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  • Buy-to-Let

    A true lesson of BTL from the North East ...

    Agree with you that it is NOT the EU's fault - disagree that by leaving they will suffer anymore than they are today.......

    the country was around before the EU and will easily survive after we leave - infact if we can build up our confidence in our nation then there is no reason why we cant thrive - lets not forget - the EU is a failing project....

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    The EU has about double the minimum wage of this country, strong workers rights and high food standards to protect the middle classes.

    This country has dismal minimum wages eroding workers rights and food standards and a shrinking middle class. 

    What failing EU project are you talking about???
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    Does the EU that you are talking about include Spain, Italy, Greece, Portugal - let alone the East European Block of countries?

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    No, just like the UK is not only the north East
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    Clutching on straws I am afraid.....the similarity is in the fact that they are both "unions" - when you double click however they are worlds apart. Nevertheless, you are entitled to your view.

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    We have the same food standards as the rest of the EU.

    The EU does not have a minimum wage.  Most of the members do, many are lower than ours.

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    So based on Vanessa's High Wycombe example...

    House value: £450k
    Annual rent: £18k

    This returns a gross yield of a mere 4%.

    DL based on your minimum 8% criteria, would you deem this a bad investment?

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    4% yeild is very low in my opinion

    all it needs is the Council to bring in a Licence or major repairs or a none payers and it could run at a loss

    not to mention S24  Taxation

    but when it was purchased at 147k its in now a good yield today

    But it would be a poor yield if it was purchased at over 300K

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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.

    OK let’s assume hypothetically a mortgage with 75% LTV at a rate of 2.5%.

    Interest only monthly payments of £703. Or £8436 a year. 

    Minus that from the annual rent of £18k and let's say an additional £1k for insurance, repairs, etc and that still leaves an £8.5k buffer to allow for licence fees, major repairs, voids, interest rate rises you name it.

    This is all not even factoring capital growth which we all know is likely to happen. 

    ​I fully appreciate a 4% yield won’t work for you in your area but I’m amazed at how someone of your experience can’t see how a BTL could be profitable in the South.

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    For a Business Plan I would not use 2.5% interest rate

    I would use 5% to 6%

    and I would factor in S24 if I was buying in my own name  and councils are looking at Licance for every property in the uk  by the looks of it

    Costs are going to rise for all of us one way or another

    Thats why I set my yields high at 8% in preparation for more costs



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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.