mortgage, interest, maintenance, taxes, etc taken into account?0 -
Deleted User wrote: »I don't suppose that you care to show me stats as to the average buyer (not the rich, or real estate companies) of property has been making huge profits on their houses in the last ten years? Or are you pulling this out of your head?
And when I say profits, I'm not talking about purchase price vs selling price, but actual profit with the costs of mortgage, interest, maintenance, taxes, etc taken into account?
I think you are trying to be convenient with your timeline.
Also you have to take the cost of the asset into account, as the debt of the mortgage is finite. And ultimately someone else is paying for it.
House prices from 1995 to around 2000 on average doubled in Ireland and almost doubled again by 2007 that was 100K to 200K to 370K average by 2007.
If I bought a house in 1995 and rented it.
Even after I pay the mortgage, taxes maintenance and all other associated costs I break even in that I make no money from the rental in 12 years I have made a 370% return on the value of the property on a debt someone else is paying back.
I think anyone who buys to rent, if they break even then it is worth while. As ultimately it is an asset that is paying for itself.
You mentioned you made 1 or 2k profit for the year?
You have said a few times on the thread that "it worked for decades" I am saying it didn't. Making a profit on top of paying for the asset makes the whole thing appealing as it because a money for nothing scenario.0 -
ShowMeTheCash wrote: »I think you are trying to be convenient with your timeline.
Also you have to take the cost of the asset into account, as the debt of the mortgage is finite. And ultimately someone else is paying for it.
House prices from 1995 to around 2000 on average doubled in Ireland and almost doubled again by 2007 that was 100K to 200K to 370K average by 2007.
If I bought a house in 1995 and rented it.
Even after I pay the mortgage, taxes maintenance and all other associated costs I break even in that I make no money from the rental in 12 years I have made a 370% return on the value of the property on a debt someone else is paying back.
I think anyone who buys to rent, if they break even then it is worth while. As ultimately it is an asset that is paying for itself.
You mentioned you made 1 or 2k profit for the year?
You have said a few times on the thread that "it worked for decades" I am saying it didn't. Making a profit on top of paying for the asset makes the whole thing appealing as it because a money for nothing scenario.
You have made the case that property owners have been making large/huge profits from the purchasing and sale of said property, and because of that, other people wish to join, which makes the overall system unsustainable (in your opinion).
I asked you to show these huge profits (taking into account the costs inherent in having a property) that normal people were making. not the rich or the real estate companies. Normal people.
You've deflected instead. You made the claim. I'm simply asking you to either prove it or admit that you just assume that its the case. Prove its the case, and I'll change my opinion on the subject. Simple.0 -
Deleted User wrote: »You have made the case that property owners have been making large/huge profits from the purchasing and sale of said property, and because of that, other people wish to join, which makes the overall system unsustainable (in your opinion).
I asked you to show these huge profits (taking into account the costs inherent in having a property) that normal people were making. not the rich or the real estate companies. Normal people.
You've deflected instead. You made the claim. I'm simply asking you to either prove it or admit that you just assume that its the case. Prove its the case, and I'll change my opinion on the subject. Simple.
Are you sure you have a background in fiance? The math is not difficult.
House prices today again are on the rise but we can ignore this for argument sake so you do not get lost.
In order to work out profit you need to look at a number of things.
How much investment did you put in?
And what do get in return?
Let's keep it simple as I do not know what you paid.
You bought a house at 250K over 20 years.
Your rental covers the loan and by your own admission you make 1K or 2K a year on top of that.
So how much money did you put in at the beginning?
Did you pay a deposit?
Lets just say 10% for argument sake 25K
And for argument sake lets just say the house price will be the same at the end as it as in the beginning. 250K
25k Initial investment over 20 years with 2K a year return each year.
After 20 years that works out of 40K in rental profits and 250K on the value of the asset minus the deposit 25K = 225K
Total 40K + 225K = 265K that is over a 1000% return on your initial 25K and more than a 50% investment return per year.
Or 13,250 per year.
Other perks after 20 years and the mortgage is completely paid off your rental profits will increase although your owner % on the asset will stop as you now own 100% of it.
The above figure has not even looked at what the return would be if the value of the property increases.0 -
ShowMeTheCash wrote: »Are you sure you have a background in fiance? The math is not difficult.
House prices today again are on the rise but we can ignore this for argument sake so you do not get lost.
In order to work out profit you need to look at a number of things.
How much investment did you put in?
And what do get in return?
Let's keep it simple as I do not know what you paid.
You bought a house at 250K over 20 years.
