Example 1 – £65,000 High Yield Cash Investment
MRA identify a suitable terraced flat in a popular location in North East England. The vendors are very eager to sell for financial reasons. The asking price is £67,950 and we negotiate hard to agree to purchase the property on your behalf at £58,000. The property had been worth circa £85,000 in September 2007.
The property is fully redecorated, recarpeted and prepared for letting. All costs associated with finding, purchasing and letting the property are included in the original £65,000 investment. Legal costs for the purchase, along with building and contents insurance premiums for the first year, are also included. A full breakdown of all costs are included in the original property report provided to the investor.
The property is then let at £425 per calendar month and you receive £376 per calendar month or £4,512 per annum after deducting our 10% plus VAT management fee. This is a 7% gross annual yield on each £65,000 net cash investment.
The refurbished property is independently valued in the current climate at £68,000 which is £3,000 more than the total amount invested. Realistic anticipated capital growth of 2.5% per annum over a ten year cycle would increase the value of the property back to its 2007 value of £85,000 at the end of 10 years.
Typical £ 67,000 North East Investment Property
2 - Bedroom First Floor Terraced Flat
Example 2 – £25,000 High Yield Mortgage Up Front Investment
MRA identify a suitable terraced house in a popular location in North East England. The vendors are very eager to sell for financial reasons. The asking price is £69,950 and we negotiate hard to agree to purchase the property on your behalf at £60,000. The property had been worth circa £90,000 in September 2007.
A 70% BUY-TO-LET MORTGAGE is arranged for the investor*, therefore £18,000 of the cash investment is used as the deposit. The property is fully redecorated, recarpeted and prepared for letting. All further costs associated with finding, purchasing and letting the property are included in the original £25,000 investment. Legal costs for the purchase, along with building and contents insurance premiums for the first year, are also included. A full breakdown of all costs are included in the original property report provided to the investor.
The property is then let at £435 per calendar month and you receive £385 per calendar month after deducting our 10% plus VAT management fee. The mortgage repayment costs are £175 per month based on a currently available interest only fixed rate mortgage at 4.99% PA. You therefore make a gross profit of £210 per month or £2,520 per annum. This is a 10% gross annual yield on each £25,000 net cash investment.
The refurbished property is independently valued in the current climate at £70,000 which is £3,000 more than the total amount invested, i.e. MRA package price of £25,000 plus the mortgage of £42,000 equals £67,000. This £3,000 "instant" growth in value represents a further 12% return on the original cash investment of £25,000. Realistic anticipated capital growth of 2.5% per annum over a ten year cycle would increase the value of the property back to its 2007 value of £90,000 at the end of 10 years.
The gross combined return on your investment, yield plus growth, is therefore 22%
Typical £ 70,000 North East Investment Property
2-Bedroom Terraced House
Note:- Examples for illustration purposes only. Actual package prices and achievable rents will vary from property to property. As with any investment yields and capital values can go down as well as up. *Mortgages are subject to status and availability. The property is at risk if payments are not maintained.