Steerpike
Member of DD Central
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Post by Steerpike on Feb 5, 2018 17:54:43 GMT
My personal experience of BTL is that some effort is required and one can reasonably expect a rental return of 3% to 4% and capital appreciation of 1% to 6% leading to annual returns of 4% to 10%.
One might think that a professional team can do much better at buying, managing, and maintaining properties and so it would seem reasonable that, after they have had their well deserved cut, one might see returns averaging 6% to 7% per annum but without the effort and aggravation of administering the properties.
If one sees extended voids, repeated frequent apparently unexpected costs, and often capital depreciation one might reasonably question the performance of the "professional team".
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jnm21
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Post by jnm21 on Feb 5, 2018 21:15:16 GMT
My personal experience of BTL is that some effort is required and one can reasonably expect a rental return of 3% to 4% and capital appreciation of 1% to 6% leading to annual returns of 4% to 10%. One might think that a professional team can do much better at buying, managing, and maintaining properties and so it would seem reasonable that, after they have had their well deserved cut, one might see returns averaging 6% to 7% per annum but without the effort and aggravation of administering the properties. If one sees extended voids, repeated frequent apparently unexpected costs, and often capital depreciation one might reasonably question the performance of the "professional team". Spot on sir!
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Post by sayyestocress on Feb 6, 2018 6:28:10 GMT
i'm "new" compared to some people to p2p but i think a lot of people view buy-to-let/ equities the wrong way. i think people should almost view it as expendable, like going to the shop and spending £10 on a DVD, except that DVD is a share in a house somewhere in Bolton or Oldham wherever. Not so far as you write off every £10 you spend, but don't expect to be able to say "right i want my £10 back now". You'll likely earn something on it, requires very little management, if any at all. Obviously some are better than others, but you won't miss not having that £10 in your account and you likely won't need that £10 again. I suppose it also comes down to that saying "don't gamble what you can't afford to lose" And yet an average dvd bought in the early noughtiess is currently worth very little, yet a typical home bought at the same time is worth significantly more than what was paid for it. I suspect I won't get a return on my commando dvd, but my house is worth almost double (on paper anyway). I agree with your last statement but I don't like the analogy if you haven't guessed 😃
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damar
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Post by damar on Feb 6, 2018 7:14:27 GMT
I suppose it also comes down to that saying "don't gamble what you can't afford to lose" I thought it was don't invest what you can't afford to lose, but in PM's case, gamble is definitely the right word.......................
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benaj
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Post by benaj on Feb 6, 2018 11:00:09 GMT
What you are saying is Property Moose have advertised this as an investment with words such as investment, earn, growth plastered on the front page and invest online, unique investment opportunities, income, capital growth and interest on the how it works page but in reality its just the same as going to the bookmakers and placing a 5/1 bet on the 3.30 at Kempton? Today, I received a email from Property moose telling how great it is to invest for the long term and my retirement. Just have a look on the PM front page yourself. Everything looks so easy on paper:- "We’ve made it simple": Browse, invest, earn exit"More reasons to love property moose": Invest £10 or £500,000+, New opportunities to invest, No hidden costs, You're in control
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jnm21
Posts: 441
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Post by jnm21 on Feb 6, 2018 13:53:21 GMT
i'm "new" compared to some people to p2p but i think a lot of people view buy-to-let/ equities the wrong way. i think people should almost view it as expendable, like going to the shop and spending £10 on a DVD, except that DVD is a share in a house somewhere in Bolton or Oldham wherever. Not so far as you write off every £10 you spend, but don't expect to be able to say "right i want my £10 back now". You'll likely earn something on it, requires very little management, if any at all. Obviously some are better than others, but you won't miss not having that £10 in your account and you likely won't need that £10 again. I suppose it also comes down to that saying "don't gamble what you can't afford to lose" I might agree, if you were not, em, wrong. If I gamble £10 I expect to get £15-£500+ back if I win. The returns on PM BTL are at best £11 or £12 back (not a bad return on an investment, just not good on a win or lose all gamble). If I go in and the bookie says you should have a go at these half dozen 10/1 on shots that are all hot favourites, then I find when i come back the next day not one winner, maybe 3 well beaten & 3 non-finishers, I'd be pretty p***** off & might even suggest that the bookie wasn't very good at their job. Now imagine all six win & the bookie says that 3 had rule 728 deduction, so instead of £11 back I'll be getting £8.50. 1 actually was better odds & I'm getting £11.50 for that & the other 2 something went wrong & I'm getting just my £10 back, but it could be in six to twelve months time. I wouldn't exactly be saying thank you! There are more issues, but I'll highlight just 1 more with betting analogy. Say you go with a bet on football with a bookie who offers a sell out feature, but half way through the first half the sell out option disappears for your match. They finally announce at half time they are reviewing their pricing to ensure that you get the most up to date value & it will be back soon, but they can't say when. Not going to be popular! You compare PM to gambling, where as I would say that bricks & mortar should be a fairly safe investment - it has to be to make it attractive - with less than 10% realistic potential return annually & a much lower actual return, if it is not relatively safe, it is going to be unattractive, hence the numbers here saying I'm out! On any of the figures that I have seen before, I would not touch a PM BTL again & if I saw figures that tempted me, I would query if they were correct first. With the returns most folk are reporting on PM BTL, I think one must ask if fixed rate savings are not a better bet - NS&I offers a 3 year bond at 2.2% with both returns & liquidity (for 90 days loss of interest) guaranteed by the British Government. That comes with no need to play amateur PI to see if PM visibly messed up the figures on a monthly basis (which is no small task on a diversified PM investment).
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