Your rental covers the loan and by your own admission you make 1K or 2K a year on top of that.
So how much money did you put in at the beginning?
Did you pay a deposit?
Lets just say 10% for argument sake 25K
And for argument sake lets just say the house price will be the same at the end as it as in the beginning. 250K
25k Initial investment over 20 years with 2K a year return each year.
After 20 years that works out of 40K in rental profits and 250K on the value of the asset minus the deposit 25K = 225K
Total 40K + 225K = 265K that is over a 1000% return on your initial 25K and more than a 50% investment return per year.
Or 13,250 per year.
Other perks after 20 years and the mortgage is completely paid off your rental profits will increase although your owner % on the asset will stop as you now own 100% of it.
The above figure has not even looked at what the return would be if the value of the property increases.
not meaning to butt in here, but do you mean that the value of the house will remain at €250k after 20 years?0 -
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ShowMeTheCash wrote: »Are you sure you have a background in fiance? The math is not difficult.
House prices today again are on the rise but we can ignore this for argument sake so you do not get lost.
In order to work out profit you need to look at a number of things.
How much investment did you put in?
And what do get in return?
Let's keep it simple as I do not know what you paid.
You bought a house at 250K over 20 years.
Your rental covers the loan and by your own admission you make 1K or 2K a year on top of that.
So how much money did you put in at the beginning?
Did you pay a deposit?
Lets just say 10% for argument sake 25K
And for argument sake lets just say the house price will be the same at the end as it as in the beginning. 250K
25k Initial investment over 20 years with 2K a year return each year.
After 20 years that works out of 40K in rental profits and 250K on the value of the asset minus the deposit 25K = 225K
Total 40K + 225K = 265K that is over a 1000% return on your initial 25K and more than a 50% investment return per year.
Or 13,250 per year.
Other perks after 20 years and the mortgage is completely paid off your rental profits will increase although your owner % on the asset will stop as you now own 100% of it.
The above figure has not even looked at what the return would be if the value of the property increases.
Now, this analysis ignores the time value of money, the effects of tax, the additional expenses in maintaining the asset with its finite lifespan, the likelihood of vacant periods between tenants, as well as the risks inherent in a geared investment (it has only considered the upside).0 -
donegaLroad wrote: »not meaning to butt in here, but do you mean that the value of the house will remain at €250k after 20 years?
Just giving an example whereby the value of the asset does not change in 20 years.0 -
donegaLroad wrote: »can you see wage levels increasing sufficiently between now and then, in order for people to qualify for a mortgage of that size?
A lot is already changing in the present economy, in the Eurozone and internationally. There are economists who say that the dollar will no longer be a reserve currency in the foreseeable future. There is also Brexit, and its immediate and long term effects on ROI.
The highest average house price in Ireland is currently Dun Laoghaire / Rathdown @ €575k
The lowest is in Ireland is Longford @ €90k
The same standard and size of house, with a difference of €485k... 1 hour and 40 minutes away on the train. People are being hoodwinked once again.
People are not being hoodwinked. It was always thus - if you are fortunate enough to have money, a good job, a silver spoon whatever. Why would you not spend the extra money and avoid that 1 hour 40 minute train journey, twice a day for your working life. Or if you are from the area, stay around your family and friends rather than getting marooned in the arse hole of Longford.
The reason that Dun Laoghaire costs 5 times as much as Longford is that people want to live in Dun Laoghaire!0 -
Now, this analysis ignores the time value of money, the effects of tax, the additional expenses in maintaining the asset with its finite lifespan, the likelihood of vacant periods between tenants, as well as the risks inherent in a geared investment (it has only considered the upside).
The last OP said 1K to 2K profit per year after all associated costs.
It does ignore the time spent but thinking back to any property I rented I probably saw my landlord a few times a year.
But I also ignore the increasing value of the property over a 20 year spell. So I think I am being more than fair with the analysis.0 -
sbsquarepants wrote: »People are not being hoodwinked. It was always thus - if you are fortunate enough to have money, a good job, a silver spoon whatever. Why would you not spend the extra money and avoid that 1 hour 40 minute train journey, twice a day for your working life. Or if you are from the area, stay around your family and friends rather than getting marooned in the arse hole of Longford.
The reason that Dun Laoghaire costs 5 times as much as Longford is that people want to live in Dun Laoghaire!
€395k in Longford
€395k in Dun Laoghaire
Have a look at the photos of the house in Longford.
