Self Employed Youth Posted April 29, 2012 Share Posted April 29, 2012 I've noticed a building come up. And the price seems very low compared to the rental yield. I'm sure it will fetch more than the guide, and that the yield will decrease. What kind of yield would you expect? Quote Link to comment Share on other sites More sharing options...
Wurzel Of Highbridge Posted April 29, 2012 Share Posted April 29, 2012 I've noticed a building come up. And the price seems very low compared to the rental yield. I'm sure it will fetch more than the guide, and that the yield will decrease. What kind of yield would you expect? 7% yeild allowing for 20% costs, voids etc takes you 19 years to get your money back (pre tax) , then you are left with whatever capital is left. If you are betting that house prices will fall then you might be willing to accept less than 7%. Likewise if you believe prices will fall, then you will demand over 7% gross yield. To me 7% yield looks like 25 years after tax (lower rate payer, no tax deductible mortgage interest), so you will need capital appreciation for it to be worthwhile. Assuming a £100k initial investment and 2% inflation in property prices (note japan) Your capital at the end of 25 years will be worth £160,843. So invest 100k at 7% gives you you £160k profit after 25 years (before GCT). Quote Link to comment Share on other sites More sharing options...
homeless Posted April 29, 2012 Share Posted April 29, 2012 That does not include the interest on the mortgage to buy the property. Property is such a very poor investment Quote Link to comment Share on other sites More sharing options...
Self Employed Youth Posted May 1, 2012 Author Share Posted May 1, 2012 (edited) First time I ever saw a Jew in Barnsley. They look like me! We spoke briefly, they were eyeing up the same property. Guide price £85k. Rental yield @guide price assuming current rent + hb lets = 25% (20k per year ish). I haven't enough capital to buy it. Could bid low or buy with mortgage, but no debt, no interest, no usury bar the tax upon the currency itself. Edited May 1, 2012 by Seasonally Employed Youth Quote Link to comment Share on other sites More sharing options...
Self Employed Youth Posted May 16, 2012 Author Share Posted May 16, 2012 It doesn't appear to have sold! Quote Link to comment Share on other sites More sharing options...
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