Jump to content

Return On Investment of 10%-15%


Recommended Posts

Good day.

We all aim to get the greatest amount return from little investment. I aim for up to £70,000 properties. Ideally for a £50,000 investment you'd like £500 a month (£6000 a year). That would be 12% (minus 1-2% letting agent fees).

My background is a portfolio of 12 properties in England and Scotland. Some self managed and some letting agencies manage. I have a model that has been successful for myself and wanted to share this knowledge with others. I think there's a couple of things that investor's find daunting;

1. Purchasing in unknown areas. Although returns may be better, investor's still feel like its a risky strategy as its too far away. Some smaller portfolio investor's like to see their property (physically) and if any works need completing, accessibility and logistics may play a big part in this (if self managed).

2. The other thing are letting agents... I was one of those that would never use a letting agent for the first 6 properties. 'Why would I want to give 10-12% to someone in an office that can't do anything more than me... all there going to do is collect rent (as I do) and call me when there is a problem and I've got to figure out how to fix it... what's the point'. I am as tight as two paints of coat, and don't want to give any income away if I can help it.

Well, the truth is, if you have a decent letting agent they will pay for their Commission Fees in time with the assistance/competitive pricing and excellent service that they provide. I think it pays dividends to get the 'right' tenant in. The only thing I used to check when self managing is checking the existing addresses Garden and Windows for upkeep and cleanliness. This was my indicator of a good tenant or not haha. The checks the letting agents do are worth their weight in gold to secure the correct occupants of your property. I have also renovated and understand all aspects taken to complete a house, therefore aware of all costings. If you had a letting agent that could save you money on repairs would that sound worth it? I'll give an example, recently purchased a property that had condensation in all windows. Now, I'm not a glazier expert but usually means that they've had their day. After replacing windows at a 3 bed house at a cost of £2500, I was thinking, it's going to cost me. However, when I asked my letting agent what they suggest, they got a glazier whom replaced all windows for £350 all in... basically saved me a good amount, which has probably covered there fees for a good couple of years. Letting agents on your side is a rarity.

I have a model that works for buying and renting property plus any renovations that need doing. I have all the contacts in place, including the key player (the letting agents), as this is key to managing a property remotely and not having the headache. I have an aim of purchasing 1 property every one or two months to keep adding to my portfolio but I thought why not share this knowledge with others too. It's one thing calling a random estate agent in the UK and asking about a property of interest and what sort of rental they assume you may return and taking their answer as gospel. Its another seeing a live portfolio in that area supplying figures between 10%-15%. This is what I am doing.

If anyone wants more information, as there is far too much to share in this space. Feel free to contact myself and I can explain in more depth.

Regards,

Nick JPL

Link to post

These are some good tips. I have never self managed personally although I must admit it does sometimes become tempting when I see the amount of fees I am paying out each month, particularly when no maintenance is needed. I see it as insurance though for when something goes wrong.

Are your properties in different areas out of interest or do you build up a portfolio in clusters?

David M Slater ACMA 

Accufy Accounting  - Proactive accounting for property investors 

0208 242 4926    info@accufy.uk

 

 

Link to post

Good evening David,

Thank you for your message. I build up in areas so that I know the knowledge of it down to a T. I think self managing is OK if you have some time on your hands. But I think main reason is that we don't want tenants calling all hours of the night with issues etc. The idea is to get the right letting agent that is actually going to save you money and do repairs cheaper than you could get it done for. Then its worth it. Most letting agents want their cut, hence why prices are expensive for repairs and fixes.

Where are you based if you don't mind me asking? I'm in Glasgow.

Link to post

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...