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jamesguy85

125k GBP to spend - where can i get a 6% plus yield in the UK (ideally houses)

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Hi James, just copied my comment from a previous post on here :

 

 I'll give you info on my 2 Wigan properties as they are my best for cashflow as that's my focus. Both the below were 75%LTV

1- purchase price £72,500, 3 bed semi, £525 rent, £143.87 mortgage, I've got it fully managed so after management fee, insurance and boiler cover it nets £286.61pm

2-purchase price £75,000, 2 bed terraced, £475 rent, £122.81 mortgage, after fees, insurance, boiler cover it nets £298.9pm

Let me now if you want any more info on any of these, or if I can help in any other way :)

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Hey James,

Welcome to the forum! First off, you're in a pretty amazing position with that war chest haha. Where abouts are you're based?

Re your question about 6%+ yield, my answer is resoundingly Liverpool. I could wax lyrical about the city all day, but honestly I think it's the hottest market for property investment in the UK, especially in terms of prices vs. rental yields. Here's some stuff on the city you might find an interesting read:

I listed out some deals we've done in the city, too in another post if you want some concrete examples: 

Feel free to drop me a line if you have any more questions!

Best,

Jonathan

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@jamesguy85, agree with the comments & information provided by Matt & Jonathon above.

which towns/cities are you looking to invest & the type of property, houses or flats - would it be single lets, multi-lets, other?

would you be OK with leveraged investing, such as maximum mortgage to get highest returns?

also when considering any investment take into account the reward for risk as well as any nuisance factor if you are going to be a hands-on landlord.

my basic response to your OP question.

lets take a property of £100k, zero mortgage (not including legals, sdlt or any clean-up costs for now)

take the £100k, renting for £500/mth/£6000/yr gives you 6% gross, before deducting insurance, maintenance, management fees, voids/vacancy... other.

on a £100k property with a 75% mortgage, your equity/money at risk of £25,000, the gross return minus interest only mortgage could be 25%++ depending on the rent minus voids.

suggestion, look close to home, see what you can find within your budget in terms of property returns based on rental income.

Matt's hands-off model appears to net him £7026/yr on a 75% mortgage, his £36875 investment/money at risk = 19% net, which is really, really good.

when calculating actual return on investment, I believe folks should include all out of pocket costs/expenses, such as any agents fees, legals, sdlt, conveyances, appraisal, mortgage set up cost, fix, clean & repair etc before renting the property for £xxx

case by case, individual to individual whether they want to leverage an investment or take the risk in property investments.

Good Luck to you.

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On 10/15/2019 at 11:38 AM, jamesguy85 said:

Hi guys,

 

am new to the forum. any help much appreciated.

thx

james

 

I’m investing in a little town on the east coast, nothing major, I tend to flip properties but my previous two BTL purchases there are giving me 8% and 9%. Plus with the growth in that area has seemingly gone up a good amount the past 4 years I am even looking again to take more out for additional purposes.

Agree with all the other comments. But for me personally if you do enough research there are plenty areas throughout the UK which will give you +6%.

Best wishes going forward,

Jase

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There are other options. Housing is a good option for people who like the whole LL experience and this is a property forum - but it is not for everyone and there are other options.

The stock market, over time, averages 7% and if you are good (or lucky) you can do much better than that.

It is important to diversify to protect your money - I have a portfolio of property and an investment portfolio.

The Govt offers much better tax breaks on financial investments than property currently and there are other advantages such as taking small amounts of profit when needed.

My daughter is paying paying her own way through Uni from about 3 yrs investments into Fundsmith by way of a JISAs, which has returned 15-20% a year without needing a new boiler or paying SDLT!

Don’t become tunnel visioned and look for opportunities everywhere.

Good Luck :)

 

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On 10/15/2019 at 11:38 AM, jamesguy85 said:

Hi guys,

 

am new to the forum. any help much appreciated.

thx

james

 

James,

If you are looking at a freehold cash purchase, 6% yield calculation is a good starting point, but not the best way to consider a property or area.

I could recommend many places where 6% yield would be achievable.

If you are looking at using a BTL mortgage then I would seriously consider re-calculating your figures and show ROI - return on investment.

It is a much better way to calculate investments based on rental profit, rather than rental turnover agaisnt purchase price.

Hope this helps

Conrad Paton


Conrad Paton

+44 7957 959851

conradpaton@yahoo.co.uk

https://www.linkedin.com/in/conrad-paton-424446110

 

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