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  • Buy-to-Let

    Best income strategy - £100K deposit?



    Hello,

    I know similar threads have popped up before but my question is a bit more specific. Please can you give your opinion on how and where best can a £100k be utilised for maximum  income , based  the following criteria

    - no HMO style room by room letting

    - single AST lets only e.g a 2 bed flat or house rented to a single family

    - can be easily outsourced to a mainstream letting agent on a full management basis

    - areas with high and regular rental demand

    1.are there any areas offering 10%+ gross rental yields as a norm? And are there any areas which are likely to have stable 5% capital growth per annum

    2. If so what would be better: buying a single property for 100k cash generating 10k per annum or splitting up the 100k deposit in to 25k deposits and buying 4 100k properties at 75% loan to value?

    I would like to know what's the best income I can make in a "hands off"/passive way (I know it won't be entirely hands off) in the UK via fully managed letting agent.

    Thank you

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    Depending on your risk taking behaviour.

    High risk

    Buy with leverage 75% LTV but you are only going to afford 3 at the most as each 100k property will require at least 32k cash with all expenses in.

    Low risk

    Buy with cash on 1 property.

    Sunderland, Middlesborough could easily get 10% yield, not net profit.

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    Hi thanks but how have you calculated 32k in buying costs? 100k is £3k stamp duty as a 2nd home owner and let's add 1k for solicitor fees. That's 4kish x 3 so 12k.

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    Oh I think you meant 25k + buying costs = 32k per 100k purchase?

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    yes that is correct. plus Survey, mortgage fees, some refurb costs allowance etc.

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    Depends what your long term plan is and assuming that you have done all your numbers with new tax  changes.Putting 25 percent deposit for 4 properties or 100 K for one single house in a 400 K property means your capital appreciation will be on 400K instead of 100 K. .

    Few Manchester post codes might still give you good yields but Not that great appreciation unless you hunt a below market value deal or get some forced appreciation by light refurb.

    I would personally prefer bit of cash and decent Capital appreciation too so you are safe both short and long term.

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    Ok great could we narrow down which areas you can buy something for 100k and get close to around £1000pcm rent? (I realise this is a bit more than 10% yield per annum) and ideally somewhere where we can assume 5% capital growth per annum I.e. 100k house being worth 105k after year 1.



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    Personally I don't think there are any areas where you can buy something for £100k and get around £1000pcm in rent, unless you go down Multi Let (rooms) HMO or SA route.

    If someone knows anywhere I would be happy to be proved wrong, £550 - £750pcm is more realistic if single let house even that's on the high side.

    What I would say is that I would avoid leasehold flats as many have service charges and ground rent which range from £600 - £1000 per annum that need to be taken into account.

    I would look into Warrington and it's suburbs having lived just outside in a small village for a number of years until recently, it's one area where I can see some capital growth with past, recent and future investment into the area https://www.omegaopportunity.com/development/

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    Here's one in Aberdare - £99,995 with £12,500 gross income.

    It doesn't state whether its freehold or leasehold, but many of these mixed use properties in South Wales are freehold.

    https://www.rightmove.co.uk/commercial-p...92606.html

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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer

    Hi if it's hard to find 100k houses which give 10k per annum on a single let could anyone suggest areas where maybe 75k freehold properties get 7.5k per annum rent?

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    In Teesside 6600 a year for 70k is very doable

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