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  • Property Yields

    High cash flow properties & strategies



    I am looking for high net cashflow properties and wanted to get some guidance on the best approach. I am looking for properties with net cash flow of at least 2000 a month and have a number for ideas which I would like your thoughts.

    Ltd company: give mortgage tax relief is being ended there seems to more benefits buying via a ltd company (exempt from stamp duty, exempt form mortgage tax relief) so would this be a good way forward? is capital gains tax mitigated?

    tractional buy-to-lets: I don't think they will give this cashflow unless you are looking at properties in prime locations which would be expensive?

    small multi apartments (4-10): This seems to be a viable option appreciate your thoughts

    welcome to other views

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    Ltd is not exempt from stamp duty. 

    There are pros and cons about ltd. all depending if what you want and the model you want to follow. 

    £2000 a month are we talking about one property or many. Is it before mortgage expense or after. 

    Are you fully aware of the risk of high yield properties??
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    thanks Graa, I believe it is exempt if you buy a number of properties at the same time?

    £2000 would be net cash flow per property before mortgage expense

    I understand traditional buy-to-let risks, how do they differ from high yield ?

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    High cash flowing properties are the "Holy Grail" for investors at the moment, and rightly so in the current market conditions.

    These would include HMOs, holiday lets, blocks of flats, and low value properties that achieve a good rent.

    When you find a property that delivers £2K net cash flow per month, I suggest that you start a course and ask for £2497.00 to get hold of your secret! Smile

    Joking aside, there will be some HMOs that deliver this, but they will be few and far between.  A holiday let might deliver it in June/July/August but would struggle the rest of the year.

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    HMOs are a good way of creating high yielding properties.

    £2k per month net cash flow is certainly achievable with 6 or 7 bed house shares.
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    Rooms In Cardiff info@highyield.property | Guaranteed RentSingle Let Management £50/month |Cardiff HMO Management | Cardiff Letting Agents & Property Managers | Delivering Double Digit Net Returns

    Rent Smart Wales Agent Licence Number: LR-37010-29907

    The Property Ombudsman: E1405 

    ICO: #ZA276375

    We operate Client Money Protection

    Bestmanuk, are you looking for ready-made set up properties or are you going to do everything yourself?

    If the former, you'd have to ask why someone would be wanting to sell an ongoing property that is high cash flow? If someone has set it up from scratch they wouldn't be wanting to let it go cheap?

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    thanks Adam, I am looking for proven history of the property achieving high yields on an ongoing basis

    after my previous experience all this would need to be verified independently including contracts as there is a lot of dog doo out there

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    There is a reason people have not found the Holy Grail. It does not exist. And nor does a property which gives you everything you want which nobody else wants. You are competing in a market and so you will have to outpay others thereby reducing your yield or forcing you to walk away.

    And by the way there are reliefs not exemption from SDLT for multiple purchases in the same transaction. It still costs.

    I’d be sceptical before you are confident.
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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022

    Some ball park figures for 6 and 7 bed hmos in Cardiff

    6 beds generate £2700 rent per month

    7 beds generate £3150 rent per month

    Monthly costs excluding mortgage costs are about £500 per month.

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    Rooms In Cardiff info@highyield.property | Guaranteed RentSingle Let Management £50/month |Cardiff HMO Management | Cardiff Letting Agents & Property Managers | Delivering Double Digit Net Returns

    Rent Smart Wales Agent Licence Number: LR-37010-29907

    The Property Ombudsman: E1405 

    ICO: #ZA276375

    We operate Client Money Protection


    I fully understand how HMO work and why on the surface they make money

    But I have never underestimated the management time it involves.  I have Friends who do up market HMO and I think they really run a Hotel operation

    The costs of keeping up standards is costly new beds new decoration etc etc ,  if you wish to say away from a doss house

    I see huge regulation from councils and I often think "yes your making a good yield but how much is the net yield after all costs say over a five year period"?

    You are also dealing with maybe five or more tenants in one house If you get one that is a major problem you could end up being piggy in the middle with the rest of the tenants

    I see In Newcastle HMO which were good money earners now becoming liability with the expansion of student blocks ect

    My other concern with HMO is who is going to buy a completed property which is sold on say in 15 years time

    It's a fast changing market from what I can see and you could end up with a Large house converted in to and HMO which is no longer required due to market changes and really if you cant sell it , you are then stuck with a very large house where families wont buy because of lack of gardens and parking and garage space

    Give be a 3 bed house anytime with an 8% yield  and I know its easier to run and can be sold easily to a range of buyers

    I won't even buy flats now because they are more work than houses  - very few voids and long staying customers who don't move on

    I wish anyone the best of luck with HMO - I think its a lot of work !

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    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.