7:41 AM, 23rd January 2014, About 8 years ago 15
I hope you are well and I will keep this short as I know you get asked a lot of questions.
I am a youngish guy, with no dependants. I have roughly £35k sat in the bank and am keen to getting into property investment. I would love to know if the following sounds like a valid strategy for getting started on my first purchase.
Start in Scotland:
Put £15k down on a £60k 1 bed flat ( there are a few ive seen in decent areas)
A £45k mortage on interest only (5%) runs me £187 per month
Rental income of £450 per month
Gross yield of 9% p.a
Net yield after costs I get roughly 4.8-5%
Net cashflow is +£100 per month after costs
With that,Ii would have £20k in the bank, with property one earning me £100 per month and hopefully growing in value and rental yield over time. Even on my £15k, that £100 is equivalent of 8% interest pre tax.
I then save up more cash and invest another £15-20k in a property worth £60-80k and keep going from there?
I am not too risk averse, so would like to build a portfolio reasonably quickly, but I am aware I need cash flow and a big chunk of savings to cover any unexpected costs and periods of vacancy. However, I figure starting with a small property is a good way to dip my toes into property and I can cover the mortgage even if I have no tenants in there for an extended period of time.
Any advice appreciated.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Advice and implementation provided by a practising Barrister-At-Law with £10,000,000 of Professional Indemnity InsuranceBook Now
Previous ArticleThe 3D printer that can build a house in 24 hours
|“Account”||means an account required to access and/or use certain areas and features of Our Site;|
|“Cookie”||means a small text file placed on your computer or device by Our Site when you visit certain parts of Our Site and/or when you use certain features of Our Site. Details of the Cookies used by Our Site are set out in section 13, below;|
|“Cookie Law”||means the relevant parts of the Privacy and Electronic Communications (EC Directive) Regulations 2003;|
|“personal data”||means any and all data that relates to an identifiable person who can be directly or indirectly identified from that data. In this case, it means personal data that you give to Us via Our Site. This definition shall, where applicable, incorporate the definitions provided in the EU Regulation 2016/679 – the General Data Protection Regulation (“GDPR”); and|
|“We/Us/Our”||Means Property118 Ltd , a limited company registered in England under company number 10295964, whose registered address is 1st Floor, Woburn House, 84 St Benedicts Street, Norwich, NR2 4AB.|
|Name of Cookie||Purpose||Strictly Necessary|
|JSESSIONID||Used only to collect performance data, with any identifiable data obfuscated||No|
|__cfduid||This cookie is strictly necessary for Cloudflare's security features and cannot be turned off.||Yes|
|Name of Cookie||First / Third Party||Provider||Purpose|
|__utma, __utmb, __utmc, __utmt, __utmz||First||Helps to understand how their visitors engage with our website|
|_fbp||First||Helps to understand how their visitors engage with our website|