news & politics:discussion

[mattiloy]

6 hours ago, cellar said:

I think he said property value was £90k when bought, and £240/£260k now. 

But if the deposit (£20k) was all he ever paid himself, then it is a better ROI than you'd get from any fund that I can think of, even with the cost of the loan (I assume about £25k on average over the last 20 years). 

But that is kind of the sh*tty part of BTL, and what sets it apart from other types of investments, is that you're using someone else's money to invest for you. Even if that £90k house suddenly dropped to £40k, and the above assumption is true, its still 100% profit in real terms for the landlord, and the renters money has absorbed the £50k shock. (Actually realised this isn't true as forgot to factor in the cost of the loan - but still, its only a £5k loss compared to what would have been a £75k loss).

So s&p 500 has delivered about 10% annual growth in the same period. This gives 240k off the initial 20k investment without any additional contribution.

So roughly equivalent (if the claim that rent has only covered mortgage repayments is to be believed). Less maintenance costs, time and energy, and the fact that again, you’re holding all your dough in one illiquid asset at a time when the price of that asset is at best going to stagnate in the next decade, and worse case devalue (and be a big faff to sell, possibly with additional taxes) - there is a clear winner.

Edited January 19 by mattiloy

[mattiloy]

3 hours ago, steviewevie said:

 

About f**king time. Not sure if the crumbs dropping from the table are so sparse that I’m imagining it, but I want to believe that it sounds like there is emotion in his voice here. Like its what he really thought all along. One can only hope. That being one of the world’s biggest c**ts is just an act and behind it lies a heart of gold, as his supporters would have us believe. I guess we’ll find out .

Edited January 19 by mattiloy

[Neil]

34 minutes ago, kaosmark2 said:

I'm not denying that nationalised infrastructure and monopolies aren't open to corruption, abuse, and government mismanagement. I'm just saying that if you have a natural monopoly, members of the public don't ever see benefits of privatisation.

I'm pointing out that the supposed benefits of nationalisation tend to be lied about or misrepresented.

Smart members of the public always knew there weren't benefits from privatisation.the only one was the tory bribe same as selling off council houses.

[mattiloy]

4 hours ago, kaosmark2 said:

Railways, buses, and utility provision all make sense to me to be nationalised. They naturally have a monopoly anyway because of the infrastructure requirements so the general public can't ever get the "benefits" of privatisation/capitalism for them.

Yes. Thats the thing.

If you buy a bic pen, and you get home and within 2 minutes of writing your bic pen bursts, you have both the right of refund and the choice to buy a different pen next time.

If you’re commuting and your northern rail train arrives 20 minutes late you get neither refund nor can you take a different train tomorrow.

Requiring the building of a whole new competing infrastructure, the barriers to entry are enormous and could only ever be paid for by the govt, as indeed the existing infrastructure was. So its a permanent monopoly. The normal market mechanism of consumer choice -> efficiency is broken. So the choice is only do we run this monopoly for profit, or for the public good.

Even if you set it up as a solely profit seeking company but owned by the state, whilst it would be as sh*t as it is today, at least the dividends would go back to the treasury. As it is, its both sh*t, and all the profits it makes end up in the pockets of shareholders. In many cases these are overseas nationalised companies. So your excess fares are directly subsidising the low fares in Germany for instance (arriva).

Edited January 19 by mattiloy

[cellar]

37 minutes ago, mattiloy said:

So s&p 500 has delivered about 10% annual growth in the same period. This gives 240k off the initial 20k investment without any additional contribution.

I would personally prefer investing in funds, but I don't think this is correct. Will do the maths properly later on, but off the top of my head it's not even anywhere near 200k.

[mattiloy]

17 minutes ago, cellar said:

I would personally prefer investing in funds, but I don't think this is correct. Will do the maths properly later on, but off the top of my head it's not even anywhere near 200k.

It is. I googled and found the last 20 years s&p 500 growth rate at 10.6% interest compounded annually. Stick 20k initial with zero additional contributions into a compound interest calculator on a 25 year term and see what you get.

Edited January 19 by mattiloy

[mattiloy]

The thing is. As an asset class, the housing market has benefitted enormously from low interest rates the last few decades. But so has the stock market. And unlike a house funds are low maintenance and diversified. If you’re unlucky, your house can literally fall down. Its honestly a no brainer.

Edited January 19 by mattiloy

[mattiloy]

And you never have to admit you are, or have been, a landlord.

