# Buying to Rent



## mrypg9 (Apr 26, 2008)

Have just read an interesting piece on rental income....Savill's, the London rental agency, state that a 6% yield on investment in the property sector is a good current rule of thumb . Presumably that takes into account tax due, maintenance and agency fees.
Assuming the average price paid for a buy-to-rent property in Spain is 200000 euros, then an expected profitable rental would be1000 euros a month....from which tax, maintenance, agent's fees etc. must be deducted.
Interesting........


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## xabiaxica (Jun 23, 2009)

mrypg9 said:


> Have just read an interesting piece on rental income....Savill's, the London rental agency, state that a 6% yield on investment in the property sector is a good current rule of thumb . Presumably that takes into account tax due, maintenance and agency fees.
> Assuming the average price paid for a buy-to-rent property in Spain is 200000 euros, then an expected profitable rental would be1000 euros a month....from which tax, maintenance, agent's fees etc. must be deducted.
> Interesting........


assuming you can get a tenant...

also, a property around here that you could buy for 200,000€ wouldn't attract a rent of anywhere near 1000€ a month - maybe half that

my rent is less than 1000€ & an identical property around the corner is on the market for just under 500,000€ - over-priced imo & for sale nearly 2 years now - but I bet they could get 400,000 - & maybe when the new 'investor visa' comes in they will actually get 500,000.........


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## mrypg9 (Apr 26, 2008)

xabiachica said:


> assuming you can get a tenant...
> 
> also, a property around here that you could buy for 200,000€ wouldn't attract a rent of anywhere near 1000€ a month - maybe half that
> 
> my rent is less than 1000€ & an identical property around the corner is on the market for just under 500,000€ - over-priced imo & for sale nearly 2 years now - but I bet they could get 400,000 - & maybe when the new 'investor visa' comes in they will actually get 500,000.........


Agree totally. Plus if you had €200k to invest you'd be lucky to get a 4% return these days...


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## 90199 (Mar 21, 2010)

mrypg9 said:


> Agree totally. Plus if you had €200k to invest you'd be lucky to get a 4% return these days...


If you were prepared to take advice, which costs, then your return on your investment could well be far in excess of 4%.


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## mrypg9 (Apr 26, 2008)

Hepa said:


> If you were prepared to take advice, which costs, then your return on your investment could well be far in excess of 4%.


We did, it was and we got a slightly higher rate on our investment.
Thing is, we can't afford to take risks.


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## 90199 (Mar 21, 2010)

mrypg9 said:


> We did, it was and we got a slightly higher rate on our investment.
> Thing is, we can't afford to take risks.


That I can understand.


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## Leper (May 12, 2010)

Saville's would say that, like other estate agents chanting the same lies. There is no point in backing a horse that has already lost.


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## Chopera (Apr 22, 2013)

mrypg9 said:


> Have just read an interesting piece on rental income....Savill's, the London rental agency, state that a 6% yield on investment in the property sector is a good current rule of thumb . Presumably that takes into account tax due, maintenance and agency fees.
> Assuming the average price paid for a buy-to-rent property in Spain is 200000 euros, then an expected profitable rental would be1000 euros a month....from which tax, maintenance, agent's fees etc. must be deducted.
> Interesting........


Yield is gross return on initial investment (before deductions) so in Spain it translates to a lot less than 6% net. Maybe half that. For a very illiquid asset. In the cities you can probably do better than 6% but there are high risks of non-payment. Some councils run guaranteed letting schemes though, which might be less risky, but they might not pay so much. Given it costs over 10% to buy the property in the first place, it'll take a few years to start making any kind of profit.


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## mrypg9 (Apr 26, 2008)

Chopera said:


> Yield is gross return on initial investment (before deductions) so in Spain it translates to a lot less than 6% net. Maybe half that. For a very illiquid asset. In the cities you can probably do better than 6% but there are high risks of non-payment. Some councils run guaranteed letting schemes though, which might be less risky, but they might not pay so much. Given it costs over 10% to buy the property in the first place, it'll take a few years to start making any kind of profit.


Yes, I thought that would be the case.
You can't put a price on all the possible problems and the associated worry and hassle that all too often goes with renting.


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## Stravinsky (Aug 12, 2007)

Hepa said:


> If you were prepared to take advice, which costs, then your return on your investment could well be far in excess of 4%.



Please tell me where. Ive been looking for 6 months and have come to the conclusion that companies really dont want your money, they are more interested in you taking a loan or a mortgage.