I know which one I would be going for
(and I was born in Dun Laoghaire)0 -
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sbsquarepants wrote: »People are not being hoodwinked. It was always thus - if you are fortunate enough to have money, a good job, a silver spoon whatever. Why would you not spend the extra money and avoid that 1 hour 40 minute train journey, twice a day for your working life. Or if you are from the area, stay around your family and friends rather than getting marooned in the arse hole of Longford.
The reason that Dun Laoghaire costs 5 times as much as Longford is that people want to live in Dun Laoghaire!
I think it is less about wanting to live in Dun Laoghaire and more about not wanting to commute. If you need to be in the city and are on a good wage you will migrate to a nice area within a reasonable commuting distance.0 -
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ShowMeTheCash wrote: »I think it is less about wanting to live in Dun Laoghaire and more about not wanting to commute. If you need to be in the city and are on a good wage you will migrate to a nice area within a reasonable commuting distance.
It used to take me approx 1 hour and 20 minutes to commute to Bray from Rathfarnham back in 2002, I had to go via UCD and drop someone off. I was paying to keep a van on the road too. Give me the choice today, I would live in Longford, in the house in the above link, and gladly take the train to Dublin every day to work. I would use the 1 hour and 40 minutes to do a bit of work or have a nap, and go home to a comfortable, spacious house in the evening.
I know that I would be getting good value for my money.0 -
donegaLroad wrote: »It used to take me approx 1 hour and 20 minutes to commute to Bray from Rathfarnham back in 2002, I had to go via UCD and drop someone off. I was paying to keep a van on the road too. Give me the choice today, I would live in Longford, in the house in the above link, and gladly take the train to Dublin every day to work. I would use the 1 hour and 40 minutes to do a bit of work or have a nap, and go home to a comfortable, spacious house in the evening.
I know that I would be getting good value for my money.
Sure, I do the same, I commuted from Donegal to Belfast a few days a week now, I lived in Belfast, Dublin, London and NY at different times of my life. Bit older now have kids so moved home to Donegal. I get to work remotely most of the time. Nice house, small farm on the coast beside the beach.
But it is relative, if you turn over 10 million a year in Dublin I doubt you would commute.0 -
It's amazing how short our memories are. I was just looking back on Boards as to what was exercising people's minds on the subject of property in past years.
As recently as 2013 the subject of 'ghost estates' was a hot topic as was negative equity. Rents were still very depressed at that time.
Posters were advocating different solutions for the ghost estate problem including the demolition of houses. Homelessness didn't feature at all.
As a poster pointed out on this thread, there has not been any dramatic increase in the population in the last four years or so. So, whatever happened to the ghost estates? Did they vanish into thin air?0 -
If I had the choice (and was remaining in my current place of work in Dublin), I'd buy the Dun Laoghaire house for sure - no contest!0
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ShowMeTheCash wrote: »Are you sure you have a background in fiance? The math is not difficult.
House prices today again are on the rise but we can ignore this for argument sake so you do not get lost.
And now you're switching to insulting me because you can't prove your own argument. You stated a huge profit margin for those involved in the investment of buying a property for resale and/or rental market. You still haven't proved that your assertion is true.<Snip>
The above figure has not even looked at what the return would be if the value of the property increases.
Vague figures calculated on a napkin. :rolleyes:
I asked for proof that your statement was correct. Your calculations prove nothing. Statistics, research, or links to decent articles. Gimme some evidence to prove that your assertion is true.
You keep answering a question I didn't ask.Deleted User wrote: »I don't suppose that you care to show me stats as to the average buyer (not the rich, or real estate companies) of property has been making huge profits on their houses in the last ten years? Or are you pulling this out of your head?
And when I say profits, I'm not talking about purchase price vs selling price, but actual profit with the costs of mortgage, interest, maintenance, taxes, etc taken into account?0 -
Deleted User wrote: »And now you're switching to insulting me because you can't prove your own argument. You stated a huge profit margin for those involved in the investment of buying a property for resale and/or rental market. You still haven't proved that your assertion is true.
Vague figures calculated on a napkin. :rolleyes:
I have shown my argument to be sound a few posts back why do you focus on the insult and not the figures? I think we both know the answer to that. You seem to want to focus on the short term return and not the long term.
Buy to let is a long term investment maybe you thought your rental yield would be higher like many greedy landlord before you and you would be getting rich now, I dunno....
Maybe like the yields in Dublin?
http://www.globalpropertyguide.com/Europe/ireland/Rental-Yields
Some places in Dublin are seeing almost 10% return on the rental yield alone.
