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  • Property Training/Mentoring

    Seeking an experienced Property Mentor

    Jay 

    Unless you have any more cash or you can make money out of the property that you are purchasing by adding value to it and then having it revalued and taking out any equity that you have built up in it then unfortunately your only option is to sit and wait to build up funds for your next to buy your next purchase. 
    I’m assuming that you are buying the property on a buy to let mortgage paying a deposit equal to 25% of the total value. 
    Are there any cheaper properties locally that you could purchase instead and may be do up to add value to them ?
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    Jamie,

    I have been looking for a while now for a property. There isn't much I can see for doing a referb. I chose Southampton because it is only about an hour away for me so I could go and visit properties every other weekend. Which I had been doing.

    As I am not very experienced I don't want to get into referbs just yet. I am concentrating on the vanilla BTL at the moment (boring I know). 

    I guess my plan is to save for my next deposit and possibly purchase up north so I can purchase something quicker. 

    And yes I did use a mortgage and 25%deposit. 

    Kind regards,

    Jay
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    Hi Jay 

    As the other two commentators have already suggested this doesn’t look like a great deal. What are the monthly ground rent / service costs and does this include insurance ? 
    I try to buy really cheap as your money get eaten up by the deposit very quickly. I’d have a proper look around and think about this very carefully before you dive in and buy it. 

    Janie
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    What is the lease on flat what’s monthly charges? I’d be suggesting not to buy a flat personally and that return isn’t great
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    Law,

    I have a spreadsheet which I do my calculations on and the end ROI on my cash invested is around 6-7%

    Kind regards,

    Jay
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    So your purchasing a leasehold flat thats for £134k with a 25% deposit = £33,500, leaving u with a £100k mortgage giving u £9k a year gross with all the charges / mortgage payments / insurances etc to come out of that.

    You say 6-7% yield, to me its seems a complete waste of time, u have minimal capital uplift, no extra sqft can be created for enhancement value, rent over time is prone to falling with increased rental stock in the market,

    and you have also put in £33,500 plus costs of buying it.

    You wont any equity release in it for years to use as re-investment deposit for another unit, so basically i would refrain on the purchase and build up a larger deposit and go for a unit that at least gives u a fair crack at

    a enhancement capital increase ( loft conversion / rear extension ), with capital growth and you then stand a good chance of attaining a 2nd one quicker than this route you have charted.



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