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Showing results for tags 'yield'.
Found 25 results
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Hey Can anyone recommend a software program that will allow me to me to measure how my business and property portfolio is doing? I'd really like it to measure both things in one program (general business performance, and portfolio performance) and it's vital that it will allow me to forecast/test the effect that potential purchases would have. I'd love to - Be able to test what happens to my business cashflow if I buy/remortgage specific properties at a specific points in the year. Compare the performance of two possible purchases to see which is likely to perform best for me in 5/10 year's time Keep track of the overall health of my investments As a bonus, it would also be great to be able to do basic accounting things like create Profit/Loss statements etc Is there a program / app / web-service that will allow me to do all of these things? I could probably fashion something myself in excel, but it'll likely take days of work to build and test and there are better uses of time if it already exists Any pointers gratefully received! -
Hi, Nice to meet you all. It's my first post on this forum. I planning to do my buy to let in the north. I was thinking that Leeds might be a great location to start (house prices are still decent compared to larger cities such Manchester) and it feels that the city is growing and attracting more businesses. I have seen this place on right move (https://www.rightmove.co.uk/properties/73474821#/). The price looks incredibly low and the yield pretty interesting (11.5%) - to be double checked though. I was just curious to have your opinion on the below questions: 1) Is it usual to achieve ~10% yield in one bed flats in Leeds or is there something I should be sceptical about? 2) Do you believe that the city is in an upward trend and that we could expect to see a decent demand in the rental market over the coming years? Many thanks for your help!! JB
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Hey guys, After some opinions on the scenario below. I am currently purchasing a flat in my company that after a BRR I will leave 22.5k of my own money that will yield 20% if rented out. Total equity left in the property £44k. I also have another flat in my personal name that I could sell that has 38k equity ready to release. (Initial investment 41K) My current return on cash in that property returns 13%. I am looking to release funds to carry on building my portfolio / pot of cash. Which option or other strategy would you consider and why?? If you have any additional ideas, please also share Many thanks James
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Hey all, Can anyone clarify how Yield, Equity & ROI should be calculated when following a Buy, Refurbish, Refinance strategy? Most online resources only discuss these in terms of purchasing a property and letting it out / selling it, rather than refinancing it. I want to make sure my metrics are comparable with everyone else's! Theoretical BRR Scenario: I buy a property for £120k using a bridging loan and a deposit of £48k I spend 6 months renovating it, with the finance costs & renovation totaling £25k I then refinance onto a BTL mortgage with the property valued by the mortgage co at £180k and a deposit of £72k (mortgage £108k) This releases £35k once the original deposit (£48k) & costs (£25k) are deducted The net rental income of the property is £4.5k pa Yield = Net profit / Cost But is this the original purchase cost (£120k) or the valuation (£180k) 3.75% or 2.5% ? Equity = The market value of a property - the debts secured against it I'm pretty sure I know the answer to this, but confirm that 'debts' does not include debts to me (ie. the £25k) It's simply £180k value - £108k mortgage = £72k ROI =Annual profit generated / money invested Am I right in calculating it like this: 4.5 / ( 48 + 25 + (72-48)) 4.5 / 97 = 4.64% Thanks for the help, it's much appreciated!
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My first post on here.... I'm looking for High Yield BTL's 8%+ I live in Leicester, which has low Yields, even in the cheaper area's of the city (Narborough Road etc) Nottingham has been my next step after listening to the Podcasts but I cannot seem to find any High Yield Property Has anyone got any suggestions? I would like to self-manage, but I am open to having my property managed if the numbers stack up. Also I am open to buying property in other locations but would like them within 1-2 hours of Leicester Appreciate your feedback PS. I do have experience over the years of managing property... upto 30 properties at a time including HMO's before a licence was needed
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Hi all, I am a keen investor in the south as this is where I live and Know. In the areas I invest I can pick up a 2 bed flat for around 135-140K with a service charge of around £110 A property like the above rents for around £700 - £750, and the demand is high. Mortgages I have on these are around £220PCM so the returns are not too bad. I have a number of these and am now investing through a ltd company, as I know many of you are. I am now looking to pursue capital growth as I am happy with my income. Can anyone recommend areas that may have more potential than the South in growth, and where the properties still cover their own expenses. Examples of any previous purchases and value increases would be great to hear about Many Thanks James
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Hi Everyone, I have made the decision to travel up to Leeds next weekend to carry out some viewings on property up to about £110,000. Only have 1 day and i want to make the most of the trip to get a feel and understanding of what and where is good new for a B2L and i don't want to waste any time doing it. can anyone advise me on some particular B2L hotspots in Leeds that i should make sure i go and see? I am split between going for a 1 or 2 bed apartment or a 2 bed terraced house that needs some TLC. any advise would be really welcome.
