Buy-To-Let Boom!

[DimPrawn]

http://timesbusiness.typepad.com/mon...-hotspots.html


Simples:


1. Glasgow

Average Yield: 12 per cent.

Typical property: A one bedroom first floor flat in Rutherglen, Glasgow. Price: £32,000. Monthly Rental: £350.

2. Houghton Le Spring, Tyne and Wear

Average Yield: 10 per cent

Typical property. A two bedroom terraced house five minutes walk from the town centre. Price: £46,500. Monthly Rental: £400.

3. Telford, Shropshire

Average Yield: 10 per cent

Typical property: A one bedroom first floor apartment flat Price: £59,950. Monthly Rental: £500

4. London Borough of Lewisham

Average Yield: 8 per cent

Typical property: A one bedroom first floor flat in Lee. Price: £95,000. Monthly Rental: £675

5. MIddleton, Manchester

Average Yield: 8 per cent

Typical Property: A two bedroom middle terraced house in a suburb of Manchester. Price: £64,950. Monthly Rental: £450

6. Barnsley, South Yorkshire

Average Yield: 8 per cent

Typical Property: A three bedroom semi-detached house in the Darton district of Barnsley. Price: £65,000. Monthly Rental: £450

7. London Borough of Newham

Average yield: 8 per cent

Typical Property: A one bedroom flat in East Ham. Price: £104,500. Monthly rental: £700.

8. Burnley, Lancashire

Average Yield: 7 per cent

Typical Property: A three bedroom terraced house in the east Lancashire town of Burnley. Price: £79,500. Monthly Rental: £525

9. Neath, Wales

Average Yield: 7 per cent

Typical Property: A two bedroom semi-detached house in the Neath Abbey part of the town. Price: £69,950. Monthly Rental: £450

10. Newcastle upon Tyne:

Average Yield: 7 per cent

Typical Property: A three bedroom semi-detached house in the Throckley district. Price: £69,950. Monthly Rental: £450

[Menelaus]

DP - not wishing to sound unkind, but have you ever been to Rutherglen

Also: I live about half-a-mile from Newham (on the posh side of the river, natch ) and it's like Gaza. Not recommended!

[DimPrawn]

What do you think the occupants of Rutherglen might have a problem paying the rent?

I never considered that a place with property priced at £32K and £350 rents might be a problem.

[sweetandsour]

Also: I live about half-a-mile from Newham (on the posh side of the river, natch ) and it's like Gaza. Not recommended!

I'm not sure that the Gaza comparison is accurate because that is relatively peaceful - when I lived in Newham me and the flatmate used to refer to it as "Beirut".

Not sure that that really matters though, it's just business. You don't live in your own BTL.

[Shimano105]

Knowing at least one of those areas I can tell you that the 'typical' price quoted is at least £30k less than what they are being advertised at.

More wishful thinking than actual fact.

[minestrone]

What do you think the occupants of Rutherglen might have a problem paying the rent?

I never considered that a place with property priced at £32K and £350 rents might be a problem.

You would just have to give them a mini gun and a few grenades before they moved in. First time I have ever heard Rutherglen being called a hotspot.

[Turion]

Quick analysis on 1 random example:

7. London Borough of Newham

Average yield: 8 per cent

Typical Property: A one bedroom flat in East Ham. Price: £104,500. Monthly rental: £700.

Gross rental: 8400
But assume 1 month void per year = 7700
Less 15% to agent = 6545
Less insurance (say 300) = 6245
Less Ground rent + service charges + repairs (say 1200) = 5045
Less BTL mortgage interest (assume 6% on purchase price for simplicity = 6000) = -955
Less tenent bargains reduced rent to 650/month = -1955
Less legal costs, permits etc (100) = -2055

Landlord profit = -2055

Time and hassle factors are not included here, but are also significant.

Then factor in 10% of tenents who fall behind, or simply do not pay rent and take 6 months to evict at great cost and then it is obvious that the BTL landlord is subsidising the tenent.

Why bother when the likes of BP and FPCT are yielding 8% with potential capital gains on top - all with no hassel

[scooterscot]

http://timesbusiness.typepad.com/mon...-hotspots.html


Simples:


1. Glasgow

Average Yield: 12 per cent.

Typical property: A one bedroom first floor flat in Rutherglen, Glasgow. Price: £32,000. Monthly Rental: £350.

I've been trying to tell you...

My Glasgow flat is actually rented at more than double the cost of owning it!!

[scooterscot]

DP - not wishing to sound unkind, but have you ever been to Rutherglen

Also: I live about half-a-mile from Newham (on the posh side of the river, natch ) and it's like Gaza. Not recommended!

Try Pollokshields, that's were mine is... Lovely spot, they knew how to build hoses in those days. And very nice for hot weather like we're having now. I have a similar house here in Edinburgh if you open the sashes top and bottom the whole place is cool....

[IR35 Avoider]

Buy a commercial property investment trust (tickers UKCM, FCPT, IPT, IRP, SLI, APT etc.) on the stock-market and get and 8% or higher net yield, after paying all expenses, including any internal debt interest.

Your properties are let for ten years at a time, the tenants repair them themselves, rents can't go down during the tenancy (unless the tenant actually goes bust.)