Anyone know end figure guestimates for property?

[twoblacklines]

Say I buy a house for £80k

And estimate letting rate is £500/month.

Which is a 7.0% yield.

What are the end figures ie what goes into my business bank account from this after agency fees etc?

Something like this looks attractive sub £100k http://www.rightmove.co.uk/property-for-sale/prope...

I rent so technically no second home BTL tax??? On the first anyway.

Would be buying in cash with view to leverage by mortgaging it to build a portfolio if there is actually any money to be made through BTL anymore in non-London areas?

Is there any insurance in case the people who rent it, smash it to bits or set it on fire etc when they move out or one of the other horror stories...is this the letting agents responsibility as they found the clients? Or should I skip an agency completely?

Thanks

[madmover]

Not for me
14 crimes committed last month on or within a 1 mile radius of that road

House looks fine but you have the question the probability that you'll have some headaches along the way

[loafer123]

Professional PRS operators work on the basis that 28-30% of gross income leaks in fees, maintenance, voids, sparkle cleans, gas inspections etc.

Your mileage may vary.

[KevinCamaroSS]

twoblacklines said:

What are the end figures ie what goes into my business bank account from this after agency fees etc?

I rent so technically no second home BTL tax??? On the first anyway.

If you are buying through a limited company then no personal stamp duty lower rate can take effect. Stamp duty at the higher rate will apply. The lower rate is for purchase of a property privately to live in.

[covmutley]

twoblacklines said:

Would be buying in cash with view to leverage by mortgaging it to build a portfolio if there is actually any money to be made through BTL anymore in non-London areas?

Forgive me if I am missing something, but this doesnt seem a great investment, but am saying this in case i am missing something!

£500 month, minus 10% management fees =£450, minus say £50 month insurances? minus £100 month ongoing repairs =£300 month. This drops yield to about 4.5%.

That is before void periods, solicitor fees, any major repairs like central heating etc.

Sticking the cash in some index funds should (historically based) bring 8 or 9% growth. For no bother or hassle.

I suppose the bit i am missing is the capital appreciation, which has been very good on property for a decade or so.

[22s]

covmutley said:

Forgive me if I am missing something, but this doesnt seem a great investment, but am saying this in case i am missing something!

£500 month, minus 10% management fees =£450, minus say £50 month insurances? minus £100 month ongoing repairs =£300 month. This drops yield to about 4.5%.

That is before void periods, solicitor fees, any major repairs like central heating etc.

Sticking the cash in some index funds should (historically based) bring 8 or 9% growth. For no bother or hassle.

I suppose the bit i am missing is the capital appreciation, which has been very good on property for a decade or so.

It's actually an okay investment (IMO) if it's a cash buy. Once you refinance, the numbers start to look at lot worse. Assuming 12% mgmt fee, £1000 expenses per year (insurance, repairs), £1000 legal costs for the purchase, £2.4k stamp duty, and 75% LTV at a conservative 4% interest rate you're looking at a pretty shoddy 2.35% net yield (even at only 60% LTV you're looking at 2.9% net yield). Cash buy you're looking at 5.5% net yield.

The above doesn't take into account furniture costs (if you will furnish), any redecorations, firm alarms, tenant referencing, etc etc.

Depends on your goal and how long you plan to hold the property - but I would personally be looking at more profitable property strategies.

Oh, and to answer your question:

Cash buy: £4.2k in account at end of year
75% LTV: £1.8k in account at end of year
60% LTV: £2.3k in account at end of year

Then you need to pay tax!

Edited by 22s on Thursday 29th June 06:39

[zombies]

madmover said:

Not for me
14 crimes committed last month on or within a 1 mile radius of that road

House looks fine but you have the question the probability that you'll have some headaches along the way

Lol 14 crimes in a month
Where do you live, the moon.
14 is nothing
I know people who have never had a problem living in an area getting probably 1000 a month.

[tight fart]

If that house was around here (London Essex boarders) it would fetch £300k and maybe £1200 pcm, funny old world.

Edited by tight fart on Sunday 30th July 07:02

[williaa68]

I'd rather leverage into a portfolio of VCTs. More liquid, good tax free yield. The challenge is finding a way to do it and get the interest tax deductible but with those rules changing on BTL I think the advantage of BTL is disappearing...