7:41 AM, 23rd January 2014, About 10 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.
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