![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
What source is your prediction of 100k based on?
Fair to work out property yield based on multiple sources?
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What source is your prediction of 100k based on?
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Precisely.
If I were him I'd be calling everyone on my books and instructing them to reset their expectations.
I am stunned by how few people have got any grasp of what's going on. Pull your heads out of the sand.
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[TW]Fox;11248996 said:
An article I read this morning, give me 2 mins and I'll find a link for you.
My bad, it was a forum post that's unsupported by any additional verifiable external links so I'll withdraw my comments. The figure quoted in the post was 10,000 not 100,000.
If you want to read it, here's the link.
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we'll see wont we, property is still selling, although the rental market has increase a lot this year.
property is still shifting at the right prices, no signs of the massive drop yet, not even a hint of it
The world is not ending.
You mentioned demand being irrelevent - it's not irrelevent - London is insulated especially when it comes to rental better than other areas in the UK because of the demand for certain types of properties. In some cases, demand for rental properties is increasing as people step off the property ladder and rent for 12 months to see which way the market is going to go...
Whats the right price?
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No of course it's not, the paper based monetary system is only close to total collapse, why would I be worried?!
Rentals are irrelevant, they have always existed and will always exist. This thread is about house purchase, so stay on topic.
To answer the OP question:
You can calculate the yield in different ways depending on what you consider to be your net income.
Think of it like this:
Rent (gross income)
-Operating Costs
-Taxes
-Any other costs
= Net Income
Now it depends what kind of yield you're trying to calculate because there's Income yield and there's debt yield.
Either yield should deduct costs and should therefore be based on Net Income.
Debt Yield: Net Income/Debt
Rental Yield: Net Income/Purchase Price + Costs
In residential property investment it would be suffice to say that you can work it out like this:
Net Income (all properties) / Purchase Price + costs (all properties)
Same with Debt Yield. You can also apply this to your interest cover but make sure you take each interest rate you're paying into account or use a blended rate.
You can calculate the yield in different ways depending on what you consider to be your net income.
Think of it like this:
Rent (gross income)
-Operating Costs
-Taxes
-Any other costs
= Net Income
Now it depends what kind of yield you're trying to calculate because there's Income yield and there's debt yield.
Either yield should deduct costs and should therefore be based on Net Income.
Debt Yield: Net Income/Debt
Rental Yield: Net Income/Purchase Price + Costs
In residential property investment it would be suffice to say that you can work it out like this:
Net Income (all properties) / Purchase Price + costs (all properties)
Same with Debt Yield. You can also apply this to your interest cover but make sure you take each interest rate you're paying into account or use a blended rate.
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I was in agreement with you earlier on but you are going a tad OTT now dont you think?
[TW]Fox;11249034 said:
that depends on the property
for example 2 properties that we took on 3 weeks ago, (after having them on the market a year ago - at a lower price) have had 2 poeple looking to buy them the prices have have been agreed at above the asking price due to the interest!
so a year ago they where on at £160,000 now £185,000 have sold in excess of that
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The Mad Rapper, the Bow area is under going an extensive redevelopment. With walking distance to the Olympic Site, 10 minute commute to the Canary Wharf offices, and 25 minute commute to the City, added with an excellent transport infrastructure surrounding the area, I pretty much doubt this area will fall into decline.
the thread is about a view to purchase a property to let out, so he is on topic
Don't be ludicrous.
Stay on topic indeed.
Demand for rental property and rental prices affects the ROI for this investment, as well as the entire viability of the investment considering that he's was planning to use the rental income to subsidise the mortgage.
I didn't tell him to invest, but I did tell him that the in the location he's looking to invest certainly has a lot of potential. At the end of the day every investment carries a certain amount of risk, and you have to weigh that risk up versus the potential reward. It's a personal judgement call that you have to make based on the information available.
Don't be ludicrous.
Stay on topic indeed.
Demand for rental property and rental prices affects the ROI for this investment, as well as the entire viability of the investment considering that he's was planning to use the rental income to subsidise the mortgage.
i have to agree. what makes you think 'the paper based monetary system is only close to total collapse'
i think you've gone abit to far with that one mate
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[TW]Fox;11249081 said:
I can see how it appears that way, but no.
I spend a lot of time each day looking at news from various economies around the globe, particularly the US. Not only are we exposed to US losses, but we shall also suffer heavily from our own losses.
The ECB has been lending billions to UK banks for months, when they indictated that they were going to stop lending the LIBOR increased out of whack with the BOE BR again.
One UK Hedge Fund lost £1 billion in one day and collapsed. Others are expected to follow because they are massively leveraged (the Peloton fund was leveraged something like 32.1 times!).
Don't take my word for it, do your own research and draw your own conclusions.
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Well there's this for starters:
http://www.ft.com/cms/s/0/253bb0ac-ec4a-11...00779fd2ac.html
The Federal Reserve on Friday fought back against tightening liquidity strains in financial markets, raising the size of its credit auctions to $100bn and making a further $100bn available through a series of new term repurchase operations.
The Fed said in a statement its actions were intended to ”address liquidity pressures in the funding markets”.
EDITOR’S CHOICE
Fed report tempers services revivial - Mar-06Banks urged to rethink pay deals - Feb-26Fed’s collateral book mostly in loans - Feb-24Fed chief's speech knocks banks and mortgage groups - Mar-05Fed ready to act if prices psychology turns sour - Feb-22Martin Wolf: US risks mother of all meltdowns - Feb-19The 28-day term repurchase operations will allow primary dealers to borrow against any type of securities, including agency-backed mortgages. The Fed said it expected the series of term repos ”to cumulate to $100bn.”
The credit auctions will be done via the Fed’s Term Auction Facility, which allows banks to borrow from the Fed at lower interest rates than those offered at the discount window.
The US central bank also said that it would conduct the TAF auctions for at least the next six months ”unless evolving market conditions clearly indicate that such auctions are no longer necessary.”
The Fed announced the TAF program in mid-December as part of a co-ordinated package of measures unveiled by leading western central banks to calm money markets.
It said it could increase the size of both facilities if needed, adding that it was in ”close consultation with foreign central bank counterparties concerning liquidity conditions in markets.”
However, there was no announcement on further swap deals to create additional offshore dollar liquidity.
The Fed has loaned $160bn in funds since mid-December in six auctions through the TAF in an effort to increase the supply of funds available for lending.
”This is clearly an attempt by the Fed to keep the market from thinking there will be an inter-meeting ease, said Ian Lyngen, strategist at RBS Greenwich Capital.
On Friday Richard Fisher, president of the Dallas Fed said investors should not expect the Fed to maintain the recent pace of rate cuts, after emergency and rapid cuts in January.
“We reacted with very deliberate actions’’ in January, Mr Fisher said in an interview with Bloomberg. “That shouldn’t lead markets to expectations that we will continue to react in that manner.’’
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That's not true at all. I know quite a few people who didn't have any problems getting a 100% mortgage on a reasonably low salary.
I note your in Devon, when I last looked, this was infact one of the more affordable areas in the entire south/southeast/southwest.
again, i have made that comment on my personal expirence, not saying its the same for everywhere.
