Glasgow BTL Yield

[Salgar]

Continuing on from the other thread, I had no idea you could buy property anywhere in the uk that was this cheap.

There look to be decent (on the inside) two bedroom flats to be had for £30-£35k

Looking at the sums:

£35000 Flat =
£26000 Mortgage +
£9000 Deposit

£400 Rent/month -
£60 - 15% Management fee -
£122 Mortgage payment =

£218
£218 * 12 = £2616

£2616 / £9000 * 100 = 29% Yield

Or even £2616 / £10000 = 26% Yield (With fees + paint etc)

This sounds too good to be true?

Obviously there are the risks of no tenants, tenants not paying etc, but with a good management company and well vetted tenants to minimise these risks this seems like an interesting proposition?

Am I missing something?

[Salgar]

Sarnie said:

Salgar said:

Am I missing something?

Yes. Most BTL lenders have minimum property values of higher than £35k.

I don't think that's true, I just found 3 different lenders who have a lower minimum than that.

[Salgar]

Sarnie said:

Salgar said:

I don't think that's true, I just found 3 different lenders who have a lower minimum than that.

Really? Who?

Not one lender

Natwest = £50k
BM Solutions = £40k
Kent Reliance = £100k
Woolwich = £66k
Abbey = £75k
TMW = £50k
Aldermore = £75k
Accord = £100k
Clydesdale = £125k
Coventry BS = £75k
Leeds BS = £50k
Virgin = £40k
Skipton BS = £50k

Not one lender I've looked at this morning would consider a £35k property.....

http://www.hsbc.co.uk/1/2/mortgages/buy-to-let-mortgages/buy-to-let-mortgages-eligibility

25k minimum loan - nothing about value afaik