hazellend
Member of DD Central
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SPV 39
Feb 1, 2016 18:16:37 GMT
Post by hazellend on Feb 1, 2016 18:16:37 GMT
IMO This property is overvalued, it's not being secured for much of a market discount and the area isn't good. The yields might be ok but as an investment, it falls way short. Surely as an investment it is only the yield that matters? Like undated gilts. No, it is the total return that matters. I don't really mind if that mostly comes from yield or capital gains. For properties like this one, I would have thought a much bigger discount could be achieved. Is there really much competition for these types of properties?
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j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
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Post by j on Feb 1, 2016 18:24:17 GMT
IMO This property is overvalued, it's not being secured for much of a market discount and the area isn't good. The yields might be ok but as an investment, it falls way short. Surely as an investment it is only the yield that matters? Like undated gilts. It depends if you are just happy with the yield or want some capital appreciation after a few years as well. Not familiar with H'pool myself but if it's an area that might be more succeptible in a market correction or the market becomes stagnant, you could easily lose a big chunk of that 7% pa yield when the time comes to sell
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webwiz
Posts: 1,133
Likes: 210
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SPV 39
Feb 1, 2016 19:06:51 GMT
Post by webwiz on Feb 1, 2016 19:06:51 GMT
Surely as an investment it is only the yield that matters? Like undated gilts. Depends if you plan on selling it on or not in the near future Not really. I don't intend to live in it myself and if it is sold the buyer will not live in it himself, so the normal way to value it will be to capitalise the income stream.
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SPV 39
Feb 1, 2016 19:39:33 GMT
Post by Financial Thing on Feb 1, 2016 19:39:33 GMT
IMO This property is overvalued, it's not being secured for much of a market discount and the area isn't good. The yields might be ok but as an investment, it falls way short. Surely as an investment it is only the yield that matters? Like undated gilts. I'm not sold on HMO's as I think they will run into troubled waters regarding valuations. I think when they do, the properties that are being valued on HMO basis will fall in value, so if the property is sold in a couple of years, it's likely to be worth much less than current valuation. Plus PM has had some issues with previous HMO investments. Landlording an HMO is difficult at the easiest of times so yields are really an estimate.
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webwiz
Posts: 1,133
Likes: 210
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SPV 39
Feb 1, 2016 21:16:54 GMT
Post by webwiz on Feb 1, 2016 21:16:54 GMT
Surely as an investment it is only the yield that matters? Like undated gilts. I'm not sold on HMO's as I think they will run into troubled waters regarding valuations. I think when they do, the properties that are being valued on HMO basis will fall in value, so if the property is sold in a couple of years, it's likely to be worth much less than current valuation. Plus PM has had some issues with previous HMO investments. Landlording an HMO is difficult at the easiest of times so yields are really an estimate. If the property is sold in 3 years time the value (based on income capitalisation) will depend on the rents then being paid (and the certainty of them being paid) and general interest rates at the time. I agree with your last sentence. If you don't like the deal then you don't have to invest in it.
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ben
Posts: 2,020
Likes: 589
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SPV 39
Feb 5, 2016 14:53:03 GMT
Post by ben on Feb 5, 2016 14:53:03 GMT
Reduction in price of this one and underwritten rent makes it look a lot better so will probably put my few pence into this one too espeically as PP has not had anything that exciting lately
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Steerpike
Member of DD Central
Posts: 1,977
Likes: 1,687
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SPV 39
Feb 5, 2016 17:33:30 GMT
Post by Steerpike on Feb 5, 2016 17:33:30 GMT
This property consists of 4 self contained flats and therefore as I understand the term this does not qualify as a HMO.
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ben
Posts: 2,020
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SPV 39
Feb 5, 2016 17:51:38 GMT
Post by ben on Feb 5, 2016 17:51:38 GMT
This property consists of 4 self contained flats and therefore as I understand the term this does not qualify as a HMO. It is not a HMO and unless I misread it does not state it is
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Steerpike
Member of DD Central
Posts: 1,977
Likes: 1,687
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SPV 39
Feb 5, 2016 18:14:16 GMT
Post by Steerpike on Feb 5, 2016 18:14:16 GMT
This property consists of 4 self contained flats and therefore as I understand the term this does not qualify as a HMO. It is not a HMO and unless I misread it does not state it is Quite, however, much of the discussion has been on the topic of HMO and might have wrongly given the impression that the exchanges were referring to the subject of this thread.
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ben
Posts: 2,020
Likes: 589
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SPV 39
Feb 16, 2016 13:54:27 GMT
Post by ben on Feb 16, 2016 13:54:27 GMT
at what point do they give up and decide they will not fund, been a few weeks and only just past half way
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webwiz
Posts: 1,133
Likes: 210
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SPV 39
Feb 17, 2016 17:19:22 GMT
Post by webwiz on Feb 17, 2016 17:19:22 GMT
at what point do they give up and decide they will not fund, been a few weeks and only just past half way It is costing them a lot in interest payments.
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ben
Posts: 2,020
Likes: 589
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SPV 39
Feb 17, 2016 20:14:17 GMT
Post by ben on Feb 17, 2016 20:14:17 GMT
exactly seems pointless keeping it going they will be better cancelling it and cutting losses on it
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webwiz
Posts: 1,133
Likes: 210
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SPV 39
Feb 18, 2016 13:17:12 GMT
Post by webwiz on Feb 18, 2016 13:17:12 GMT
at what point do they give up and decide they will not fund, been a few weeks and only just past half way It is costing them a lot in interest payments. Having said that, has anyone actually observed the interest being "paid" (as a reduction of management fee)? It is difficult to untangle the forest of figures, but on some of my properties the full 12% was deducted from the first month's rent.
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ben
Posts: 2,020
Likes: 589
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SPV 39
Feb 19, 2016 8:36:11 GMT
Post by ben on Feb 19, 2016 8:36:11 GMT
I think they use the management fee to pay the 3%
They are going to have to either cancel these two or do a similar PP offer to clear these two, although not sure if there fees would be able to afford that upfront as PP has the 2% investment cost they can use to fund that
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SPV 39
Feb 19, 2016 8:58:16 GMT
Post by highlandtiger on Feb 19, 2016 8:58:16 GMT
I'm starting to wonder if the slow down in the take up of properties with both PM and PP , (not sure if a similar thing is happening with HC), are due to people being maxed out on these sort of investments. With only a few thousand people currently investing in these companies, it doesn't take much to slow things down if these people run out of investable cash.
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