Rental yield and property value

handlemaster

http://www.independent.ie/business/personal-finance/property-mortgages/when-it-comes-to-bidding-how-much-is-too-much-34491287.html



Do people actually use this when buying a home ? I would think investors would look at this but most potential home owners seem to just look at the price in the area for that particular property

PhoenixParker

Yes. I certainly looked at what comparable properties rent for in my location and compared that to the cost of a mortgage + costs of home ownership before choosing to buy.

It's a huge consideration for the reduction of risk.

handlemaster

PhoenixParker wrote: »

Yes. I certainly looked at what comparable properties rent for in my location and compared that to the cost of a mortgage + costs of home ownership before choosing to buy.

It's a huge consideration for the reduction of risk.

if you look at what people say on boards about buying its never mentioned

newacc2015

I think a more important factor is whether the area will appreciate in value. Some people have a small fortune in NYC by buying former warehouses in places like Willamsburg or Bushwich. Some apartments purchased have gone up 5/6 times in value in about 15 years

http://www.dailymail.co.uk/news/article-2513551/Lena-Dunhams-family-apartment-hits-market-6-25m.html

Buying a house in a rapidly gentrifying area would be more important to be than a rental yield that wont increase as much. I imagine you do well buying in the Liberites or on the NCR over the next 15/20 years

johnnyskeleton

handlemaster wrote: »

http://www.independent.ie/business/personal-finance/property-mortgages/when-it-comes-to-bidding-how-much-is-too-much-34491287.html



Do people actually use this when buying a home ? I would think investors would look at this but most potential home owners seem to just look at the price in the area for that particular property

Yes. I was renting in the same area, did the sums, and when rents went up by 60% in a few years it made more sense to buy.

It gives me some comfort that if I had to sell or rent out the price was at least linked to the utility value i.e. some people were prepared to pay €X per month to live there. Rents are a more accurate relfection of value than what people can borrow to buy a place.

handlemaster

newacc2015 wrote: »

I think a more important factor is whether the area will appreciate in value. Some people have a small fortune in NYC by buying former warehouses in places like Willamsburg or Bushwich. Some apartments purchased have gone up 5/6 times in value in about 15 years

http://www.dailymail.co.uk/news/article-2513551/Lena-Dunhams-family-apartment-hits-market-6-25m.html

Buying a house in a rapidly gentrifying area would be more important to be than a rental yield that wont increase as much. I imagine you do well buying in the Liberites or on the NCR over the next 15/20 years

Add your reply here.


That area didnt do much during yen years of boom why would it happen now ?

jeamimus

handlemaster wrote: »

http://www.independent.ie/business/personal-finance/property-mortgages/when-it-comes-to-bidding-how-much-is-too-much-34491287.html



Do people actually use this when buying a home ?

They don't if they are buying a family home. They do if they believe it might get let out at some stage in the future.