Askaboutmoney has an anti-property investment bent

Bronte said:
Do you ever think that residential property is a good investment?
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If you have multiple properties so you can spread the risk of a bad tenant, it is worth considering.

But it's more like a full-time business than a passive investment like shares.

But the main point of this thread is that askaboutmoney, as such, is neither pro nor anti property.

Individuals on askaboutmoney are pro and anti property. And that is fine.
 
Protocol said:
I would dispute the word "many" here. I suggest less than 10% of students are in this position.
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True, I should have said some. Of whom I know of quite a few. 3 off the top of my head currently in Dublin.
 
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The poster which kicked off this thread said that they might keep the property in case one of their children needed it while going to college.

I had that listed as a factor when considering whether to keep or sell an investment property.

But now, I would say that it's no longer a factor. Even if the property is ideal, you may not be able to get the tenants out. Which is why I suggested that they sell the property while they can. And if they want to invest in a property when their children go to college, then by all means, do so.
 
AAM is "anti-becoming-a-landlord", it is not actively hostile towards landlords like Reddit for example.
 
Brendan Burgess said:
You use the expression "anti-landlord". Do you mean anti-property? If so I will change it for you.
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Sorry yes BB you are correct. I have a kind of odd brain and sometimes get words wrong. I have a meaning and put the wrong words. Obviously don't think you are anti landlord.
 
ClubMan said:
That's a complete fallacy that's also often repeated.
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Tax efficiency

I was just replying to your post, you deleted it, and I also changed my post as there was too much in it.

You're going to have to trust me that tax was paid and it was a good thing it was cashed in. Remember we are not in Ireland, different rules apply.

Fallacy - horses/gambling/shares

Well I've never managed to get beyond it. As you know I've on here like you a very long time. So far nobody has convinced me .... probably because bricks and mortar are real to me. And you have full control.
 
Bronte said:
Do you ever think that residential property is a good investment?
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When I invested and during the first few years, I thought it was a good investment. The property quickly took value, the rents were rising...
Currently, I don't think it is a good investment as the rules are constantly changing, the costs are higher (buying, maintenance) and there is a complete uncertainty in terms of rules and politics surrounding the sector.
Bronte said:
They have then let the other rooms tax free to other students, and sometimes to siblings working who have finished college. No tax is being paid and the property has enjoyed capital increases.
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Here, you are talking about the rent a room system. Different rules, different tax... so probably the situation is different in terms of good/bad investment.

Would I invest today for the current price? Absolutely not.
Will I continue to rent? Currently , that's not the plan.

I have some individual shares, with mix results... I still have some and still buy some with a tax advantage... I would agree that I don't know enough about shares to really want to invest in them individually. However, I am happy enough with some ETF, despite the tax issues.
 
Brendan Burgess said:
If you have multiple properties so you can spread the risk of a bad tenant, it is worth considering.
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You cannot get to multiple properties unless you start with the first one.

Yes there are bad tenants. On here and elsewhere one only hears about the bad tenants. The vast majority of my tenants have been excellent. That's the case for any landlord I know. And that's despite our own individual horror stories.

You are rarely going to hear about a good tenant, because they are not a problem, so there is no need to discuss them. Bad cases make headlines.
 
Premos said:
When I invested and the first few years, I thought it was a good investment. The property quickly took value, the rents were rising...
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In my time there have been both highs and lows, property rose and it fell. Rents rose, fell, there was no rent. Right now if property collapses, as it has done in my lifetime, it will not affect me. Nor you I suspect. A relative had to sell in the bust. Another lost two properties. If each had managed to hold on they would have been fine. In the second case the collapse spooked them. But rents were covering the mortgage.

On AAM there were quite a few sad cases after the Celtic Tiger of accidental landlords. I believe that has contributed to the view property is a bad investment. People didn't want to take ownership of the fact they bought too high, that they didn't want to be a landlord and wanted to flip the property.

Someone like you presumably wisely purchased, could afford it thru lean times, didn't over borrow.
 
Bronte said:
Yes there are bad tenants
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I never had a really bad tenant. I had some excellent ones, mostly good ones and a couple of not that great one. Never any issues with payments, more about the maintenance of the property.
However I know the risk. I don't speak about rental to a lot of people and still have heard about some nightmare tenants.
For me, the biggest risk is political and the general view that LL are making so much money that they can take it on the chin. That's despite the fact
that even the government seem reluctant to take the financial risk involved in cost rentals.
www.irishtimes.com

Department ‘not keen’ on increasing cost-rental State funding, says Housing Agency

System for providing home for low and middle income workers facing growing financial viability risks in Dublin
www.irishtimes.com www.irishtimes.com
The rent in cost rentals are only 25% under the market with different rules...
 
Protocol said:
Like property, the value may go up or down.
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The value of a share and a property have the exact same basis. In theory, they are the the net present value of the future expected cash flows. In reality, values of both asset classes are based mainly on vibes.

To my mind there are two main differences between the assets:
  • Equities are self managing. The investment entitles the investor to a portion of the company. The management team is in place and they make all the decisions, ensure the business operations take place etc. For property, all the management and operations fall on the investor.
  • Divisibility. One can buy or sell part of an equity investment, but not a property. This also leads to valuation differences. As many shares in a company can be sold by many sellers to many buyers, the price is both based on and gives more information. For a property, there will be one (or a small number) seller and one buyer (or a small number of bidders). It is much easier for the price to be influenced by irrationality (sentimentality from the seller or a bidder getting carried away with a bidding war for example).
Obviously there are other differences, but I feel like these two have a large influence.

And not forgetting the number of property investors who don't understand the difference between cash flow and profit.
 
Bronte said:
Probably I have a problem with shares, I think they are the same as betting on a horse.
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TBH, property investment is more like buying a racehorse. I've never understood where people got the notion that equity investment is like gambling. Is like to find the bookie that would pay dividends on my bet, let me sell the bet to other punters, and there's no end to the race (barring company failure).
 
There is without doubt a negativity towards property investment on the various forums. But that is to be expected generally people only engage on forums when they have a negative experience (s) and share that with the group. I don't think I've read many or any threads about how great a tenant was or isn't it great the rent I earned is so high etc

As to the argument of property investment vs equity investment. There are some critical differences that have not been highlighted above.

1. Property is finite or certainly not easily increased. Which protects pricing to some degree.

2. Property investment is leveraged (or at least can be) and the cost of the leverage is allowable against profits.

3 There is an intrinsic floor to the value of the property which offers significant downside protection.

Investing in equities or etfs does not offer the above unless you go down the road of specialized leveraged products which are very very risky.

Full disclosure I own property and equities and etfs.
 
Bronte said:
And you have full control
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That used to be the case but not anymore. Ever since the first eviction ban, the feeling of being fully in control of the tenancy end date, or setting of rent has been diluted in a fog of legislation that is tenant centric.

I had multiple properties. Due to rent controls, all ended up substantially below market rent with costs rising, and there was nothing I could do about it. That's not being in full control to me. I hold just one property now.

I am not anti-residential property investment, however, I would not advise anyone to embark on it now due to the lack of control of the investment.
 
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Banquo said:
There is without doubt a negativity towards property investment on the various forums.
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In my opinion it's a negativity towards concentrating one's net worth too much in one asset class/geographic region to the detriment of diversification and risk mitigation.

If someone proposed putting 100% of their net worth in equities, particularly a small number of individual company shares rather than an ETF or diversified index tracker, I think you'd get plenty of people pointing out the pitfalls in that context too. Even moreso if they didn't own their own home.
 
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