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Calculating Buy To Let Investments
and Returns
The experience of progressively rising property
prices confirms people’s belief in ‘bricks and mortar’.
Moribund Stock Market results and troublesome changes in the UK
pension industry further cement the desire for a stable and visible
Investment.
Investment in property has proved to be Historically a very reliable
investment - Like any investment, you need to choose the right path
to security – Let us guide you to the correct decisions
"Returns
from UK residential property were 20.4% in 1999 and have averaged
16.4% over the last 5 years"
FPDSavills |
Case
study
Most people will opt to borrow the majority of an investment property
purchase. For this example, the client has bought a property for
£100,000 with a £15,000 deposit.
Capital
Growth
The property value increases to £125,000 after 2 years.
The client sells and redeems their mortgage of £85,000 leaving
a residue of £40,000.
The initial investment of £15,000 has increased to £40,000
(excluding the costs of buying and selling).
Income
The property yields a gross rental income of £650 per month
(£7800 per annum)
The letting costs (management agents, maintenance) accrue to £150
per month
(£1800 per annum)
Mortgage Payment
The client's £85,000 interest only mortgage costs £425
per month
(£5100 per annum)
Need
advice?
The Property Banking team are helping many clients purchase second
homes and buy-to-lets. Call one of our team on 08704 28 28 29*.
*
Lines open Monday - Friday 8.00am - 10pm. Calls charged at local
rate. Calls are monitored and may be recorded for training purposes.
Operated by Asset Design Limited, authorised and regulated by the
Financial Services Authority.
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