Harming children for no good reason

[SirGalahad]

Yes, because running a full-time buildings service dept is more expensive than hiring someone as and when you need them. Also, because the dept is publicly run, it will be more profligate with its own (tax money) budget. In general.

But the service dept is managing more homes, so will benefit from economies of scale. You also have not factored in cost of arranging the tradesman, payment etc, which all form part of the transaction.

 

[SirGalahad]

What are your thought on 'ghettoization' of what becomes the "poor kids from the council estate".

Whats the relevance of this to the discussion? Not sure where you are going.

 

[Doggit]

Returns have fallen but not if you are a small landlord with a few properties who is on the lookout for a rundown property to repair or one who has lots and can raise finance cheaper.

Now I thought you were supposed to be good at economics Kank. Purchase price of a 2 bed flat in my area is average £105K. Gross rent of £6600, and after general costs, service charges and repairs, say £5900 - and that'd be good. So 5900 divided by 105000 gives a return on investment of 5.6%, and that assumes no finance needed.

The guy next door to me bought his 1 bed flat at auction after a fire, and after repairs, it cost him £70K. He'll possibly get £475 per month, but after management fees, and service charge, he reckons that he'll clear about £4500 pa, so that gives a return of 6.4%. The upside was that the flats been valued at £95K, so a return of £25K before tax and charges for 5 months work.

So what are the prices and rents in your area then.

 

[SirGalahad]

Now I thought you were supposed to be good at economics Kank. Purchase price of a 2 bed flat in my area is average £105K. Gross rent of £6600, and after general costs, service charges and repairs, say £5900 - and that'd be good. So 5900 divided by 105000 gives a return on investment of 5.6%, and that assumes no finance needed.

The guy next door to me bought his 1 bed flat at auction after a fire, and after repairs, it cost him £70K. He'll possibly get £475 per month, but after management fees, and service charge, he reckons that he'll clear about £4500 pa, so that gives a return of 6.4%. The upside was that the flats been valued at £95K, so a return of £25K before tax and charges for 5 months work.

So what are the prices and rents in your area then.

Spread your wings. Go into larger towns. I can see at auction a 2 bed decent back to back listed at £50k which when fixed up for about £5-8k would fetch about £500-£550 with management fees of 7%. Which would still give more than 6%. Sure times are not what they used to be but as I said if you really look around you can find an odd bargain.

 

[Doggit]

As the prices quoted in auction catalogues bear no relationship to the price they finally go for, I still think my figures will be closer to reality than yours.

But a link to that site wuld be appreicated.

 

[Brigade77]

Now I thought you were supposed to be good at economics Kank. Purchase price of a 2 bed flat in my area is average £105K. Gross rent of £6600, and after general costs, service charges and repairs, say £5900 - and that'd be good. So 5900 divided by 105000 gives a return on investment of 5.6%, and that assumes no finance needed.

The guy next door to me bought his 1 bed flat at auction after a fire, and after repairs, it cost him £70K. He'll possibly get £475 per month, but after management fees, and service charge, he reckons that he'll clear about £4500 pa, so that gives a return of 6.4%. The upside was that the flats been valued at £95K, so a return of £25K before tax and charges for 5 months work.

So what are the prices and rents in your area then.

The ROI on buy to let is generally considered to be around 9% by even the most stupid of economists.

I'm out of it now but in 2010 I used to invest £30k max per bed in HMO's for an average rent of £80pw. If you want to do the math yourself it's easy . . . but remember to include everything & not just the simple figures.

 

[EFLImpudence]

As the prices quoted in auction catalogues bear no relationship to the price they finally go for, I still think my figures will be closer to reality than yours.

Agreed. They are just a ploy to get you to the auction.

 

[JohnD]

Purchase price of a 2 bed flat in my area is average £105K. Gross rent of £6600, and after general costs, service charges and repairs, say £5900 - and that'd be good. So 5900 divided by 105000 gives a return on investment of 5.6%, and that assumes no finance needed.

I'm puzzled that your business plan assumes no capital growth.

Do you seriously believe that the price you buy a home for today will be the same price that you sell it for in 30 years? And that the rent would stay the same? If so, you should invest more wisely.

You didn't omit it deliberately, surely?

 

[Doggit]

The ROI on buy to let is generally considered to be around 9% by even the most stupid of economists.

HMOs were always the best return, and the biggest hassle, and when I bought my properties, the ROI was 17% on flats, but I'm talking about the current issues are, not what stupid economists think.

I'm puzzled that your business plan assumes no capital growth.

Try reading post #237. We've moved on since then.

 

[JohnD]

that makes it even worse.

You don't understand that capital growth is part of RoI.

 

[Gerrydelasel]

But the service dept is managing more homes, so will benefit from economies of scale. You also have not factored in cost of arranging the tradesman, payment etc, which all form part of the transaction.

More homes than private contractors? Seems unlikely. There are few economies of scale to be had here. More like administration costs of paying wages (with healthy public pensions and benefits), keeping tools, vehicles on the road, liability insurance etc