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Hi All, I'm using ROI, amongst other metrics, to determine if it's worth investing in a given buy-to-let property or not. However, I'm struggling with a couple of things, which are related, and as a newbie, I'd love your input on them. I see most of the people using ROI, and even many calculators online or spreadsheet, don't include capital growth in their ROI calculations. I'm not sure I understand why they wouldn't include capital growth in their calculations. Yes, it's impossible to predict, but on average it's fair to say you could use a 3.5% capital growth in your calculation. Do you include capital growth/appreciation in your ROI calculations? Do you use any formula in particular? I've seen various posts where people say the expected ROI depends on many factors, both personal and the specific property. I agree with that. But at the same time, I've read posts online of people saying that they wouldn't even touch a simple buy-to-let deal if the ROI is not at least 10% (I've seen a person going as high as 20%). Based on my research, achieving an ROI of 10% is almost impossible with a standard buy-to-let. Definitely highly unlikely. Am I missing something here? Are they maybe including capital growth in their calculations, hence making the 10% (and even 20%) realistic? Cheers, Sacha

Hi All, Sorry for the long post. I'm totally new to this and was hoping to gain advice from you all, so any wisdom imparted would be sincerely appreciated. I'm interested in beginning my property investment journey after gaining much confidence from the contents on this wonderful site. I'm from Birmingham but live and work in London. Initially, I was looking for a high yielding B2L property in somewhere like Sheffield or Nottingham, to potentially net between £500 - £1,000 per month cashflow to generate some passive income. As a newbie, I want a hands off approach, interested in modern properties that are immediately ready to rent out; but have recently learned my cousin works on upgrading properties so thats a bonus for some flexibility in regards to potential house flipping. My strategy has now potentially changed as my Mom (currently living in a 3 bed council house in Bham) needs to be rehoused, due to her current area and neighbours being far from the best to say the very least! So in saying this, I now intend to purchase a mortgage for a place for her to stay in Bham (2-3 bed house or 2 bed apartment in city centre) that will see good capital growth in the long run as the plan is for her to live there for the next 10, 20, 30 years plus. So this would be a long term investment. I have around 30K to invest at the moment, and ideally would like for the monthly repayments to be low because she'll be living there alone (would H2B be pertinent here?). I don't intent to make profit off Mom or for her to have to share, but at the same time, I don't want to have to go into my own pocket to top up what she cannot afford as I am already renting in London. I did a mortgage in principle with my bank the other day and they said I could borrow in the region of 280K. My credit is pants at the moment so I'm using the next 9-12 months to increase my chances of getting a 5% mortgage next year although I would really want to buy something in 2019. So I suppose my questions are: Is what I'm pondering ambitious or outside the realm of success with the 30K capital and poor credit rating I have? Outside of transport links, being close to city centre, good schools, shops/supermarkets/parks/having a drive and garden etc, what other key criteria do successful property investors look for, that bring confidence that capital growth is very likely to come down the line? After looking at Rightmove and speaking to local estate agents and viewing properties that fit your criteria for example - what are the differentiators or main drivers that prompt an investor to push the green button and buy? Should I maintain my original plan, and find a 1-2 bed B2L property in a high yielding/high growth area like, Leeds, Liverpool, Nottingham, Manchester, Sheffield and essentially keep saving while banking the £500 - £1,000 per month cashflow - because in a couple of years I'd soon generate another 30K to get her the property in Brum - and in that time I would have gained some equity/growth in the B2L property. I do plan to build a property portfolio so when you have a strategy for acquiring multiple properties; for tax reasons, is it better to purchase them under a limited company rather than as an individual? When people say, test your numbers thoroughly, what exactly does this mean? How can you test that your strategy for a B2L monthly cashflow goal is truly feasible? Would the H2B scheme benefit me in for my circumstances? Many thanks

Hi Everyone, I went to Liverpool last week, came back on the 6th July 2017. I spent 4 days researching the area, I love the city, It has such a unique vibe to it. I spoke to almost all the agents in the City, most gave great advice and had properties with great yields. I came back excited to invest. At a networking meeting on the day I got back I got talking to a guy that invests in Liverpool. With all my new found enthusiasm for the City, I told the guy that I wanted to Invest and wanted to just get any advice he had about the place. Like a wet blanket over my burning enthusiasm, he said to me you won't get much capital growth there. As this is important to my long term strategy, I was very disheartened. I would really like to know if anyone has any experience of Liverpool and can restore my enthusiasm for this amazing place? Thanks Chim

Should I sell this property? One of my properties is a 2-bed terrace in Bristol. It's my former home which I converted to a buy to let a couple of years ago. It has had good capital growth and is now valued at around £320k. The rent is £1,100 per month. The capital growth means there is a good amount of equity in the property (£160k). As my property investment knowledge has grown over the last couple of years, I have been considering whether this money would be put to better use elsewhere. I have tried to pull money out by remortgaging to invest further in other locations. However, as it is not particularly high yielding, the property does not satisfy the rental stress tests to release any equity. Whilst the Bristol market was taking off in terms of capital growth, I was reluctant to sell despite the low rental yield. Now, with the flat Bristol market, I am really starting to wonder whether now is the time to get rid of this one. In the long term I am confident that this property will experience further capital growth – great area, lots of investment going in etc., but my concern is the lost opportunities that I might be missing out on by not investing in other areas/properties (e.g. with the £160k I might have enough for maybe 3 or 4 flats in one of the northern cities which are currently performing well). Another thing pointing towards selling is that a sale before April 2020 would incur no capital gains tax (as it's my former home, I would get a combination of PPR and lettings relief). The changes to PPR and lettings relief announced in last month's budget mean that, from April 2020, I estimate a CGT bill of around £7.5k (based on a sale at £320k). On the other hand, there's no CGT until you actually sell so if I hold the property for the very long term then that won't be an issue. I appreciate your answers to this might depend on what my strategy is. I'm 34 and aiming for looking to use property to fund retirement at around 50. I generally favour capital growth over rental yield, although as new parents both my wife and I are already working part time and a decent rental yield might help us further cut down our hours in the future. Grateful for any thoughts you can offer. Thanks Matt

