Buy to Let Compares Well with the Stock Market
Although I write and consult about property another “bit of fun” that I have is investing in the stock market. It gives me something else to do.
When it comes to the stock market right now, I have to say that I think there are some great dividend yields about and I have been buying up one or two of the shares of the top 200 companies to get these nice yields.
However, as the world economic outlook has weakened somewhat over the last few months, some of the share prices of the stocks I have bought have taken a bit of a dive recently.
In particular, Electrocomponents and Amstrad have done me no favours at all and I just hope they can at least hold their dividend!
So, how does this compare with property right now?
Well, looking at yields, it seems demand from tenants for rented homes is continuing to place upward pressure on rents for the sixth month in a row.
The private rented sector is buoyant as demand from tenants continues to be strong. Many parts of the community, such as students, migrants, people on housing benefit, and first jobbers, rely on rented accommodation for their housing needs, and the sector is set to continue this growth over the next five to ten years.
In a recent survey by Paragon, 63% of residential property investors reported that tenant demand was either stable or growing and that they were responding by growing their buy-to-let portfolios.
Rental Yields
Gross rental yields have been stable at about 6% for the past year (with net yields probably averaging about 4.4%,) which is of course about the same as some top shares are paying.
The fact that rental yields are holding up is of course, in the face of rising house prices, thus providing further evidence that demand for buy-to-let is well underpinned.
Of course, a 4.4% net yield is less than the average buy to let mortgage rate, which, once you factor in lenders’ increasingly daft “arrangement fees” is actually around 6.5%.
So, while landlords are losing money on the “current account” and are hoping that capital gains will continue – which is much the same as investors in the stock market are doing!
CHECK OUT OUR SITE LETTINGFOCUS.COM:
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
ONE TO ONE PRIVATE CONSULTING click here: Property Mentoring
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS on a range of services and products for landlords too; click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
TO READ PAST CLIENT TESTIMONIALS – both commercial and private click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon
ABOUT US
LettingFocus.com are the experts on landlord issues and I’m David Lawrenson. I have been a landlord and property investor myself for over 25 years and am author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.
We help landlords and property investors make money in property by coaching them in ways that work, which are ethical and which involve minimal risk.
At LettingFocus we pride ourselves on giving independent unbiased buy to let advice for property buyers and landlords both on a one to one mentoring and coaching basis as well as through occasional group seminars.
Property syndicates and property advice in the UK is still largely unregulated and what counts as “advice” is too often more about making the promoter money than giving useful information to the investor.
With no link to property firms, developers or bridging loan providers, at LettingFocus, we can advise on where and what type of property to buy for investment, when to buy and how to buy property at a low price. We also show you how to manage tenants properly and in ways that take up as little of your time as possible.
We also do consultancy and writing for companies such as banks, local authorities, property websites and social housing providers – helping them with their landlord or buy to let facing strategy.
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
SELLING STUFF TO LANDLORDS – YOU COULD BE A PARTNER ON OUR AFFILIATE PROGRAMME. PLEASE GET IN TOUCH!
TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment or view other people's comments on this post, simply click on “link to this post.”
When it comes to the stock market right now, I have to say that I think there are some great dividend yields about and I have been buying up one or two of the shares of the top 200 companies to get these nice yields.
However, as the world economic outlook has weakened somewhat over the last few months, some of the share prices of the stocks I have bought have taken a bit of a dive recently.
In particular, Electrocomponents and Amstrad have done me no favours at all and I just hope they can at least hold their dividend!
So, how does this compare with property right now?
Well, looking at yields, it seems demand from tenants for rented homes is continuing to place upward pressure on rents for the sixth month in a row.
The private rented sector is buoyant as demand from tenants continues to be strong. Many parts of the community, such as students, migrants, people on housing benefit, and first jobbers, rely on rented accommodation for their housing needs, and the sector is set to continue this growth over the next five to ten years.
In a recent survey by Paragon, 63% of residential property investors reported that tenant demand was either stable or growing and that they were responding by growing their buy-to-let portfolios.
Rental Yields
Gross rental yields have been stable at about 6% for the past year (with net yields probably averaging about 4.4%,) which is of course about the same as some top shares are paying.
The fact that rental yields are holding up is of course, in the face of rising house prices, thus providing further evidence that demand for buy-to-let is well underpinned.
Of course, a 4.4% net yield is less than the average buy to let mortgage rate, which, once you factor in lenders’ increasingly daft “arrangement fees” is actually around 6.5%.
So, while landlords are losing money on the “current account” and are hoping that capital gains will continue – which is much the same as investors in the stock market are doing!
CHECK OUT OUR SITE LETTINGFOCUS.COM:
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
ONE TO ONE PRIVATE CONSULTING click here: Property Mentoring
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS on a range of services and products for landlords too; click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
TO READ PAST CLIENT TESTIMONIALS – both commercial and private click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon
ABOUT US
LettingFocus.com are the experts on landlord issues and I’m David Lawrenson. I have been a landlord and property investor myself for over 25 years and am author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.
We help landlords and property investors make money in property by coaching them in ways that work, which are ethical and which involve minimal risk.
At LettingFocus we pride ourselves on giving independent unbiased buy to let advice for property buyers and landlords both on a one to one mentoring and coaching basis as well as through occasional group seminars.
Property syndicates and property advice in the UK is still largely unregulated and what counts as “advice” is too often more about making the promoter money than giving useful information to the investor.
With no link to property firms, developers or bridging loan providers, at LettingFocus, we can advise on where and what type of property to buy for investment, when to buy and how to buy property at a low price. We also show you how to manage tenants properly and in ways that take up as little of your time as possible.
We also do consultancy and writing for companies such as banks, local authorities, property websites and social housing providers – helping them with their landlord or buy to let facing strategy.
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
SELLING STUFF TO LANDLORDS – YOU COULD BE A PARTNER ON OUR AFFILIATE PROGRAMME. PLEASE GET IN TOUCH!
TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment or view other people's comments on this post, simply click on “link to this post.”
Labels: buy to let advice, buy to let v stockmarket, property as an investment, property v stock market
This entry was posted by lettingfocus, on
Friday, June 29, 2007.
