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  • Property-a-holics

    Loan vs non-loan investments

    I've been more interested in non-loan deals in the last couple of years as I'm not really wanting to take on more debt.

    Therefore I've been looking at investments that are 'cash only' deals such as:

    Purchase for £20k.

    Rental is: £2k pa.

    So giving a simple yield of 10%. Practically no on-going costs thankfully.

    'Payback' is 10 years. I'm all about ownership at the end of the term, which is where I have the chance to re-sell the asset and use my annual capital gains allowance etc.

    On the above type deal I'm looking for the asset to have doubled in value in that time as well. This is an important factor or I pretty much move on to the next unless I can see a way to add value.

    I like simple deals like this as you know where you stand right from the start. No going cap in hand to lenders etc. etc. but probably not the best use of resources?

    Does anyone else have low-value (let's just say sub-mortgage £50k) investments/assets where they don't bother unless it's say 10%, or do you work to other figures depending on what is the investment?

    Thanks.

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