Hey everyone! Becoming increasingly keen on an investment property in Leeds. We want to go for capital growth rather than a good yield and looking for advice on main areas of Leeds to focus on - whether that be new builds or we do have the resource for refurb projects if it will actually add value in areas that are likely to grow. We can't decide whether to go for city centre flats geared for professionals, or a larger property potentially for student accommodation. Have seen lots of lovely new build flats in the centre, but they seem expensive compared the rest of Leeds and I worry that the market is filled with them. Equally have seen some rather cheap 3/4 beds but we are not from the area and we really don't know which are 'good' and 'bad' roads to choose. What has everyone else experienced in this city? Would love to hear your thoughts. Many thanks in advance for your help and input Anna

Hi everyone, My name is Alistair and I live in Dorset. I am finally in a position to start my investment journey. My focus is on Capitol growth. I would like to invest in single lets, preferably in or close to a major City (Manchester, Liverpool, Birmingham or Leeds). My available funds would be enough to buy a 1 bed appartment in a prime location or a 2 bed slightly outside the city centre. I would like to ask advice on whether a 1 bed appartment is a smart investment choice for reasons such as Capital growth potential, ease of finding tenants, potential void periods ect. Or would you buy a 2 bed property slightly outside of the city centre? Any advice would be much appreciated. Thanks Alistair

Hi everyone, my name is Xuan and I am new to HMOs. I am interested in investing in the Croydon area and have done some research, but would really appreciate your opinion. I have selected Croydon because: 1. The property price is still quite affordable using London standard 2. There is potential capital growth 3. It is about 30 mins drive away from my house. This is quite important for me as I have a young family to look after. 4. I am only interested in professional HMO tenants and I think Croydon should have quite a lot of them (especially given the Westfield shopping center is moving in) 5. I am hoping to offer HMOs with good standards (e.g. newly refurbished, with ensuites and close to the stations) But I have heard that there are a lot of new flats and commercial to residential conversion going on. I have also heard ppl saying that the HMO market is quite saturated already. I am not sure if any of you are familiar with the Croydon HMO market and can share some light on demand. Thanks a lot Xuan

Hi all, Looking for a range of opinions on my current dilemma. I have 2 x BTL properties. Property 1 - 2 bed mid terraced modern house in Devon, Rents for £675, Value £175k, ROI of just over 5% once all costs are taken into account including things like building a fund for replacement boiler etc. It's bringing in around £2k per year gross profit before tax. Property 2 - 2 bed flat in Stevenage, Value £210-230k ish, rents for £800, Just bought this after a horribly delayed purchase process. Washing its face but not stellar, hoping rents rise a little once things settle and all the empty units get sold/let. Listening to the podcast and reading around for capital growth all the advice seems to be focus in the North West. So I'm considering selling the Devon house to invest in the North West. If I sell I'll release £42k after all costs and a little bit of CGT which as an example I could put into a 2 bed flat in Bradford (or other Northwest location) through RMP. Purchase price of around £120k rents for £625, £39k invested delivers an ROI of around 5.5% once all costs including repairs provision are taken into account. Annual profit around £2k. So pretty much the same as my Devon house I already have. So .....given that the profits are broadly similar is the potential upside of the capital growth in the North West sufficient to warrant selling the Devon property to invest up north. I have very much a long term view and want to be a hands off investor so no self management etc. Thoughts/Opinions much appreciated. Thanks all Noel

Hi, I have been recently exposed to a lot of literature (advertising?) on investment value of The Northern Powerhouse and similarly on the investment value of London commuters towns; and so I have been thinking - if I had to choose..... So back to basic and judging against the 2 main criteria of capital growth and yield, it appears (in the literature anyway), that the London commuting towns (within the M25) are benefiting from larger capital growth (or have been over the past 2 years) than the majority of the Northern Powerhouse city centers (except Manchester maybe). The yield is greater in the Northern city centers (Leeds, Liverpool, Sheffield). So to start on a plain field let's assume similar property type, new build apartment 150k GBP, rental yield 6%. Either in a Northern City Center or in a London commuter town. What would be your pick? Keen to hear your ideas. Antoine

Hello PropertyHubers! My name is Paul, I've been procrastinating in property for 10 years id say, and suddenly find myself at 53....a veritable cobweb-covered old timer.... Fortunately wifey and I have a mortgage free farmstead in Devon and a Slough end of terrace crash pad ....through no real strategy. I'm determined now to take action and join you successful property folk I admire so much, and build a portfolio, and have been on numerous courses....and one more to go from Mr G. Armstrong next month. Rob D's fab 'running the numbers' spreadsheet is sooo much better than most courses and it replaces my feeble homemade version, but it does occur to me it doesn't include any provision to speculate about capital growth when evaluating the numbers of a possible investment. I understand this varies hugely across the country, but how do you guys establish a figure for this? (Some areas in Devon don't have any capital growth in the last 10 years for example.....) I'd be very grateful for anyone's methodology to come up with a figure, and how you take this into your calculations bearing in mind capital gains tax. Good luck to everybody and massive thanks for the wonderful positivity in this forum Bye for now and thanks in anticipation Paul