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Hi Phil,I don't think 20% returns are realistic, but they are achievable.We have a recent discussion on this here >>> What is a realistic ROI on property?Always worth mentioning that, with higher returns, comes higher risk. You need to ask yourself .... Are you experienced enough to mitigate that risk? Do you want the extra hassle? If you want to be less "hands on" , then the returns will definitely be far lower.This thread may also assist:Which property type offers the best potential ... Hope that helps for starters?
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We have HMOs delivering gross yields in excess off 20% but once you factor in management fees etc the net yield would be mid to late teens.
So I don't think you will achieve your 20% yield goal with HMOs, unless you are hands on
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I've been contacted by an agent with a property that is on the open market for £65K in one of my investment areas.
Without PP rent achievable is £950 per month
With PP permission for HMO £1350 per month
Paying the open market asking price would deliver gross yield of 17.5% to 25% so you may net your desired 20% yield or not far off. If you get a lower asking price agreed its certainly achievable.
Hello High Yield Property, am I understanding correctly that you rent out a 65k property for £950 pcm? I'm assuming this is an HMO then not a single let? What would net rental look like after all costs? I'm just trying to understand as these figures sound crazy high! Thank you
It seems like it is taking longer for properties to sell and lenders are making it much harder to borrow - down valuations, PRA, Stress Tests, etc....
Not if the £ drops further & property prices weaken because of....
Yes 20% return is not a problem for a single let
You can do much better though
Buy a 100K unit @ 75% LTV so 25K down ( plus costs / fees etc )
Rent for 600 pcm = 7200 pa ( 29% gross return)
Price goes up 3% pa = 3000 1st year ( 12% gross return
ROI gross on your 25K is 41% ( minus costs / fees etc )
And thats before we even start talking abut buying BMV or adding value
Jonathan Clarke. http://www.buytoletmk.com
I just had a quick look on my last purchase and I am returning just under 20% on capital invested
But I did buy with a Tenant so I used the currant rent if I had a New Tenant I would have achieved around 28% on a market rent
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.