X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Property-a-holics

    Yield vs. cash return

    The recent discussion between ncooper and dislexic landlord on 75% LTV in the SE has highlighted quite an interesting fact.

    Whilst there is a lot of talk about yield that is merely a headline figure.  ncooper spends around 10% on maintenance and DL spends around 30%.  The big differential does not appeared to be caused by ncooper neglecting his properties (my own spend is around 15%).

    I believe the difference is large caused by property values.  E.g.  if you own 1 property worth £300k you will need to 1 gas safe done per year, 1 boiler replacement when it finally goes, 1 refurb when required.  If you own 5 properties worth £60k each you will probably get a higher yield but with 5 gas safety checks per year and 5 refurbs when required etc.  the net amount remaining in your pocket may not be so different.  In addition the higher value property in the SE will more likely benefit from extra capital gain.

    0
    0

    Thanks for these insights Paul.

    For ease of reference, you are referring to this discussion:

    Does 75% LTV still work in SE on single let? 

    This topic was also addressed in this thread:

    Why higher value properties are better

    0
    0

    > ncooper spends around 10% on maintenance

    I actually spend a lot less than 10%. It works out around 3% for me. DL spends 30%, but I guess this is skewed due to her gross rents being a lot less then mine (per unit)


    0
    0

    I budget for 30% for Repairs and Management Insurance Travel cost ect ect

    I am very proactive on repairs

    I have to sorts in my own mine

    1 Every day Breakdowns and repairs like a boiler

    2 What I called scheduled repairs ie a new roof replacement gutters New Boilers better insalatlation Fences Gardens Paving drainage

    Rewires ect Going back to a property that is a void is a really good in my opinion doing the update and then charging a higher rent

    I quite enjoy this part of being a Landlord and I just give myself the cash to do it

    Is it not better to spend on repairs than pay 45% income tax

    I feel its a win win win

    Customer Happy

    Property is in better condition so value is better

    HMRC Bill reduced

    and the great thing is Customers recommend me because I am a good Landlord

    I have a guy working for me today who rents off a Landlord I know and he wont spend a penny on a repair

    The guy has asked me for a home so again I win

    Getting a good reputation is all I seek I know If I provide good homes I get a good customer

    I don't see repairs as negative I see it as opportunity to run a better business

    Of course I can afford to do it I don't live on a shoe string so it works for me

    30% is every thing other than Interest Charges

    I hope that makes it clear LOL

    0
    0

    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.


    You have just justified my argument for buying flats!

    I pay £60-120 pcm service charge and all of the above are taken care of.

    0
    0

    Yes but turn over on flats in general is higher than houses

    I much prefer housed every time or TYNESIDE flats with no service charges

    with houses you can add value exstentions loft conversions ect

    and I don't deal with a Landlord

    If your clever you can buy houses with a large Garden and build a new House I have done this more than once

    You get control of Houses if your leasehold you have to consult landlords ect

    I have city centre property and I find Service Charges go up higher than inflation and you pay ground rent

    I wish personally I had bought Houses and not flats in the past

    Tyneside flats are terrific I don't suppose you have come across them in the South

    0
    0

    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.

    I guess flats or houses comes down to location. I am comfortable paying service charge as long as the block is property looked after, incidentally I now have one where the management company is trying it on, they will be fired this year.

    The ground rents are ok, they are fixed in the lease, and I know from the start what I’m getting into. 

    0
    0

    I’m not sure the strategy I use would work. In London

    its very different in the NE


    0
    0

    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.

    It all depends on the individual property...

    0
    0