Property - A nett zero investment

Georgia

"TJ-what ever possessed you to buy a property in the 90's and sell it now,my god, how much did you lose?????????"

Tell me you are joking right?

How did you know I was Nick Leeson.

Damm I thought I had left those days behind

 Spam post or abuse? Please let us know

Apologies if I had covered or repeated any points already raised sadly busy in good ole UK pushing water uphill re mortgages and investment yields!
I beleive rental yields in Spain can be far more profitable (gross, am not going into tax regimes here!) if your property is rented out or marketed sufficiently well.
On average it will take 3-4 seasons to fillout the mian seasons weeks form repeat business etc, assume an 18 week high season, June, July, August and one week either side, plus two UK half terms plus two weeks at Xmas.
 Rukle of thumb has shown me that if you let out your Spanish property for 11.5 months your rentla income will match your standard 70% ltv mortgage, allowing you no useage whatso ever however if you let it for any of the weeks in the "high" season you should receive just below a months mortgage amount for that one week.
 As with everything the term speculate to accumulate kicks in I would recommend a personalised dvd of ones place, the surrounding area etc as these are cost effecitve , personalised and easy to post.

Help! how does one who is completely computer illiterate get to place a furry animal or singing dancing ape etc on to their postings-apart form wait for the kids to get home from school!

 Spam post or abuse? Please let us know

Hi Nick,

"TJ-what ever possessed you to buy a property in the 90's and sell it now,my god, how much did you lose?????????"

Tell me you are joking right?"

That was a little tongue in cheek,sorry,sarcasm is not my strong point!

I am lucky i suppose i don't have to worry about yields,capital growth,performance indexes etc...
If i want a decent yield i get 9% in the bank.
Unfortunately i have tried living there but they kick me out at 2pm when they close.
I have no doubt you are right about investment here short term but i know i am right about about a home here.
Off to the footie now,have a ggod one.

 Spam post or abuse? Please let us know

My knowledge of Financial and property markets is limited but I do know that a lot of "baby boomers" bought around the early 1970's and have made a lot of money on their purchases. Just as well as our pension funds have performed pretty poorly!

 Spam post or abuse? Please let us know

"If i want a decent yield i get 9% in the bank"
Georgia, which bank?????????????

 Spam post or abuse? Please let us know

TJ
"A simple and effective way to purchase an investment property is to work it backwards starting with the yield attained from rental income this will in turn give you a price at which it is viable to purchase at, it will eliminate dubiuosly discounted properties and can easily be compared against both the cost of borrowing and the interest attainable from a safe investment."

At last some sense. This is what I have been saying all along ref my credit crunch thread. IMO I didn't read your posts that way.  I find your posts too long and I loose interest half way through.  Just a suggestion could you not post a link to the article your listing, then we can decide whether to read or not, after the link you could precise the valid points you want to make.

I've never thought of myself as a Baby Boomer but I bought in the mid 70's after a lot of deliberation.  I was worried about taking out such a large debt (£11,500) but after costing I realised that I could become a home owner for the same amount each month as I was paying in rent to share a flat.  If the landlord hadn't been trying to get us out (security of tenure for furnished accomadation had recently come in) I probably would have been renting for a lot longer.

I was paying half my monthly salary in rent and the same in mortgage, gas & electric etc.  No contest really.

I sold the house 9 years later for 2 1/2 times the original purchase (couldn't work out from the graph whether that was a good deal as that wasn't the average house price then)  I moved up from a terraced to Semi Detatched at twice the price I sold for.   Bigger mortgage but by that time I had a bigger salary.  

When we finally make a decision about where we want to live we'll sell.  The plan was to move out to Spain once we were free of shared parental responsibilities (In-Laws), that happened two years ago but then we heard that my Brother in Law was terminally ill.  We've had to put things on hold as I want to be nearby should my sister need me.  Even if house prices go down then we've still made money that I could ever have saved and if we decide to downsize then the next house we buy will be less as well.

Acapulco - Prices rose in 1972, then my little terraces were going for £2k.

I would never consider myself an investor as I go for the safe options, I've only invested in the stock market once and that's when I lived and worked in Australia.  A group of us decided to buy shares in an off shore drilling company, got caught up in the hype at the time (can't remember the name of the company who were headline news) a couple of weeks later they banned off shore drilling

I watched a programme once about millionaires and the main point that came over was that most people were frightened of loosing their money.  They scrimped and watched the pennies as they didn't want to loose their status.  The only sensible one was someone who had made his money through his ability (I think he was an architect) he had a skill and said that if he lost it all he was confident he could do it again.