Without putting your funds at greater risk, the best you can get at the moment (last I looked) was around 2%, and more often than not this reduces by over 1% after the first year. hence, in the UK, everyone is changing savings accounts every 12 months, which is slightly daft

The best I found was by opening a Santander account which gives you 3% interest on up to £20K in a current account.

Property has almost always been a winner throughout my life, but my opinion is that things have changed


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## 90199 (Mar 21, 2010)

Stravinsky said:


> Please tell me where. Ive been looking for 6 months and have come to the conclusion that companies really dont want your money, they are more interested in you taking a loan or a mortgage.
> 
> Without putting your funds at greater risk, the best you can get at the moment (last I looked) was around 2%, and more often than not this reduces by over 1% after the first year. hence, in the UK, everyone is changing savings accounts every 12 months, which is slightly daft
> 
> ...


Phoenix Financial Associates Ossett

The Toppits , Healey Road 
Ossett, West Yorkshire WF5 8LN

01924283222

08712880304


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## 90199 (Mar 21, 2010)

Or any other Independent Financial Adviser


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## snikpoh (Nov 19, 2007)

Hepa said:


> Or any other Independent Financial Adviser


No, the risk at the moment is too high.

We are only getting about 4% - 4.5% on our investment portfolio but then it may all collapse tomorrow.


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## 90199 (Mar 21, 2010)

snikpoh said:


> No, the risk at the moment is too high.
> 
> We are only getting about 4% - 4.5% on our investment portfolio but then it may all collapse tomorrow.


Your choice, but not for me.


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## Chopera (Apr 22, 2013)

A lot of FTSE 100 companies pay dividends of over 5%. Following stock markets is a bit of a drag I admit, but I tend to find drip feeding money into shares every few months, while keeping a broad portfolio is about the best I can do (and I try to keep some cash aside in case there is a crash and opportunuities arise)


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## Stravinsky (Aug 12, 2007)

Hepa said:


> Or any other Independent Financial Adviser





Hepa said:


> Phoenix Financial Associates Ossett
> 
> The Toppits , Healey Road
> Ossett, West Yorkshire WF5 8LN
> ...


OK, but that will involve investments in stocks / shares / etc, and as I said, without significant risk, you cant get much .... I have a good financial adviser (well. as good as they can be) and it boils down to low, medium, or high risk, and the rewards (or not)are associated with which you take




Chopera said:


> A lot of FTSE 100 companies pay dividends of over 5%. Following stock markets is a bit of a drag I admit, but I tend to find drip feeding money into shares every few months, while keeping a broad portfolio is about the best I can do (and I try to keep some cash aside in case there is a crash and opportunuities arise)


Yes for sure, but theres a bit of a difference in drip feeding money into shares, and finding a home for £50k, or even £100k.

Having invested over the last 10 years, at one point I had lost a lot of money. Its recovered now, but what will happen next?


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## Chopera (Apr 22, 2013)

You can keep £100k in an easy access account and then drip feed into shares. Making use of an ISA (if you do not already do so). I can't see much happening in the Spanish property market for another 5 to 10 years, and the UK doesn't provide that great returns these days (although if the help to buy bubble appears there may be a bit to be made on that). Also UK CGT rules don't favour property so much now (no taper relief). I think equities are a better bet than property in the mid term, but I'm no expert. If you're only going to get 5% on an asset at least make sure it's a liquid asset so you can get out easily. If you're really keen on Spanish property though, it might be worth buying a plot of land. The price of land in Spain has plummeted more than property because the banks are simply giving no finance for land purchases. For £100k you should be able to buy a large plot in a highly desirable area. Obviously you won't get any income from it unless you eventually build on it, but if you're only going to get a few percent anyway then you're not really missing out that much.


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## snikpoh (Nov 19, 2007)

Hepa said:


> Your choice, but not for me.


So what's your choice for a good return on investment?


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## 90199 (Mar 21, 2010)

snikpoh said:


> So what's your choice for a good return on investment?


I listen to advice given by an I.F.A. and act upon it, the ones I have used have not failed me over the last 16 years.


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## 90199 (Mar 21, 2010)

I have an apartment for sale, it says Se Vende on the sign. I have just had a woman ring wanting to rent the apartment for 3 months. This is the umpteenth rental enquiry, what is it with these people, don't the learn how to read at school.............rant over.


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