Welcome to the CUK Dragon's Den

[sasguru]

Sas, I don't think you understand statistical modelling. You may claim to, but you don't. All the long term real house price trend displays is a definedfigure on long term analysis of the market. It does not give you a true indication of a percentage increase unless you bought the property when the long term real house price trend intersected the average house price and you sold when the long term real house price trend intersected the average house price. If I bought a house in 1995 and sold it in 2005 I would have made a return that is not current with the long term real house price trend. If I bought a house in 1980 and sold it in 1987 then I most probably would have got a return as predicted by the long term trend. It is a good indicator of what I should expect to achieve, but will most probably not be anywhere near.

DP described it beautifully with his squiggly line theory. You just talk crap. Perhaps I would have phrased it better by stating that my portfolio has shown an average increase of 100% over 8 years however, that figure will most likely decrease with the current market but will recover and I still expect to have made 300% by the time I sell which will be circa 2016-2020 for my current portfolio dependant on the market.

You’ll forgive me if I’m a bit wary when you start quoting numbers.

http://forums.contractoruk.com/617993-post27.html

I've had a look at that link and yes I made a mistake. Perhaps because I automatically assume nowadays that most people are innumerate.

Actually I do stats (and other related stuff) for a living.

So to summarise your post above, you're saying that your returns depend on when you buy and sell. What do you think I'm saying?

There are 3 things wrongs with your earlier posts:

1. You confused absolute and real values.
2. Your maths on interest payments seems shaky to say the least. You claimed originally that it makes no difference to buy now or 3 years hence. It will make an enormous amount of difference in total interest paid if you keep your properties for 25 years.
3. You used the word average which is what the straight line in the graph shows. The average rise is 2.8% per annum in real terms.

Let's let the objective reader judge who is or is not talking sense in this thread, eh?
.

[Board Game Geek]

blah blah blah house prices blah blah blah

<eyes glaze over>

Heads : Sometimes investments make you money.
Tails : Sometimes they lose you money.

Flip a coin.

Because that's as certain as you can get.

The rest is waffle and conjecture.

[Bob Dalek]

I have invented a machine that turns human poo into gold sovereigns. £1,000,000 and I'll sell you 10% of the business.

[Board Game Geek]

I have invented some "Green", my lord !

[DiscoStu]

I have invented some "Green", my lord !

Is it the kind of green you can smoke?

If so, I'm in!

[tim123]

Notice the rise from 1995 to 2005, just under 200%. It's the easist thing in the world to produce figures to back up your argument with the current climate. I'm speculating on the market recovering and continuing as it has.

But we are not at 1995 equivalent on the graph, we are at the 1990 equivalent point.

Buying then, it took until 2002 years for property to go back up to the price paid 12 years before. So that's 12 years for zero return.

If you want to make a killing on propery in the current cycle, you have to find the 1995 point, and now most certainly ain't it matey!

And this is the only thing on which we disagree with you. We don't need lessons in how prices go up three fold if you buy at the bottom of the cycle, we all know that. All we are disagreeing with you on is, whether this is the bottom of the cycle. My million [1] in the bank says that it isn't (by a long way).

tim

[1] No, not really (not in pounds anyway)!

[Incognito]

I agree 100% with you; I'd stated earlier that I'm not in it for short term gains. I'm building up a portfolio that I hope will dwarf whatever pitiful pension payment I eventually get when I retire. That's why I also pay back the capital on my mortgages as well (sharp intake of breath from all those property speculators).

I also agree that if you want to sell and make short term gains then now is not the right time to buy. However going back to Sas's original point about me waiting 3 years, it goes against my game plan of a new flat every 2 years with finance raised against my existing portfolio. I'm not worried about the mortgage interest rates as I keep my rents low to guarantee tenants to cover the repayments.

[DimPrawn]

I agree 100% with you; I'd stated earlier that I'm not in it for short term gains. I'm building up a portfolio that I hope will dwarf whatever pitiful pension payment I eventually get when I retire. That's why I also pay back the capital on my mortgages as well (sharp intake of breath from all those property speculators).

I also agree that if you want to sell and make short term gains then now is not the right time to buy. However going back to Sas's original point about me waiting 3 years, it goes against my game plan of a new flat every 2 years with finance raised against my existing portfolio. I'm not worried about the mortgage interest rates as I keep my rents low to guarantee tenants to cover the repayments.

I still can't see the logic in sticking to your "2 yr game" plan and buying now versus holding off on buying anything and then buying a load more in say 5 yrs time if thats generally agreed to be the bottom?

If you buy today at say £150K and you can get the same flat next year for £100K, how does spending an extra £50K of borrowed money make any sense at all?

[Incognito]

Purely about balancing my finances. I'd rather borrow £30k over 2 years and buy 1 than £60k over 4 years and buy 2.

And before anyone starts saying that's daft and exactly the same, we're not in the sector that guarantees you'll be in the same situation in 4 years.

I'm quite happy at losing say £10k to £15k in final return when I've made a return of 300%.

[DimPrawn]

Purely about balancing my finances. I'd rather borrow £30k over 2 years and buy 1 than £60k over 4 years and buy 2.

And before anyone starts saying that's daft and exactly the same, we're not in the sector that guarantees you'll be in the same situation in 4 years.

I'm quite happy at losing say £10k to £15k in final return when I've made a return of 300%.

Somehow I don't believe anything you are saying. I reckon you have one or two BTL's that you bought a couple of years ago and that's where your property empire ends. The rest is fantasy land.

For that reason, I'm out.