As for Raj, I think he will be in the same catergory as well.  He bought properties in the areas he grew up in so therefore had the knowledge of the rental return ( I don't think he sells them on but I could be wrong).  That's where people slip up as the investors in Birmingham? did.  Instead of doing the research themselves they let a company do it for them.  Got carried away with the hype of a good return on your money (rather like timeshare).  Didn't do the sums listed by "Advisor" and lost their pension investment money.

One of my school friends has three UK rental properties as her pension pot, she manages them herself and they are in a prime area.  When she advertises them for rent her phone is ringing non stop.

Our first choice for buying abroad was Florida but after careful research I realised that the management costs alone meant that I had to rent it out.  I did a costing on what it would cost to maintain the house for 2 years (my estimate on how long it might take to get it rented out) and head won over heart.  

The same applies to Spain, look for the hidden charges if you have to go down the rental route.  How will that effect the return you will get and if you have to get a mortgage to buy then don't believe the figures you are given at the beginning.  Ask for a second set at a higher rate and compare these with your own projected costings on rental return.

A bit of a long post but it's only my take of the situation.

If you bother to read to the end you'll be glad to hear that this is my last day for posting as I'm off to Sunny Spain tomorrow.  Two weeks without the internet, I'll be getting withdrawal symptons.

 Spam post or abuse? Please let us know

Blimey Semi, no internet in your Spanish hideaway?

Enjoy Spain,how could you fail

 Spam post or abuse? Please let us know

Blimey Semi, no internet in your Spanish hideaway?  I'm researching the pay as you go option, but after a couple of days I normally stop twitching.  I can normally find enough to keep me busy

Enjoy Spain,how could you fail  Thanks

 Spam post or abuse? Please let us know

Regarding Raj shysters like that are a dime a dozen in America (Canada too) they all tell you the same thing. Follow my formula and you too can be rich and wealthy, only 3 easy payments of $99.99. I've tried enough of these to know they don't work. More importantly for every self made millionaire there are  millions of us average joes who don't stand a snowballs chance in hell of becoming self-made millionaires. Why we don't' have the skills and aptitude to od it. Doesn't mean we can't be wealthy it just won't happened by starting the next Walmart. I suspect people like Raj would be success in what ever adventure they turned his minds to.

Regarding property specifically, this is the one and only point that I agree with Robert Kiyosaki of Rich Dad Poor Dad that a house is never an asset and always a liability. By that he means that it always costs you money (up keep taxes etc).  A house doesnt produce an income and thusly can't be an asset. Just ask any senior who sitting on a million pound house but is struggling to keep up with property taxes maintenance on a fixed income.

I've been reading a lot of stories of Brits who bought on the coast in the last few years and in spite of having loads of equity are in serious trouble as the housing market melts down.

Remember the old rule about property Location Location Location, well I'd add timing timing timing. Buy at the right time as semijubilada did than you will do OK, buy at the peak of the market like we did in Canada in 1986 and your in for a whole lot of hurt, took till well past 2000 before we recovered.

So why if property is such a bad investment why are we buying (hoping to buy)? Well, like Brits and Americans Canadians are homeowners at heart. Another reason is the low cost of ownership here. Comunity fee's taxes etc are very very low here. A paid for place means we can live comfortably on a partime wage.

BTW Kiyosaki made his money by selling books not by being a businessman. 

edit: as an afterthought I think generally it's a smart idea for young couples to be home owners, problem is that house prices tend to go in long waves both up and down and the real problem is do you buy into a bull market? My sister (impluse upgrade) and my neice (first time buyer 100% 35 year mortgage) both just bought at the peak of the market and are looking at some negative equity going forward.


This message was last edited by Rob in Madrid on 7/27/2008.

 Spam post or abuse? Please let us know

TJ, 

Back in Feb, your post said 'let us talk again six months later', well, now nearly six months past................. I am totally agree with Gerogia that the point is I have enjoyed my 'place in the sun' for the past a very happy few months.

Also you forgot tell Gerogia what age group you are. I start to think you are 'old and grummy', I hope I am wrong

 Spam post or abuse? Please let us know