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Hello Hubbers! I have been absent for a while, but logging back on to try and get some advice. I have been operating the rent a room scheme in my own 3 bedroom property for around 5 years-charging on an all inclusive basis - with certain caveats and stipulations in place with regard to energy consumption etc. Typically bills didn't increase that much and I made a tidy profit as well as someone else paying my mortgage. I am now converting the 3 bedroom flat into an HMO (Scotland based-therefore, yes, this is essential) probably with 4 bedrooms, one bathroom, large kitchen/living room plus two en suites. Currently two people are living in the property, but in the last 3 months, the bills have sky rocketed. I have identified who and what has caused this and due to contractual arrangements in place, I will be able to recoup some of the money-however I am looking to put measures in place so that this won't happen again. The bills will be more palatable with 3 or 4 people paying for rooms, but I still want to see these bills reduce-they have been astronomical. Are there any HMO landlords out there who charge on an all inclusive basis/room by room? How do you keep your energy bills down to ensure you are charging enough? Over 5 years, I haven't had a problem with this, but as I will be absent from the flat going forward-I will need to have other mechanisms in place. The property is based in Aberdeen (which as you may or may not know is going through a fairly large depression) so just putting up the rates is not an entirely feasible option. Any recommendations for smart meters, hive type devices or contractual mechanisms for over use are MOST welcome. Thanks for reading and look forward to your responses! Kind Regards, K
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Happy Easter All, I was curious what ROI percentage and net yield do you look from from a buy-to-let? Thank you in advance. Joe
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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 -
Hi everyone, Just wondering whats everyones minimum ROI? The best i'm seeing for flats in Liverpool city centre is about 12-13% using a 75% mortgage. To calculate my basic ROI I use: 25% of purchase price (75% mortgage) Mortgage costs at 2.5% interest Rent Service charge Ground rent Agent fees 10% pm Look forward to hearing from you lot! Max
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Hi my name is John and I am at the beginning stages of my property journey. I am in the process of purchasing my first BTL in the West midlands. Should make a decent return on that, hopefully be able to refinance in the same year to get the second property. What I am looking for is to connect with same minded like people. People who are starting or on the same level or even further. As long as you have the same mindset and are willing to grow and involve please let connect. Happing investing Thanks John
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Hi all What gross yield, net yield and monthly cashflow do people aim for or achieve with HMO properties? If you have a real world example then a little detail along with the figures would be great! I just want to get a feel for what is deemed acceptable for this type of investment prior to setting my goals. Thanks in advance Paul
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Dear all, I would be very grateful for any advice. I want to invest for myself and am currently trying to sell my house in order to start the process. However in the meantime, I want to help my mum make the most of her investment money. She is currently investing just over £150k with HSBC and receiving around £400 a month. I am convinced I could get her an income of closer to £1000 a month (i.e. net 8% yield). So, my criteria is this: High priority High yield (target net 8%) House in good shape when purchased (i.e. no structural work, minimum cosmetic improvements required) In area where demand for rental properties is high (i.e. minimise risk of voids) and likely to remain so for foreseeable future Secondary priority Market growth Buy 3 properties (Mum has three daughters and would like to leave a house to each, although personally I'm keeping my fingers crossed that she'll just never die!). I also think 3 properties is a good idea to spread and void risks. I have wondered about Edge Hill, as I know rental yield is high, however my concern is that the area will get saturated with rental properties and consequently bring down the yield margins. My mum's only 60 and so I want these properties to see her for the next (hopefully!) 40 years! If you could please recommend areas that would fulfil the above criteria for me to investigate, that would be very much appreciated. Or, if you are currently investing in and around the Edge Hill area, I would love to hear about your experience and know your opinion regarding the market. Thanks in advance, Charlotte
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Hello all, I have a situation and some questions that hopefully I can get answered. Situation: I have sourced a property that has a tenant in situ and at the purchase price I can get it for it would achieve roughly a 10.5% yield. In order to purchase this property I would need around £10,000. It is being purchased slightly under market value and it does not need any renovation costs. The property is off market currently and is in the north west. I am fairly new to property investing so any advice on the below would be massively appreciated. Questions: What are the different ways in which I could raise capital for an investment? How can I find a JV partner especially somebody cash rich and time poor as a hands off investment? What are different ways I can present a deal to an investor so that it seems more appealing? Thank you in advance.
