I1L2T3 Posted October 1, 2013 Author Share Posted October 1, 2013 I imagine money laundering causes some behaviour that from the outside looks really quite odd. Number 1 though, what kind of investor isn't looking to maximise their return? It's an odd kind of investment ethos, what do they look for instead of the best return? One that is investing in a bubble environment where capital gains are potentially spectacular. There is a theory behind it. The idea of different types of investor: Maximisers vs. satisficers. Maximisers will do exactly what you say and milk every last drop to maximise their investments. It takes time and effort to do it, in the case of BTL the time and effort required to manage tenancies. Satisficers will set themselves goals (e.g. attaining a certain level of capital gain) and as long as they meet them be content. Satisficers may be more content with a passive investment which they know they are not maximising but yields acceptable returns nonetheless. The term satisficer is a portmanteau of satisfy and sacrifice. So, it does seem to be a serious strategy for some, if the research into 'buy to leave' is to be believed. Like you I guess, if I was investing in property I'd be looking at the maximisation route. But then in overall terms for me it would be a proportionately larger and more risky investment anyway, compared to hedge funds that would have significant backing to absorb losses in any such activity which after all would be part of a much wider portfolio. Link to comment Share on other sites More sharing options...
Cyclone Posted October 2, 2013 Share Posted October 2, 2013 Fair enough. Hedge funds though, being professionally run are presumably maximisers as every investment is weighed off against the other investments it could have made. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 2, 2013 Author Share Posted October 2, 2013 Fair enough. Hedge funds though, being professionally run are presumably maximisers as every investment is weighed off against the other investments it could have made. I'm not saying for one minute hedge funds won't let out property, especially commercial property. Just thinking about situations where they might not. Link to comment Share on other sites More sharing options...
Penistone999 Posted October 2, 2013 Share Posted October 2, 2013 Number 1 though, what kind of investor isn't looking to maximise their return? It's an odd kind of investment ethos, what do they look for instead of the best return? Correct. My buy to let properties are my pension pot for my retirement , thats why i bought them , to make me money. Leave your money in the bank and you earn next to nothing on it , where as you can easily make a 7- 9 % annual yield on your properties . Its a no brainer, and is the reason why many people invest in buy to let properties. Money in the bank wont build you a pension pot . Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 2, 2013 Author Share Posted October 2, 2013 Correct. My buy to let properties are my pension pot for my retirement , thats why i bought them , to make me money. Leave your money in the bank and you earn next to nothing on it , where as you can easily make a 7- 9 % annual yield on your properties . Its a no brainer, and is the reason why many people invest in buy to let properties. Money in the bank wont build you a pension pot . Indeed. With your investment strategy it's the only rational thing to do. You're in for the long haul and annual yield is what you are seeking. If you were only in short-term, say with an expectation of large capital gains from a snap sale then tenants could be a hindrance. Link to comment Share on other sites More sharing options...
Olive Posted October 2, 2013 Share Posted October 2, 2013 Indeed. With your investment strategy it's the only rational thing to do. You're in for the long haul and annual yield is what you are seeking. If you were only in short-term, say with an expectation of large capital gains from a snap sale then tenants could be a hindrance. I'm sure "buy to leave" was indeed a popular strategy during the last property bubble. I remember reading about the many new build apartments in Leeds that were lying empty, accumulating capital value. Link to comment Share on other sites More sharing options...
angos Posted October 2, 2013 Share Posted October 2, 2013 I'm sure "buy to leave" was indeed a popular strategy during the last property bubble. I remember reading about the many new build apartments in Leeds that were lying empty, accumulating capital value. I think it was this that inspired the government to give councils the power to to bring empty properties back into use. Link to comment Share on other sites More sharing options...
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