The best recipe for doing buy to let is to follow this simple formula:
1. Buy below market value – i.e find a deal that needs work!
2. Put in new kitchen, bathroom and redecorate neutrally to add value with little cost and to appeal to as wide a range of tenants as possible
3. Get good tenants who pay on time and stay for a long time
4. Refinance the property as soon as you can and use the funds gained from adding value to do it all over again!
Now that may be all good, I can hear you say, but nothing is ever that simple and that’s true. However, if you can get as many elements of this formula right as possible though then you’ll be well on your way to being a successful property investor. More about this in a future blog I think as I can feel myself going into rant mode….!
Spotted this little gem on Rightmove this afternoon that looks like it could fit the formula pretty well:
There’s no more pictures as it is described as being ‘in need of modernisation’. This short phrase should make your ears prick up as you can add value to the property which is a key part of my successful property investing formula. Lets do the sums…
Purchase price – £315k (should be more like £300k)
Work needed – £10k (complete guess but you should be able to do the basics for this if you’re clever)
Post works value – £340 – 350k approx
Rental value – £1600pcm
Gross yield – 6.2% (based on total investment of £310k if bought at reduced price)
Now there are a lot of ‘what-ifs’ there but this is all perfectly possible and is something I am doing with investors on a daily basis. If you’d like to know more then please do get in touch as I’m more than happy to offer advice and help.
Now here’s another funny piccy from my sister. She sends an endless supply, just a shame most of them are completely inappropriate!!