Don’t wait to get a hole in one first deal!

In November 2017 I purchased Buy2Let number one. This is nearly six years ago. There’s so much valuable information I can take away from these years such as tenant demographic, void periods, maintenance, rent increase or decrease, service charge increase, mortgage increase.

I’ve never been a massive fan of sharing numbers, but I believe by sharing my personal experiences I can benefit those starting out in property or looking to get into property.

Let’s look at the numbers from 2017 to date

Acquisition costs

Purchase price £125,000

No STAMP DUTY

Legals £2000

Deposit £31,250

Mortgage £93,750

Refurbishment £2200

All in cash £35,450

Year one rent £650pcm/ £7800pa

Mortgage @ 3.69% = £294.42 (fixed for two years)

Service charge £680

NET Cashflow £355.58pcm/ £3,586.96pa

ROI 10%

Year three rent £650pcm/ £7800pa

Mortgage @ 2.09% = £168.50 (fixed for two years)

Service charge £680pa

NET Cashflow £481.50pcm/ £5,098

ROI 14%

Year six rent £675pcm/ £8100

Mortgage @ 1.89% = £152.37 (fixed for two years)

Service charge £800pa

NET Cashflow £522.63/ £5,471.56pa

ROI 15%

What has changed in six years with this property?

· Service charge has increased from £680pa to £800pa

· Interest rate decreased every 2 years, creating better cashflow and ROI, unfortunately when this fixed rate finishes, this property will cashflow less… cheers BOE

· The property has matured in value by around £25,000 (not a massive amount due to the property being a one bedroom flat but still a healthy number)

The only figure not on here is the maintenance, the biggest spend since having this unit was on a new boiler and to re-tile the bathroom. I manage this property myself so there is no management costs.

This property by November would have generated over £45,000 in rent since I’ve had it. Ask yourself are you looking for capital growth or cashflow?