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  • FIRST POST
    nollag2006
    Where can I find the best rental yields ?
    • #1
    • 27th Jun 07, 12:08 PM
    Where can I find the best rental yields ? 27th Jun 07 at 12:08 PM
    I’m working in Milton Keynes at the moment (ahh, the glamour !!) and stopped on my way home in the lovely little town of Newport Pagnell.

    Looking in the windows of the EA’s there, it seems that 2 beds are going for £175 - £195k, with rents in the region of £600 - £650 pcm.

    This gives a rough gross rental yield of 5%, which is a lot healthier than around my way, and from a personal point of view, taking the long term view could work out to be a nice little earner.

    Does anyone know of a good website or reference source that shows regional or local rental yields?

Page 1
  • epz
    • #2
    • 27th Jun 07, 1:13 PM
    • #2
    • 27th Jun 07, 1:13 PM
    195K interest loan @ 5.5% is £893 so basicly you are loseing £293 a month, with capital growth unlikely due to rising interest rates.

    might want to look at the sums a bit first, throwing away £3500 a year plus maintainace and voids doesnt look like much of an investment.
  • KingKenny
    • #3
    • 27th Jun 07, 2:31 PM
    • #3
    • 27th Jun 07, 2:31 PM
    http://www.landlordtrader.co.uk/show_page.php?page=corporate_home_page



    Anything less than 7%, would not bother, put it in a savings account!
    • phlash
    • By phlash 27th Jun 07, 2:36 PM
    • 868 Posts
    • 621 Thanks
    phlash
    • #4
    • 27th Jun 07, 2:36 PM
    • #4
    • 27th Jun 07, 2:36 PM
    :rolleyes:

    Go for it Nollag, by all the indicators I can fathom, its a great investment. A 'nice little earner'.

    If you're going to play the game, at least read the rules.
  • nollag2006
    • #5
    • 27th Jun 07, 4:55 PM
    • #5
    • 27th Jun 07, 4:55 PM
    Keep holding out for the crash chaps – the last one was 15 years ago, there’s bound to be another one in at least 15 years !!!



    Anyway, back to the original question "
    Does anyone know of a good website or reference source that shows regional or local rental yields?"
  • wecanhelpu
    • #6
    • 27th Jun 07, 5:16 PM
    • #6
    • 27th Jun 07, 5:16 PM
    You sound like a smart lad, why don't you look at land registry prices and rentals on rightmove and work out the yield yourself.

    Don't forget there will be lots of "hidden" costs that you need to factor into your sums as well.



    But you knew that didn't you?
    • Gorgeous George
    • By Gorgeous George 27th Jun 07, 5:31 PM
    • 7,787 Posts
    • 8,466 Thanks
    Gorgeous George
    • #7
    • 27th Jun 07, 5:31 PM
    • #7
    • 27th Jun 07, 5:31 PM
    Where my BTL is located (NE), yields are only 6% at current market valuations (3 bed ex local authority around £80K mark; rental around £400 per month). Factor in voids and other costs and the actual yield falls (obviously).



    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
    • phlash
    • By phlash 27th Jun 07, 8:00 PM
    • 868 Posts
    • 621 Thanks
    phlash
    • #8
    • 27th Jun 07, 8:00 PM
    • #8
    • 27th Jun 07, 8:00 PM
    You can look at the rental rates on sites like Rightmove, but I'd knock off £50 the advertised rate. In my case, the advertised rate was £650, and we agreed on £560.
    If you are going to go ahead, I'd do your sums very conservatively.

    Oh and I get your 'yield' to be 4.46% at best! Which is better than most yields near you?! lol. Doesn't this just show how BTL at the moment is not a good investment?

    If you bought at £195,000 and achieved £600 your yield would be 3.69%. That is assuming 100% occupancy (no voids), doesn't take into account maintenance, your time, agency fees, buildings insurance, solicitors fees etc etc.

    I'm sorry, but if you don't realise that in the current conditions and looking at the numbers above that the case above is a "don't touch with a barge pole" BTL investment, then you really should walk away from your pie in the sky thoughts, and pat yourself on your back for not walking blindly into financial suicide.

    If you'd bothered to type in a few numbers into http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml you would have found that assuming a 15% deposit for a BTL the interest on a 5.5% mortgage for £165,750 over 25 years would be £759.68. The repayment amount would be £1029.71 on a repayment mortgage. So if you fancy paying (1029.71 - 600) £429.71 + agency fees + maintenance + voids etc etc per month for your tenant to stay in your 'make me loadsa money BTL investment' then go for it.

    On reflection, please tell me this is a wind up?!

    As for my tone in this reply, to be honest with you I make no apologies, cocky meets cocky.
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    • #9
    • 27th Jun 07, 9:18 PM
    • #9
    • 27th Jun 07, 9:18 PM
    Just another get rich quick wonderbrain.
  • deeber
    I know this is an old thread but I came to it via Google and it's an area that interests me so apologies for the necro.

    Why are you all assuming he needs a mortgage? I see nothing in the OP's post that suggests he was borrowing to purchase.

    Anyway, as an invesment, property offers the attraction of regular income plus the appreciation in property values (in the long term). Of course using mortgages to leverage is a dangerous game if the market/interest rates change drastically. But assuming it's a cash purchase, for those of you deriding the idea, assuming someone has say 200K to invest (to use the example from the OP) what are you suggesting is a better investment that will give around 5% income yield and still grow the capital?
    Last edited by deeber; 07-10-2010 at 5:21 AM.
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