Buy to Let. How to get the best returns.
Buy to let. How to get the best returns for your investment
Buy to Let. How to get the best returns. Propertyspacesolutions.co.uk in Buckinghamshire are creating extra living space by converting your Rental property into an HMO quickly and cheaply. email gary@propertyspacesolutions.co.uk or call 07551756279
Many people over 55 have been accessing their pension pot to draw down money to invest assets which they hope will help boost their retirement income.
People have bought Houses to rent out, Some have bought Ferrari’s in the hope that they will become more collectible and thus more valuable.
Both are sound ideas if you buy right and keep ahead of the Market.
Buy to Let. How to get the best returns.
We have seen Second hand Ferrari prices jump considerably over the last 12 months as people sought to invest in these cars, also probably realizing a lifelong dream to own and drive one. Just be aware that the only reason these cars have appreciated is because so many over 55’s got their hands on some cash and thought to buy one.
When the economy takes a downward turn, these cars will be the first thing put back onto the market and the prices will plummet, therefore it would be wise sell while the going is good.
Others have put their lump sums into property. I have seen those who have bought up north for cash, and those who have used the cash as a deposit and sought a buy-to-let mortgage to fund the balance.
Let me highlight 2 such investments.
- 3 bed terraced House bought in Rotherham for £70,000 cash. Tenanted at £425pcm
- 3 Bed House bought in Hounslow for £400,000 with £70,000 deposit and £330,000 mortgage at 3.25% interest. Tenanted for £1,600pcm
Ask yourself, which is the better deal?
We can all be spin doctors and use % returns and highlight the best deal in their eyes.
Deal 1. Generates 7.3% Gross yield. However, take out Letting Agents fees, annual Gas safety certificate. Tenant deposit scheme fee and maintenance, then it doesn’t look so rosy. This is a House that won’t appreciate much in capital value. The House is 100yrs old, so when it comes to replacing the old slate roof tiles, which will cost around £3,500, That’s more than 8 months rent.
Deal 2. They paid £22,000 stamp duty. £10,725 pa interest only mortgage. Or, £1,609 pcm repayment mortgage (£19,308 pa). They receive £1,600pcm rent (£19,200pa). The income tax will be £3,840 pa. Mortgage interest rate is now eroding by 25%pa and by 2020 will not be able to be claimed as a taxable expense. This leaves £15,360pa of which the mortgage payments have to be met.
This investor is either left with £4,635 pa if an interest only mortgage and still has to find £400,000 in the future. Or has to subidise the mortgage by £3,948 pa if on a repayment mortgage.
In my opinion neither is a good deal.
Novice investors like to buy property that is local to them. They tell me, ‘they like to keep an eye on it’. WHY? Do they think someone is going to steal the bricks?
Buy to let. How to get the best returns for your investment
Think Global. The UK government has made it very difficult for private Landlords to make money but Somewhere in the world at any one time, the property market is booming. Hong Kong, Singapore, Australia all had their growth spurts and now Myanmar, Thailand, Vietnam, Philippines, Dubai and Malaysia are growing.
Buy to Let. How to get the best returns on your investment.
If you would like to know how to invest in property in other countries and create yields of 10%-15%pa Follow us and watch what we do. contact gary@propertyspacesolutions.co.uk. learn how to ride the trends.
