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  • Buy-to-Let

    Gross Yield

    Hi all,

    Gross Yield -  Is it the property purchase price / annual rent.
    Or, current property value / annual rent.

    Also- what percentage should i be aiming for a single BTL (2 bed terrace) in the South East.

    TIA

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    It’s whatever you want it to be.
    If it’s a recent purchase, it is based on the pp.
    If you bought some time ago, and prices have increased substantially, I would work on current value.

    What you should be aiming for is whatever makes you happy. The net yield is more relevant as this shows YOUR actual cash flow. Around my area 5% gross is around the norm. Not brilliant but better than 1 1/2% in the bank.
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    Hi MiaS,

    Yes, what Gary Said. It all depends on what you want to work it out against and if you have just recently purchased the property etc. Again, the percentage is completely down to what you are looking for and what you would like to achieve. Do you have BTL property already or are you looking to buy your first investment? Where about in the south east are you looking to buy?

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    I like to look at what the yield is compaed to what someone is offering me for a property. If I believe I could reinvest the sale proceeds and get a higher yield, then a sale is worth strong consideration. My purchase yield may be higher but whats the opportunity cost of keeping my money where it is as opposed to earning a higher yield elsewhere? This really only works if you are sure of an offer at a set price but you can still play the game if you have got yourself an honest valuation.

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    I always use total cost inc auction fees solicitors refurb and aim for 8% plus but I’m in north east not much capital growth here and most I have are about 10% some as high as 18% but higher yield usually more risk and areas aren’t as good
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