BTL Returns

Generali

purch wrote: »

Generali is the only man who has people queuing up to question his signature.

I wonder what they will find wrong with it this time :eek:

As Mrs Generali likes to say:

If Generali says something in the woods and there is nobody there to hear it is he still wrong?

cells

its time to run for the hills!

Even with +2% to interest rates and the tax changes, as long as you buy at 5% yield or higher you wont go cash flow negative post the tax changes and that assumes a 75% LTV purchase.

Of course if you put more down or buy with cash its even less of a problem

PasturesNew

It might be the end of Homes under the Hammer as we know it .... with maybe some interesting episodes filmed in April-July of this year where they greet the new owner to discover what they didn't know/realise etc.

Many are caught out by unmortgageable properties, or not reading the legal pack where they're responsible for some seller fees/similar. There have been a couple who "didn't know stamp duty went up over £250k" when asked why they bid over £250k and won it uncontended.

It'll be interesting to see if any turn up with "we didn't know about SD...." although I guess a bunch of them might just default as they can't pay it after the event, so you'd only see those filmed who COULD come up with the cash from somewhere.

Generali

cells wrote: »

its time to run for the hills!

Even with +2% to interest rates and the tax changes, as long as you buy at 5% yield or higher you wont go cash flow negative post the tax changes and that assumes a 75% LTV purchase.

Of course if you put more down or buy with cash its even less of a problem

From what I've turned up it looks like 3.5% is more usual.

cells

Generali wrote: »

From what I've turned up it looks like 3.5% is more usual.

Your info is wrong most BTL even in London is at 4.5% or more. The 3.5% could well be the average rent in London vs the Average price in London but that is not representative of the stock renters rent.

If nothing else, the BTL mortgage sector for 75% down loans, limits buyers to no less than 5.15% gross yield due to rental cover and pay rate limits (the norm now is 125% rental cover at 5.5% notional rate which with 25% down = 5.15% yield)

princeofpounds

you wont go cash flow negative post the tax changes

You might be right - I haven't done the maths myself yet - but the bar for any investment is set a bit higher than cashflow breakeven.

Generali

cells wrote: »

Your info is wrong most BTL even in London is at 4.5% or more. The 3.5% could well be the average rent in London vs the Average price in London but that is not representative of the stock renters rent.

If nothing else, the BTL mortgage sector for 75% down loans, limits buyers to no less than 5.15% gross yield due to rental cover and pay rate limits (the norm now is 125% rental cover at 5.5% notional rate which with 25% down = 5.15% yield)

The two examples I used on the other thread (2 bed terrace in Clapham plus 2 bed ex-LA in central London) were remarkably similar in gross yield. I'll look up some more.

Generali

2 bed terrace in West Norwood for sale:

http://www.rightmove.co.uk/property-for-sale/property-37526580.html?premiumA=true

£475,000 asking price

2 bed terrace for let in West Norwood:

http://www.rightmove.co.uk/property-to-rent/property-56536013.html

£312/wk asking price.

Gross yield is 3.4% assuming 100% occupancy.

Generali

Queens Park

2 Bed maisonette for sale:

http://www.rightmove.co.uk/property-for-sale/property-54368348.html

£495,000

2 bed maisonette to let:

http://www.rightmove.co.uk/property-to-rent/property-39230877.html

£360/wk

Gross yield 3.8%

chucknorris

Generali wrote: »

Queens Park

2 Bed maisonette for sale:

http://www.rightmove.co.uk/property-for-sale/property-54368348.html

£495,000

2 bed maisonette to let:

http://www.rightmove.co.uk/property-to-rent/property-39230877.html

£360/wk

Gross yield 3.8%

Using my properties, basing the yield on what they would cost to buy, and the achievable rent, mine vary between 3.4% and 4.5%. I'm not claiming that is typical, but it is about what I would expect.