What sort of yield are you getting on rentals.
Discussion
As per the title really, just looking at buying a place to rent out, and am curious as to what yield I should expect, I do read some people who say that they are achieving around 8-9% but is this really possible.
Might add that I am looking in the south east region, if that makes any difference.
Might add that I am looking in the south east region, if that makes any difference.
Some interesting numbers in another thread: http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Apparently the US market offers opportunities for yields close to 20%.
No experiece here, just the interest.
Apparently the US market offers opportunities for yields close to 20%.
No experiece here, just the interest.
FlashmanChop said:
Voids and costs very very low.
manage them myself, best had no void period, tenant moved in prior to paying first finance payment.
Sorry, didn't mean how do get the yields high, more after the figures of how you obtain such yields.manage them myself, best had no void period, tenant moved in prior to paying first finance payment.
Basically, are you buying at such a low figure and obtaining maximum rentals, or is there another way to get these yield figures.
Myself, I am buying cash, managing myself, and hopefully moving a tenant in as soon as a property is found, ( basically I have one waiting ).
steve1 said:
Should also have asked, are these yields on residential properties or commercial?
Steve,very cheap properties, (Hull, Northeast etc) and a very energetic lettings agent, who finds, and vets them.
Rents I ask are not stupid, but becuae I have bought at the right price, this assists.
I think I aspire to the Groak model of business! The Man is a legend.
FlashmanChop said:
steve1 said:
Should also have asked, are these yields on residential properties or commercial?
Steve,very cheap properties, (Hull, Northeast etc) and a very energetic lettings agent, who finds, and vets them.
Rents I ask are not stupid, but because I have bought at the right price, this assists.
I think I aspire to the Groak model of business! The Man is a legend.
Of course the other BIG boost currently are the DSS rents. Still chunkily above what's privately on offer from tenants in my area, which is odd, because DSS rents are supposedly based on stat from the private market. In fact years ago we used to get survey style forms to fill in and send back to the local council giving them data on private rented property.
What about after 50% income tax and inflation? (what is the real money I can go and spend return?) Then capital gains tax when you sell if they ever rise again! Always get the feeling that using a property fund is less aggro and more tax efficient. Had a 68% return on mine since December 2009
Edited by F458 on Wednesday 2nd May 17:18
Edited by F458 on Wednesday 2nd May 17:20
www.themansiongroup.co.uk/mansion-student-accommod...
I am NOT advising anyone to invest just speaking as I find. The only reason that I went with this one was because it is specific student accommodation only fund. i.e. purpose built blocks for students and it is not too highly geared. You tend to find that these funds start getting too big and underperform the rest of the market after about 5 years from launch so this one still has a few years left in it. It is not fully regulated by the FSA, it is not an UCTIS II or III fund or whatever it needs to be but these guys do it properly and you can see and feel their properties and they seem to have oversupply of students mainly from abroad. I have an offshore bond which holds this investment for me so I can take 5% tax deferred for 20 years whilst I sort out myself tax wise. Its a 'plodder' and will be interested to see what the April return is which we should know any day now. I have nothing against buying physical property but I don't have the time or the patience to deal with improvements/tenents/void periods/buying and selling them. This fund deals once a month so if I want to disinvest today I get my funds back in the first week in June so its fairly liquid too.
I am NOT advising anyone to invest just speaking as I find. The only reason that I went with this one was because it is specific student accommodation only fund. i.e. purpose built blocks for students and it is not too highly geared. You tend to find that these funds start getting too big and underperform the rest of the market after about 5 years from launch so this one still has a few years left in it. It is not fully regulated by the FSA, it is not an UCTIS II or III fund or whatever it needs to be but these guys do it properly and you can see and feel their properties and they seem to have oversupply of students mainly from abroad. I have an offshore bond which holds this investment for me so I can take 5% tax deferred for 20 years whilst I sort out myself tax wise. Its a 'plodder' and will be interested to see what the April return is which we should know any day now. I have nothing against buying physical property but I don't have the time or the patience to deal with improvements/tenents/void periods/buying and selling them. This fund deals once a month so if I want to disinvest today I get my funds back in the first week in June so its fairly liquid too.
F458 said:
Always an option, but I assume with a Ltd it's potentially risky and they seem to focus on high price / low yield central London property (even if demand is high).chris7676 said:
Apparently the US market offers opportunities for yields close to 20%.
Depends on your buy in price. We just closed on a property in an average area at $14.2k after all costs. The renovation cost (doing it ourselves), including have central air fitted will put us in at around $22-23k. It just rented for $700pm. Tax and insurance are about $700 each, and we are beating the 9 month average tenancy.The value of the house rebuilt is already into the mid 30s/low 40s, and will probably be worth $55-60k when the market stabalises again.
We have a recently closed property that needs around $6k invested in it. Bought all in for $26k, will rent for $800pm, and the estimates as a completed property are between $60-80k. Zillow puts it at $110k which is hugely over the top, but good for the ego.
Another property we added to our portfolio was $41k with a long term sitting tenant happily paying $750pm. We had to pay more than we want to make sure we got, would have preferred the $38k we offered, but it was a short sale and bank wasn't having any of it.
After the properties above, we are adding another 3 to our portfolio here. The market here is a blood bath, but you have to know the areas well (avoiding the hoods), and you have to play with cash. Banks are not interested in lending to investors at the moment. I have a feeling our area is extreme though, and there are plenty of investors hanging around. You need a good buyers agent and ability to move on the spot.
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