property v equities

galway_blow_in

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I tried to open a thread the other day on this subject but obviously breached some forum rules, I will not name any particular companies today or locations for property so I hope this will allow me to stay within the rules

anyway , ive been thinking about the benefits of simply investing in high dividend paying publically listed companies versus BTL property as a means of creating income for an investor , to do so I realise its nesscessery to only think in terms of cash buyers

I realise there are many BTL properties on the market right now which can deliver a yield of 6% and over in many of our cities but it is also the case that such yields can be achieved from investing in various high dividend yield publically listed companies , beit in the uk , Europe in general or the usa

Ive come to the view that perhaps BTL property investment is not the most obvious road to take when it comes to increasing wealth while also providing income , i see global corporations as being more sure of growing in value than simple bricks and mortar , i also view them as providing more economic diversity , a house is just a house at the end of the day , i also find it more appealing that equities are so much more liquid and quicker to get out of than a BTL

i would appreciate other peoples view on the subject
 
I would say a (GROSS) yield of 6% on buy to let's is on the low side.....
Just a quick google on Myhome.ie/Daft gave me this property in Swords co Dublin selling for 145,000 with a rent of 1,200 p.month or 14,400 p/year. That's almost 10% yield.

Sale price.....
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Expected rent for similar apartment....
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Considering there are less than 40 properties being advertised for rent in Swords (used to be over 200 a few years ago), the demand is very strong.

Unfortunately there is a v big difference in Ireland between GROSS and NET yield, but I am hoping this will be somewhat addressed in the budget.
 
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when i work out yield , I deduct management fees from income , I also factor in legal costs and stamp duty at the time of purchase , so if an apartment costs 85 k , rent is 650 per month but management fee is 1100 per year , I work out yield as follows

cost = 85 k + 1% stamp duty + 2 k for legal fees when you include land registry fees = 87850 gross cost of property

rent = 650 x 12 = 7800 minus 11 00 management fee = 6700 , minus 150 euro property tax = 6550

initial cost = 87850 over 6550 net income = 7.5 % ( or slightly above )

that leaves my return on an apartment costing 85 k ( cheap by national standards ) at only 1% higher than some high paying dividend publically listed companies which return 6.5% without concern about difficult tenants
 
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