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Take me to the cleaners

Rental Yields

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I just saw this whilst doing a bit of New Year browsing, you know how it is.

http://212.50.188.108/cgi-win/vebra.cgi?de...1/WESTF/10291/1

So that I am completely clued up, and for all those others interested in the maths, does someone want to show me the maths on this one.

What would be the net annualised yield? Given the asking price and the rental income is it remotely possible that purchasing this could still be a good idea? If so does it mean the BTL market in Leeds, at least, is not dead?

Cheers.

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I think this is a bit of sharp practice by the agents.

(£920 * 12)/130,000 = 8.3% yield

BUT

This is clearly a student rental so I think you only get the income for about 40 weeks a year, which knocks it down to about 6%.

In reality 8.3% is a pretty poor yield anyway, it just looks ok when compared to other rentals.

6% won't even cover the mortgage.

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I think this is a bit of sharp practice by the agents.

(£920 * 12)/130,000 = 8.3% yield

BUT

This is clearly a student rental so I think you only get the income for about 40 weeks a year, which knocks it down to about 6%.

In reality 8.3% is a pretty poor yield anyway, it just looks ok when compared to other rentals.

6% won't even cover the mortgage.

A guy bought at an auction I went too recently, big converted house in Oxton Wirral. He paid 275K unopposed. 8 flats, all ASTs occupied. 30K income if fully occupied, no voids, small upkeep. Best buy I`ve witnessed in ages.

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I fail to see why anyone would consider an active investment which won't yield at least 10% (given property has to be paid from taxed income really it should be closer to 15%).

Back in Nov, I was looking to get into commerical property and i thought i saw an opportunity with a property Threshers were auctioning away, shop downstairs, seperate flat upstairs:

guide price £50-55k

annual rent £8k

so 14-16% yield seemed worth considering, but when i saw the property i was shocked... the upstairs was knackered and the thing had structural issues (probably £40k to put right).

anyway the property eventually went for £120k!! :blink:

damned fool must have bought blind and thought, oh! £8k rent per year - i'll be happy with 6-7% yield (after all capital gains will surely make up the profits? :( )

Threshers managed to offload a liability, make a tidy sum and arrange favourable lease terms. I don't know whether to feel really sorry for the guy, or to praise Threshers for cashing in at the right time

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I'd be rather suspicious of buying anything on the basis of existing rental yield. It'd be a little too easy to get high yielding tenants in especially to make the sale. £920 per month with £500 cash back would be my guess.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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