But then this greed does have an impact
https://www.irishtimes.com/news/social-affairs/generation-rent-it-s-totally-out-of-your-control-1.2430985Deleted User wrote: »
I asked for proof that your statement was correct. Your calculations prove nothing. Statistics, research, or links to decent articles. Gimme some evidence to prove that your assertion is true.
You keep answering a question I didn't ask.
This is basic math, you talk about be deflecting you do not like the numbers but you cannot dispute them?
Having someone pay your mortgage is not a business.
One the one hand you want to include the cost of the mortgage when calculating your yield you only made 1 or 2K because you need to pay the mortgage right? But do not want to include the value of the property released by paying the mortgage?
The Revenue would disagree with you and is the reason you pay CGT on the sale of a buy to rent property which is not your personal residency.0 -
ShowMeTheCash wrote: »The last OP said 1K to 2K profit per year after all associated costs.
It does ignore the time spent but thinking back to any property I rented I probably saw my landlord a few times a year.
But I also ignore the increasing value of the property over a 20 year spell. So I think I am being more than fair with the analysis.
I think it is a fair analysis (given the point you're trying to prove), but the limitations need to be pointed out in case anyone gets the wrong idea.0 -
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ShowMeTheCash wrote: »I have shown my argument to be sound a few posts back why do you focus on the insult and not the figures?
I passed the figures because they proved nothing. And I focused on the insult because the insult was unnecessary. Did I insult you at any stage because you didn't agree with me?You seem to want to focus on the short term return and not the long term.
Hardly. I want to focus on your perception of huge profit margins for those purchasing properties as an investment. I don't believe that there are huge profits, because most people I know with properties are just covering the cost of the mortgage, interest, maintenance etc through the rent, and few are making any real profit (which the taxes/charges cut heavily into over time). And when it comes to selling their property, they will naturally think of all those previous expenses, and factor them in towards the sale of the property.
But sure, as you've linked below, you can show high rents for Dublin. Grand. Any links on the expenses associated with renting out, vs the rent paid?
Although TBH that's a sideline to what I originally asked from you.Buy to let is a long term investment maybe you thought your rental yield would be higher like many greedy landlord before you and you would be getting rich now, I dunno....
I bought my house to live in, and couldn't afford to pay the mortgage after the crash while living there, so I rented it out (which i mentioned before). My second property was an inheritance which I would love to sell, and get rid of, but there is no market to sell it for any real profit.Maybe like the yields in Dublin?
http://www.globalpropertyguide.com/Europe/ireland/Rental-Yields
Some places in Dublin are seeing almost 10% return on the rental yield alone.
But then this greed does have an impact
https://www.irishtimes.com/news/social-affairs/generation-rent-it-s-totally-out-of-your-control-1.2430985
There you go. You've given me the proof of the Dublin rental market. Did I ask about the rental market? Once again, answering a question I didn't ask.
I've asked this three times of you, and each time you've gone a different direction from the question itself.
In terms of property sales by average people (not real estate companies), prove the huge margins of profit you claim exist, taking into account all the associated costs involved with owning a property, and sale of that property?
Edit: -- My last time asking. I'm pretty sure you'll just deflect once again, and I've repeated this question enough0 -
Deleted User wrote: »I passed the figures because they proved nothing. And I focused on the insult because the insult was unnecessary. Did I insult you at any stage because you didn't agree with me?
Maybe try focusing on the figures, you claim to have worked in finance I am just surprised by your pov. It seems to be the pov of a landlord and someone who got stung by the bubble bursting and not someone who works in fiance.
I say this because this is what I do, I write software quantitative models for investment banks ironically enough working on a margin loan model as we speak, margins, loans, yield and maturity of assets. The buy to rent model treats the house as an asset.Deleted User wrote: »Hardly. I want to focus on your perception of huge profit margins for those purchasing properties as an investment. I don't believe that there are huge profits, because most people I know with properties are just covering the cost of the mortgage, interest, maintenance etc through the rent, and few are making any real profit (which the taxes/charges cut heavily into over time).
I will say it again this is because you are looking at the short term investment gains.
What would your margin be if you where not paying back the mortgage? You are ignoring the underlying asset and focuses sorely on the yield vs the loan.
Also the "mortgage" is getting paid to you in part, some on interest but a % goes to you in form of the asset which you do not yet own.Deleted User wrote: »But sure, as you've linked below, you can show high rents for Dublin. Grand. Any links on the expenses associated with renting out, vs the rent paid?
Although TBH that's a sideline to what I originally asked from you.
