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Rather than focussing on exact numbers, I think the OP was merely trying to open a line of thinking to consider.
If waiting for a crash to happen before buying a property, one may want to factor in the opportunity cost of not investing now, namely a loss of rental income and potential appreciation.
Thanks Chef D, I did try to keep it as simple as possible!
Ok so we pluck figures out of the air and try to make them work? LOL whats the point of that when no one knows what they are.
I think the best way to achieve what you're after is to do some historical research, taking the lowest point of a house price graph and seeing how long it took to recover, and factor in rental prices and interest rates along the same timeline.
May as well have a discussion on next weeks lottery numbers if you're going to ignore the expenses involved though.
yes HMOS in Manchester
The original figures don't allow for servicing the debt. This could include interest payments, mortgage arrangement fees and maybe one or more broker fees during the three year period.
The original figures don't allow for managing tenancy. If using an agent that needs to come off of the bottom line. If self managing, are you allowing anything for your time for the x number of years you'd be managing for? I don't work for free.
The original figures don't allow for maintaining the property or other bills associated with owning a property - new fences, insurance, gas certs, boiler cover etc.
The original figures don't allow for void periods and seem to assume 100% occupancy with no void periods or losses due to arrears etc.
You do like to nit-pick don't you!
The whole point was to try and keep the figures as simple as possible!
the loss of potential gain from other alternatives when one alternative is chosen.
"idle cash balances represent an opportunity cost in terms of lost interest"
The OP is merely discussing, from a holistic level, the opportunity cost of not investing until a crash vs investing now. A fairly basic analysis to do based on ones personal circumstances AND own opinions on market direction.
Chef D, thank you, but unfortunately I've found there's no point bothering with the likes of Bean1 and Essex-LL.Bean1 is basically a troll - 3 Topics created in nearly 3 years and only 1 of them had an answer!And Essex-LL has a long history of not agreeing with others.
A good cross-section of UK LL's right here ;->
Haha, I've just been lambasted by Mr Popular. Congrats on your assumptions and conclusions, hope they work out well for you.
Don't worry I'll never comment on one of your posts again, Jesus.
" Don't worry I'll never comment on one of your posts again... "
Sounds absolutely perfect to me