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Hi I am currently in the process of looking at a holiday let and first of all wondered if anyone had any experience? Would you recommend as a safe bet as part of a property portfolio (that also allows you to get some occasional use of) or is it a lot of hard work for little financial and personal gain? Also is the yield calculation the same? Secondly (and I think I know the answer to this)... we have just discovered that the one we were looking at is a Grade 2 listed building, which kind of puts me off! Would anyone touch a listed property as an investment? It's a beautiful property, in a lovely location (countryside, sea view, 10 min walk to beach etc) but has been on the market quite a while... and reduced twice. I'm guessing we have just discovered why..... Would be interested in your thoughts/pointers... as I am new to this! Thanks Ginger
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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
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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 -
Where in the country would you head if you lived in London and wanted to invest in the following: Within 2 or so hours drive if possible Needs high enough yield to pass new lending restrictions at 75% LTV Good fundamentals and demand as an area Potential for some Growth and not purely yield. Some suggestions: Peterborough / Wellingborough Luton Swindon Basildon Chatham Any others??? Any favourites ???
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Ok - so just curious.... Is there anywhere in the country that comes close to being able to provide the following "Unicorn" BTL properties... 10% yield on a single let (so not HMO or Serviced Ac) No LHA No "Ghetto" areas Good demand for Tenants and also people want to live there. Doesn't matter if its a 1bed studio or a 4bed house. In my experience it seems that the yield ceiling for the above is closer to 7%. Anybody able to beat 7% in todays market in some corner of this green and pleasant land ? -
Hi All, This my first post on the forum. I was wondering if anyone can give me some advice on target net yields for rental properties. Is there a range or scale I should be aiming for? I am wondering if a yield of say 10% is achievable on a mortgaged property, which would be comparible to a stock market index linked fund or similar investment. Thanks Josh
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So I’ve been looking at yield as a basis for making property investment decisions. It’s been suggested that you have a certain percentage yield in your head and if the purchase price vs achievable rent give you your yield then the purchase is a good deal. We have “gross yield” which is purchase price divided by annual rent. We then have “net yield” which is purchase price divided by annual rent minus expenses. See below example calculation for net yield. 3 bedroom London = £365K (based on average asking prices) + stamp duty of £8,250 = £373,250 Achievable rent = £1,900 pcm (£22,800 annually) Expenses *mortgage payments = £7,944 *10% of rental income to agent = £2280 *10% of rent for repairs = £2280 *£600 service charge *Voids (1 months’ rent per year) = £1,900 Total: £10,444 Net annual income from rent: £22,800 - £10,444 = £12,356 Net yield (£373,250X100)/£12,356 = 3.31% So my question: have I worked out the net yield correct? Also what net yield figure do people look for? Thanks
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New to investing in London & greater London areas, UK. Previously invested in US prime areas, bay area, SF, Manhattan with success on capital appreciation and yield. These properties were leveraged, some I purchased to live in and one as 'investment' property - I have lived in London for 2.5 yrs now and am looking to cash out of a few properties in US and buy investment properties in London or greater London areas - goal will be yield-based investing with at least 10-15% YoY capital appreciation.
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Folks, I have been struggling a lot, as foreign investor, to find adequate buy to let mortgage. Often bound by the limited lenders available for non-dom I most of the time end up with a principle+interest mortgage. As such I need to aim for a max of 60/40 LTV in order to keep the investment cash flow positive. Here's are my rough calculations. Say use a property price 'P'. P can be any number really. Let's use 4% interest rate and 25 years mortgage (which makes the yearly repayment of the principle conveniently equal to 4%). So you'll be paying 4% to the bank on interest only mortgage and double (4%+4%) on interest+principle. I exclude other fees and costs to make the illustration simpler. Now if we take 70/30 LTV the interest will be 0.04 x 0.7 x P = 0.028 x P, or 2.8% of P. For interest and principle it doubles to 5.6% of P. Meaning you need to have a net yield of 2.8% to cover your interest only mortgage and 5.6% to cover your interest+capital mortgage. Now with average yields, after cost and letting fees we will be hard pressed to find anything higher than 5% net yield...on average that is. The number got worst if we increase LTV of course. 65/35 will require a net yield of 5.2%, again pretty high. 60/40 requires a net yield of 4.8% to be cash neutral. So all in all I cannot see how we can get cash positive with interest&principle mortgage. I see all your guys high LTV and high gearing. I dream of that but unless the mortgage is interest only it doesn't seem to work for me....am I missing something here? I wish anyone can prove me wrong there but I am struggling to make the maths (and real life experience) to work here. Shall I be screening out all investments that are not cash flow positive with my usual interest&principal mortgage? Thanks for the help there. Antoine
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I have chosen an area that I intend to invest in and broadly speaking the numbers seem to stack up. However, I have some serious mind fog when it comes to calculating net yield and ROI. I also want to ensure that I am including ALL of the necessary expenses when making the calculations. Is there anyone out there that is able to share what calculations they consider most important and what costs they include when calculating whether an investment is worthwhile??? OR Even better, is there anyone out there that is willing to share an excel spreadsheet that they use to do their calculations that they would mind sharing. Thanks in advance
