Are landlords selling up?/asking prices not met.

Bluehair

Culchie wrote:

Yes, great quote, and as a poker player, am well aware of results orientated thinking....however it bears no relevance to my point.

I don't think you read my contributions to this thread very closely to see what angle I am coming from.

I've been following on and off but slowly losing interest since it seems neither side can pursuade the other as to the merits (or otherwise ) of their arguement.

However while you've been focusing on Investment Property the original arguement was based around the wisdom of borrowing in order to invest, a whole different ball game.

As fellow poker player myself (very amateur though) I'm sure you appreciate the risk/reward relationship. It's my opinion that the potential downside for such investments vastly outweighs potential gains. If it goes well grand but if it goes badly you're screwed. I'll happily taken medium to large risk on various types of investments if the potential reward could make it pay off. I'll also accept that I could lose it all, unlikely, but there's no way to be sure.

What I won't do is borrow money and then put that somewhere where there is even a marginal uncertainty about my return.

garred

Culchie, agree with you 100%. Can I ask the others on this issue:

Would you not borrow to pay for an investment that is giving you a guaranteed rental return. With this rental return and doing facts & figures you:

1. Make a net profit each year.

2. Your principle loan is being paid off.

3. The possibility that the house price may go up based on growth figures for the last 5 years.

Even if no. 3 did not materialise, are you saying that this is still a bad investment?

Also a note. All previous posters seem to be under the illusion that the equity will be used against their family/own homes. Not necessarily the case as it can be used against an investment property here that you are making a profit after costs/tax.

Zaph0d

garred wrote:

Culchie, agree with you 100%. Can I ask the others on this issue:

Would you not borrow to pay for an investment that is giving you a guaranteed rental return. With this rental return and doing facts & figures you:

1. Make a net profit each year.

2. Your principle loan is being paid off.

3. The possibility that the house price may go up based on growth figures for the last 5 years.

Even if no. 3 did not materialise, are you saying that this is still a bad investment?

Also a note. All previous posters seem to be under the illusion that the equity will be used against their family/own homes. Not necessarily the case as it can be used against an investment property here that you are making a profit after costs/tax.

Yes if I thought I could really get a euro investment to pay 10% guaranteed I would pour a load of money in even money borrowed @3.5%. But it sounds too good to be true. Good luck with it and I could well be wrong.

RainyDay

garred wrote:

Would you not borrow to pay for an investment that is giving you a guaranteed rental return. With this rental return and doing facts & figures you:

1. Make a net profit each year.

2. Your principle loan is being paid off.

3. The possibility that the house price may go up based on growth figures for the last 5 years.

Even if no. 3 did not materialise, are you saying that this is still a bad investment?

There is a very reliable principle of evaluating investments that says 'if it seems too good to be true, then it probably is'.

Who is going to fund the 'guaranteed rent'? Who is going to pay the investor when there are no tenants to be found for the property? What happens when the guarantor goes bust? What is the tax impact (income tax & CGT) for the Irish investor? What happens when the property actually decreases in value? What happens when the local currency gets devalued?

MorningStar

Culchie wrote:

Yes, great quote, and as a poker player, am well aware of results orientated thinking....however it bears no relevance to my point.

I don't think you read my contributions to this thread very closely to see what angle I am coming from.

Why not relevance? There are people who have made incredibly risky or "stupid" risks and made a profit. You said it was hardly stupid based on the profit they made. Profit is not an indicator so provide other reasons why it's not stupid.

I didn't read everything you said but you also accused me of views I have never voiced so it is a bit much to get your back up so quickly.

Overseas investement is alot more risky than people think. You have no political control in the other country for starters. In Spain many building have been knocked down or compulsory purchased by the state. Political unrest that you are unaware of can cause sudden drops. The Kusadasy (sp) property was all over the radio as a good investment but now an Irish person has been killed there the market prices dropped and will probably take a decade or two to get rid of that view of danger. If locals can't get housing or dislike Ireland in the sun they may suddenly add taxes or rules very unfavourable to the investor

It is also a bit silly to lump all property investment together. If you bought a n appartment in Ashbourne to rent and one in the city centre. When the market stabalises the city centre one will rent a lot more quickly and constantly. It not certain but it's reduced risk.