Originally Posted by joeri
So thats about 5%-6% return and you have to pay maintainance costs. How is that a really good investment? Only if you expect prices to rise in the future itssolid, but otherwise?
Yes, if you buy a property cash (no finance) it's a return of 5-6%. Maintenance won't be overly high on a decent purchase as you generally don't include any appliances except a cooker and therefore re-decoration should be the main maintenance cost. Most landlords will do this themselves to save expense.
However, I can only see the prices of these particular properties going up. There are so many people who will always need to buy a house in this price bracket (first time buyers, investors, divorcees, retired people downsizing, people with money problems downsizing etc...) that there is always a demand. In any market.
Therefore with appreciation your investment could grow considerably, especially if the market increases over coming years and it is definitely showing signs of becoming more stable. Offering you a significantly higher return than the banks.
It's all a gamble though in the long run. Just an educated one.