10:53 AM, 11th March 2014, About 8 years ago 9
I have owned four single family cash flowing rental properties since 2006 and last year started looking for ways to expand my portfolio where I could invest in a property, add value (perhaps through refurb), recycle the deposit and invest in another etc.
My current portfolio, small though it is, cash flows for me and I want to find additional cash flowing properties. Maybe I am rusty but I am struggling to find single family property opportunities that stack up for me.
I am working on the basis of 35% of rental going for management, insurances, repairs, provision for voids, carpet & paint etc. This leaves 65% for finance and hopefully cash flow left over.
My aim is at least £200 PCM cash flow after all costs.
In my location (Cambridgeshire & Suffolk) a typical 3 bed property would rent for £600 to £650 PCM. After costs, 65% of this rental is £390 to £422 and this reduces to £190 to £222 left to pay finance after taking off my target £200.
At 5% interest that buys a £45k to £53k loan.
At 75% loan-to-value that would be a property worth £60k to £70k.
Properties of that value don’t achieve £600 PCM rents in my area, unless I look at HMO, but professional letting agents don’t seem to like them.
Perhaps I am being unrealistic expecting to cash flow £200 PCM after costs?
And so, I am going around in circles.
Am I getting my numbers wrong or am I looking in too narrow an geography?
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