Good as I do not know what you are asking.Deleted User wrote: »
I bought my house to live in, and couldn't afford to pay the mortgage after the crash while living there, so I rented it out (which i mentioned before). My second property was an inheritance which I would love to sell, and get rid of, but there is no market to sell it for any real profit.
And I feel for you, same thing happened to my friend but then the truth is this. You took out a mortgage you could not really afford that is partially on you, I would also argue the bank holds some responsibility for giving you the mortgage. Personally I think more should of been done to help people in this particular situation. i.e. A partial writing off of the negative equity.
Also if you inherit a home I do not understand what you mean by any "real profit"?Deleted User wrote: »There you go. You've given me the proof of the Dublin rental market. Did I ask about the rental market? Once again, answering a question I didn't ask.
I've asked this three times of you, and each time you've gone a different direction from the question itself.
In terms of property sales by average people (not real estate companies), prove the huge margins of profit you claim exist, taking into account all the associated costs involved with owning a property, and sale of that property?
Three times? Have you actually read what you have wrote?Deleted User wrote: »"I'm not talking about purchase price vs selling price"
But now you are talking about the sale of a property? And do not care about the rental?
You are hard to follow!
You understand what a margin is? Money made after the cost?
By renting your home you no longer are covering the cost or at least that is the goal.
If you bought to rent and successfully do that then the Margin is huge as you as a person have not had to pony up any of the associated cost of the home, the home rental covers the cost of the property and you receive the full investment upon the payment of the loan.
Bit like investing in a 20 year bond but you are not paying into it, someone else is. Your job is just to ensure they do it every month at the same time.0 -
ShowMeTheCash wrote: »Sure, I do the same, I commuted from Donegal to Belfast a few days a week now, I lived in Belfast, Dublin, London and NY at different times of my life. Bit older now have kids so moved home to Donegal. I get to work remotely most of the time. Nice house, small farm on the coast beside the beach.
But it is relative, if you turn over 10 million a year in Dublin I doubt you would commute.
I know two different men who live in Donegal and commute to their work in London via Derry airport. Both of them are on very big money.0 -
donegaLroad wrote: »I know two different men who live in Donegal and commute to their work in London via Derry airport. Both of them are on very big money.
Where in Donegal you from?
The Stansted flights have changed used to be a lot cheaper but sometimes if you book well in advance it can be doable.
All relative, big money until you try and buy a house in London.
I done a Credit Suisse contract last year which was a London contract but I worked the entire contract remotely.0 -
Funny how your inability to answer my question/objection, and prove your own assertion of huge profit margins, is somehow a reflection on me... I'm done.0
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ShowMeTheCash wrote: »Where in Donegal you from?
The Stansted flights have changed used to be a lot cheaper but sometimes if you book well in advance it can be doable.
All relative, big money until you try and buy a house in London.
I done a Credit Suisse contract last year which was a London contract but I worked the entire contract remotely.
One guy is in Raphoe and the other in Carrigans. The Carrigans guy is into property and owns property in London, the other guy sold a very large house in London to move back to Donegal so his children could go to school here, but he still has a lot of business in London.
These are probably exceptions to the rule, both work for themselves.
A neighbour of mine 2 doors up, works in Birmingham and comes home every 2nd weekend. He drives a crane.. it pays well enough for him to do this.
My first cousin sold his house in Ranelagh to move to North Donegal where he owns a house, he does online trading.0 -
Well the first and easiest solution to start to tackle this issue would be to ban AirBnB rentals in Dublin.
This has taken too many rental beds out of the market and turned them into short term rentals instead.
But the fact they have their European headquarters here in Dublin will probably mean this will never happen.0 -
I see turmoil everywhere in this country be it the housing situation, crime, health service etc.. We are a terribly badly run nation but yet we pay those in power extremely well to do it and offer them a lottery winning pension at the end of their days despite the results of their failures. It's depressing to see FG do so well in the polls with what i see going on around me.
I guess you get the government and country you deserve.0 -
Deleted User wrote: »Funny how your inability to answer my question/objection, and prove your own assertion of huge profit margins, is somehow a reflection on me... I'm done.
You tied yourself in knots, could not clearly define a question, tried to shift the goal posts to the question and got stuck! Yes I agree you are done.0 -
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Well the first and easiest solution to start to tackle this issue would be to ban AirBnB rentals in Dublin.
This has taken too many rental beds out of the market and turned them into short term rentals instead.
But the fact they have their European headquarters here in Dublin will probably mean this will never happen.
Agreed, personally I think the country needs to go back to investing in actual council housing. Projects for low income people not owned privately. I think it could go some way to helping homelessness.0
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