Wish

iTrader: (2)

Ok, Im lucky enough to have a couple of houses that i rent out in the Kent area (Herne Bay) to be exact.
Now im thinking of adding another to my list, but this time im really unsure weather this is the best way to go.
Im worried a little by house prices and although they are for a long term investment (10 / 15 yrs ) I only by 2 or 3 bedroom houses and it seems that the 2 beds are making me a better return.
But unlike the other houses that i currently own, this one will be streching me by using a lot of my capital sitting in high interest accounts. (My Comfert account)

What woud you do ??
Is the housing market still sound, and safe or are we in for a rough couple of years with little growth ??


I know this is fairly vauge but any help ?

imlach

No-one on here has a crystal ball.

You'll get differeing opinions from everyone. You have to do what YOU think is best. If you're looking very long term, then obviously you can't go too far wrong.

Wish

iTrader: (2)

True, If looking long term... Which i am. But you never know what is around the corner. The others that i have are long term and are 'Safe' In just about any event. But with this one, i would be using a lot of the captial in my 'Safe account' And seeing money just sitting in there not making money is not ideal. But it like a comfert thing for me.
Its like a blanket so to speak, its always been there and one day it might not !
I think im really batterling with myslef here (LOL)

ProperCharlie

look at the return you will be getting on the full value of the capital and burrowings invested. in the current market, i'd guess that this will be fairly low. then look at the risks: increasing interest rates, possible down turn in the housing market (negative equity?) possible over supply of housing leading to difficulty in finding tenants, reduction in rentable value etc.

is it still worth it? if yes - do it.

just a thought....

ProperCharlie

you can get a nice safe 4.5% from ING. why risk exposing yourself to a potentially unfavourable market at the moment?

Faire D'Income

I'd largely agree with Imlach but my advice would be to sit on the money for the time being - long term you can't go wrong but I foresee problems in the short term and there could well be bargains to pick up in a year or so.

Personally, I like to have at least six months of cash invested at any one time just in case things turn nasty but although everyone keeps raving about this ING account, bear in mind that after tax your net interest is barely above inflation. I'm talking about real inflation here (RPIX), not the flattering new system recently introduced which suggests that inflation is running at 1.2% - yeah right!

Equity markets are giving better returns than the rental market at present but if you feel that is too risky then ISA/TESSA etc may be the way to go or just keep the cash as you say.

If you have to stretch, more often than not it's a stretch too far.

ProperCharlie

i agree that 4.5% is close to f**k all after you've paid tax, but there are fairly low limits as to what can be saved in cash ISAs.

Faire D'Income

But you will still earn more than a standard savings account as you will earn a portion of interest which is tax exempt plus as I said you can also invest in the equity markets to get a better rate of return than property - in the short term.

steppers

mate of mines an estate agent and says houses sub 200k are still fine and rising
anything 3-400k upwards they have peaked
my guess is you'll be okay to buy now but not 12-18 months time
take a bigger gamble buy one up t'north where my bro lives bridlington
boy are they rising in price
you'll get a good 3 bed semi for 80k and watch it grow