[Neil]

21 minutes ago, mattiloy said:

Yes. Thats the thing.

If you buy a bic pen, and you get home and within 2 minutes of writing your bic pen bursts, you have both the right of refund and the choice to buy a different pen next time.

If you’re commuting and your northern rail train arrives 20 minutes late you get neither refund nor can you take a different train tomorrow.

Requiring the building of a whole new competing infrastructure, the barriers to entry are enormous and could only ever be paid for by the govt, as indeed the existing infrastructure was. So its a permanent monopoly. The normal market mechanism of consumer choice -> efficiency is broken. So the choice is only do we run this monopoly for profit, or for the public good.

Even if you set it up as a solely profit seeking company but owned by the state, whilst it would be as sh*t as it is today, at least the dividends would go back to the treasury. As it is, its both sh*t, and all the profits it makes end up in the pockets of shareholders. In many cases these are overseas nationalised companies. So your excess fares are directly subsidising the low fares in Germany for instance (arriva).

i was right about someone coming along to re-write history.

Edited January 19 by Neil

[Neil]

20 minutes ago, mattiloy said:

the dividends would go back to the treasury. As it is, its both sh*t, and all the profits it makes end up in the pockets of shareholders.

spot the difference?

does the company have that profit to invest?

[Neil]

3 minutes ago, mattiloy said:

And you never have to admit you are, or have been, a landlord.

you protest too much and even with you in Sweden i can feel your need to hide your own renterism

[mattiloy]

11 minutes ago, Neil said:

spot the difference?

does the company have that profit to invest?

 

Do you honestly believe that the likes of Arriva - wholly owned by deutsche bahn - or Thames water - biggest shareholder a canadian pension fund - are investing more of their profits back into their uk businesses or the wider economy than the state?

I’m trying to avoid personal insults this time but my goodness you are making it difficult.

Edited January 19 by mattiloy

[cellar]

18 minutes ago, mattiloy said:

It is. I googled and found the last 20 years s&p 500 growth rate at 10.6% interest compounded annually. Stick 20k initial with zero additional contributions into a compound interest calculator on a 25 year term and see what you get.

Ah yeah, that's where the difference is - the time period was 20 years.

[mattiloy]

11 minutes ago, Neil said:

spot the difference?

does the company have that profit to invest?

Would be a fine thing if I could. Unfortunately the history we’ve inherited has already been written by a bunch of bitter, selfish, economically illiterate chumps.

[Neil]

5 minutes ago, mattiloy said:

 

Do you honestly believe that the likes of Arriva - a wholly owned by deutsche bahn - or Thames water - biggest shareholder a canadian pension fund - are investing more of their profits back into their uk businesses or the wider economy than the state?

I’m trying to avoid personal insults this time but my goodness you are making it difficult.

so instead you make up some bullshit that i didn't say or suggest.

i simply pointed out that if the profits are taken away by the owner (private or state) the company is left with no profits to invest back into the business.

[cellar]

2 minutes ago, cellar said:

Ah yeah, that's where the difference is - the time period was 20 years.

Well, that and you said 10% originally!

But either way, I think the key difference is the level of risk. There is little to no risk in BTL if your rental income covers the cost of your mortgage entirely.

I feel like we agree anyway - I presume we do if you are as left as people think you are 🙂

[mattiloy]

14 minutes ago, cellar said:

Well, that and you said 10% originally!

But either way, I think the key difference is the level of risk. There is little to no risk in BTL if your rental income covers the cost of your mortgage entirely.

I feel like we agree anyway - I presume we do if you are as left as people think you are 🙂

 

He said he had the house 25 years in a previous post so thats what I used as the term. Then yeah I was vague with the exact % but I didnt expect so much scrutiny ☺️.

The risk is small, but your exposure is 100%. If your one asset goes bad, your whole retirement is f**ked. If some companies in your fund go bad, you’re still getting 10 odd % a year. Thats the difference. It is good fortune alone that has rewarded B2L landlords in the 21st century, nobody could have foreseen such a prolonged housing bubble. But that fortune is on the wane. House prices have underperformed vs the market in recent years and are forecast to underperform vs the market in the mid term.

Just on the financials it doesnt make sense. But we agree I think that on top of that landlordism is grotesque.

Overall, if your financial advisor at any point said put all your money into B2L - you’d be best off getting a new financial advisor.

