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Hi there, greatly appreciate some opinions on the following, Found a 3 bedroom semi-detached with garage and off road parking in Coventry, so targeting semi-professional with small families. Amenities-wise it is near a business park, retail shops, and hospital. Good motorway links to M6 and M69. The current vendor I understand is selling this from his substantial portfolio (100+ properties). I am planning on making an offer of 155k. Agent believes should be able to get £800 pcm (have asked for proof of this from agent to verify the previous tenant did actually pay this). They believe if the property is updated to an excellent finish should be able to fetch potentially £825-850. The property is in an ok state - nothing too daunting. So some new carpets upstairs, kitchen floor and worktop need replacing. Removal of wallpaper and paint required. There is no gas central heating, only electric. Thinking its best to leave as low maintenance, but I know some tenants prefer gas. There is a fence in need of repair (might be the highest cost and priority). Houses nearby of similar stature have sold for 185k this year (but that is a very good finish + gas heating judging by photos). The management fee is 12%. The mortgage broker is confident can get a 75% ltv, 5 year fix @ 2.46% for personal let. No fees. My concerns are this has been on the market since 25/12/2018 and has been reduced from 170, 165 and recently 160. Issues bought up in conveyancing perhaps? Also, Zoopla's estimate is £125k but then I take Zoopla with a pinch of salt! Based on the above hoping to achieve slightly higher than 6% yield and around 8% ROCE. Seems a quiet area, drove down there a few times at various times and no issues. Could be better curb appeal but speaking to broker and few agents have been told its a nice family area and should rent quickly. All primary schools are min rated good on Ofsted and secondary schools, nearest is Outstanding, joint distance with another with a Special measures school. Thanks in advance.
We're looking at purchasing our second BtL. First property is a 2 bed house, which has done very well for us in terms of capital growth and steady rental return. Our plan was to go for another 2 bed house but we've changed tack. We've had an offer accepted on a one bed flat with a tenant in situ. The numbers are: Rent £475 pcm Service charge and ground rent £40 pcm Mortgage (interest only) £180. Purchase price is £88000, deposit of £22k plus other legal and stamp duty costs (approx £4500). The flat is in a conversion which has been done well and is walking distance to town. No parking involved, but good on street parking very close. The current rent is about as cheap as one bed flats go for in this area, but it is a compact apartment - not a studio - but still compact. Our view is that this is ideal for couples setting up together for the first time, especially as the kitchen currently has all appliances fitted (even a washing machine and dishwasher). I know these will become a liability when they need repairing or replacing. The numbers seem to work well, but my concern is over capital growth as I suspect this will be quite limited and perhaps non-existent. We're looking for a steady income stream for the next 15 to 20 years, rather than selling it on after a few years. What I'm wondering is whether we've missed something here. Do the numbers stack up? Advice welcome, please! Thank you.
Hi all, Just looking for other investors opinions on a potential deal I've been looking at - 2 bed terrace in Kingstone, Barnsley Asking price - £75,000, expect to get it for £70,000 - numbers based on £75k though Rent - +£450 (tenant in situ) Interest only mortgage at 3% on £56250 -£140 Management at 7.5%+ VAT -£35 Buildings Insurance -£12 Total NET - £263 PCM Money in - £22,300. I would appreciate your thoughts. Thanks, James
Hi All and Rob & Rob, Love your podcast and the forum. I have one investment flat in London and considering another. Here are my numbers with pretty conservative assumptions. Would appreciate anyone thoughts on the deal vs. holding steady with the 1 flat. Also welcome any views on buying in London now versus waiting for 2016 and a potential slow down... btw, i'm currently on assignment away from the UK, so the buy-to-let rates are higher for non-residents... Current BTL 2011 Purchase Price = 340k, 20% down + 20k other costs, July 2015 Value = 575k, LTV = 41%, Rent = 2000 PCM, Interest Rate = 3.59% floating (no ERC), Avg. monthly cash flow (after letting fees 5%, management costs 5%, insurance, 10% provisions) = 720 GBP / mo, ROI (w/o capital growth) = 9.9% New Investment 1) Remortgage Current BTL to 60% LTV, same rent and costs above plus remortgage costs, 2 yr interest rate = 3.53% = Cash Flow = 440 / mo, ROI = 2.2% 2) New Purchase = 500k, 20% down + 30k other costs, LTV = 80%, Rent = 2000 PCM, Interest Rate = 4% 2yrs, Avg. monthly cash flow (after letting fees 8%, management costs 5%, insurance, 10% provisions) = 120 GBP / mo, ROI = 1.2% Note ROIs include equity being used. Total out-of-pocket for new purchase only 20k. Again, would appreciate some critiques, etc. Happy to go further into numbers if required. Thanks, DT35