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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.
Depending on your risk taking behaviour.
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.
Buy with cash on 1 property.
Sunderland, Middlesborough could easily get 10% yield, not net profit.
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.
Oh I think you meant 25k + buying costs = 32k per 100k purchase?
yes that is correct. plus Survey, mortgage fees, some refurb costs allowance etc.
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.
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.
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/
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.
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?
In Teesside 6600 a year for 70k is very doable