The poster is lucky not to be much out of pocket if at all in monetary terms but if you billed all the hours spent managing the property, maintenance and the eventual costs associated with liquidating the assets, I think funds wins all day. And again, you dont have to live with being a landlord.

Edited January 19 by mattiloy

[mattiloy]

20 minutes ago, Neil said:

so instead you make up some bullshit that i didn't say or suggest.

i simply pointed out that if the profits are taken away by the owner (private or state) the company is left with no profits to invest back into the business.

Right, so there is no difference in those profits going to the treasury or to a canadian pension fund? Or whats your point?

[Neil]

3 minutes ago, mattiloy said:

Right, so there is no difference in those profits going to the treasury or to a canadian pension fund? Or whats your point?

what's your point?, run your northern trains example thru your question and ask yourself is your train more likely to run on time if managed by efficient German train experts or by failing grailing?

[Neil]

12 minutes ago, mattiloy said:

I think funds wins all day. And again, you dont have to live with being a landlord.

you need to learn to recognise an exploitative relationship, mr left-wing banker.

[mattiloy]

3 minutes ago, Neil said:

what's your point?, run your northern trains example thru your question and ask yourself is your train more likely to run on time if managed by efficient German train experts or by failing grailing?

 Chris Grayling isnt the transport secretary anymore. Northern rail was taken over by the govt last year because arriva was too sh*t.

The transport secretary is not involved in the operations of the rail companies. Be they nationalised or not.

Why would a nationalised german rail company be more efficient than a british one?

To paraphrase nick cave: I’m forever reading this forum thinking, what the f**k is this garbage? And the answer is always.. Neil.

[Neil]

8 minutes ago, mattiloy said:

 Chris Grayling isnt the transport secretary anymore. Northern rail was taken over by the govt last year because arriva was too sh*t.

The transport secretary is not involved in the operations of the rail companies. Be they nationalised or not.

Why would a nationalised german rail company be more efficient than a british one?

To paraphrase nick cave: I’m forever reading this forum thinking, what the f**k is this garbage? And the answer is always.. Neil.

I was just pointing out that politicians trying to do stuff they don't have the experience for is not necessarily a good thing.

The biggest crime of rail privatisation was the loss of experience and expertise.its not necessarily a bad thing if we are now buying it in.

I was considering the recent comments here about landlordism. And is there a social good from It or is it always a bad thing? I thought back and compared things to now. I never used to rent thru letting agents. Always heard of a place going on the grapevine. Invariably landlord was a very normal geezer living close by in similar housing and the whole thing more casual and cosy. These tended to be the best landlords I had.

Do we risk scaring those types out of the market.  Landlords or not its about who delivers the resources like most economic questions.

[mattiloy]

40 minutes ago, Neil said:

I was just pointing out that politicians trying to do stuff they don't have the experience for is not necessarily a good thing.

The biggest crime of rail privatisation was the loss of experience and expertise.its not necessarily a bad thing if we are now buying it in.

I was considering the recent comments here about landlordism. And is there a social good from It or is it always a bad thing? I thought back and compared things to now. I never used to rent thru letting agents. Always heard of a place going on the grapevine. Invariably landlord was a very normal geezer living close by in similar housing and the whole thing more casual and cosy. These tended to be the best landlords I had.

Do we risk scaring those types out of the market.  Landlords or not its about who delivers the resources like most economic questions.

Landlordism is a problem not because of individual landlords but because of the way that it diminishes housing supply which ends up driving up both house prices for purchasers, and somewhat paradoxically eventually rents:

As a fairly stable long term trend of demand outstripping supply becomes apparent, manifested in increasing prices, it becomes more attractive to new BTL landlords - but the property prices have already gone up and therefore they need to charge higher rents to achieve the same yield that covers their mortgage costs - and then they too take another potential first time buyer home off the market (BTL properties are overwhelming those that would otherwise be first time buyer properties). This restricts supply further which puts property prices up which attracts new BTL guys, who pay the new price and get an even bigger mortgage with even bigger costs to cover etc etc etc

This grim spiral is only true in a system where new housing stock is inadequate to bridge the initial supply gap (as in much of the uk). In a system where new housing stock is adequate, the initial trend would never have been established, so the expectation of never ending house price rises would not be there and there would not have been a big BTL craze.

Edited January 19 by mattiloy

[steviewevie]

Didn't social housing just get replaced by private landlords?

[kaosmark2]

19 minutes ago, steviewevie said:

Didn't social housing just get replaced by private landlords?

"We provide housing"