When I visit Iskandar , Japan, and European cities, I get very excited. In Dublin, 600-700 sf
apartments are 50-60% down from 2007's peak. Gross yields are above 10% for apartments within the financial centre. On a psf basis, some are at €250-300, just slightly above construction costs. Investments with high nett yields give me cash flow and give me assurance that I can always service my mortgage. I also look for future rental growth so I am very particular on where I invest , with an extra emphasis on yields.
I am about to buy my seventh investment property. Out of seven, four of them provide me with a cash flow to mortgage ratio of 125% and above, meaning that I have a buffer for void periods, drop in rental, and some cash flow back after servicing interest and would you believe it, principle.
I told my loved ones, "what is there for me to lose? If in the off chance that what I chose lost money, at most I'll work another three years more to support mortgage. If it works out, I'd be financially free in a couple of years time. The opportunity cost of not investing is to work till I'm 62 or am unable to. That's not good!"
Iskandar is not a cash flow play. There is no rental yield to speak off so it's purely for speculation and capital gains. My exposure cannot be too huge. Buy-to-let strategy is still my core strategy. Buy-and-fix strategy is a tactical play for me!!
PUBLISHED MAY 03, 2013
IPD: assets outside London give higher returns
[LONDON] Investors that bought UK commercial property outside of London this year generated returns that were a third higher than assets in the capital as a lack of competition pushed down prices, according to research firm International Property Databank Ltd.
Yields on offices, shops and warehouses purchased outside of London were 6.5 per cent for the year through March, compared with 4.3 per cent in the city, IPD said yesterday. That's the widest margin since June 2007.
Investors trying to avoid high prices in London are looking to cheaper real estate outside the capital as a six-year decline in values slows, IPD said. The amount of commercial real estate investment in central London last year surpassed the rest of Britain for the first time as overseas buyers preferred the UK's largest city, broker DTZ said in a report on Wednesday.
"The decision now for investors is how much risk they are willing to tolerate," Greg Mansell, head of research at IPD, said.
The value of regional commercial real estate fell 0.9 per cent from January through March, a slower decline than in 2012, IPD said. Properties in "second tier" cities such as Birmingham and Leeds had yields of about 7 per cent after values dropped by about 42 per cent. - Bloomberg
