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chichi

Small Btl For Sale

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http://www.rightmove.co.uk/viewdetails-183...=2&tr_t=buy

A portfolio of six terraced houses, the majority of which are presently let on assured shorthold tenancies. Four properties in Moston, one in Blackley and one in Newton Heath, all with collective rents in the region of £26,500 per annum.

Portfolio £480,000

So the mortgage if you could get 100% at 5% is 2838.09 a month or 2000 IO

:)

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Why on earth would they sell all their tulip bulbs, I mean houses, at once? Values can only go up. Maybe the Prince de Conti wants his gold.........

Bursting bubble, stand back, women and children will be hurt.........

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http://www.rightmove.co.uk/viewdetails-183...=2&tr_t=buy

A portfolio of six terraced houses, the majority of which are presently let on assured shorthold tenancies. Four properties in Moston, one in Blackley and one in Newton Heath, all with collective rents in the region of £26,500 per annum.

Portfolio £480,000

So the mortgage if you could get 100% at 5% is 2838.09 a month or 2000 IO

:)

Gross rent £26,500

Less: fallow periods = 3 weeks a year per property = £1500 total

Repairs, gas certifications, energy survey = £750 per property = £4,500 (thats on the light side)

Buildings insurance = £1000 per annum

Minimum costs therefore = £7,000

Profit before interest charges = £19,500

As a long term investment I might be persuaded that prices will rise in the long term by the rate of inflation say 3% per annum.

I would want about 8% in total for the agro and risks involved. Therefore if long term property inflation is 3% then I would want 5% (i.e. 8% less 3% ) to come from income . i.e. capital growth gives 3% income gives 5% total 8%

Therefore I would at the very very best think that 19,500/5% = £390,000 would be the correct price to pay if I was a cash buyer

Almost all investors will have some gearing and as this will be expensive going forward I think a more realistic price reflecting the risks of borrowing would be in the £350k region.

Remember if you gear up your investment you need a higher rate of return NOT to pay the interest but to deal with the risk. Consider this. You buy this portfolio for say £390k with a £300k mortgage. You invest £90k of your own money. Prices slip by 10% and your portfolio is now worth £351k (i.e. £390k less 10%) your mortgage is £300k your wealth now £51k a fall of 39% because of a 10% downward movement in prices. If it fell by 30% not only would you then lose all your equity but you have to find the shortfall by selling your main home or other investments. The lender knowing it was a BTL investment will know or assume you must have other capital you could call upon. This is the risk of geared investments and this is clearly not reflected in the calculations of many amateur investors. We know that when prices rise gearing is very attractive but its downside is brutal and forgotten in the joyous rising property market we have enjoyed until recently.

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  • 294 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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