Buying an apartment with 5 year rental income ?

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    Buying an apartment with 5 year rental income ?

    Hi Im thinking about buying an apartment for £88500 that's yet to be built but will be built by June .It has an option of coming with a 5 year fixed rental income.Is this true good to be true ?,Anyone else bought one similer ? Thanks .

    #2
    Add up the five years rent, take that off the asking price, and that will be a fair price for the property.

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      #3
      Craig30 , Be very careful with such Guarantees , sometimes all that glitters isn't always gold, as JKO has rightly asserted there has to be a pay back for such a Builders incentive.

      Like all new build flats , there will be a significant number of "owners" who could be seeking tenants and what you have to ask yourself is what would the rent be in 5 years time on what by then will be a worn second hand flat and will be competing with other flats both within the block but also in the immediate location: another key factor is what will mortgage rates be in 5 years and is it a viable unit. Given the price one thing is certain there is a ceiling on rentals and the rental stress calculations might prove challenging given that a surveyor will at the outset ignore the Guarantee and work on the market comparables and again when the time comes to refinance.

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        #4
        I agree with loan arranger.....why on earth would they offer a rental guarantee? If it is a decent flat in a decent location you do not need one - Now lets look at the alternative........Not a decent flat in not a decent area

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          #5
          Don't buy any lease with ground rent doubling up after every 10 years.

          Its amazing you can buy a new property for £88.5K . Which part of UK is it located ?

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            #6
            Thanks for the replies.the property is in Preston

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              #7
              Is this a sale via RW Invest?

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                #8
                Hello I am trying buy to buy a buy let property via RW invest, Any advice, Many thanks

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                  #9
                  It was a name which came up whilst looking at the location and price band on Rightmove You must make your own decision with whoever you are negotiating with and whether you accept the terms under which you are agreeing to buy.

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                    #10
                    Many thanks, loanarranger,

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                      #11
                      how much is the monthly guaranteed rental ? i cant actually guarantee it but with £90k to invest i can show you properties that will rent for £500 ti £550 all day long

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                        #12
                        As indeed would all of the notable Property web sites indicate, It is all down to Research, Research, Location Location.

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                          #13
                          On their web site they are offering 7% net, which is very good. However, you need to figure out you are not paying extra in build costs, in order to get that return. If after 5 years the property reverted to you, what will you get in rent.

                          A family member bought a 5 year guaranteed scheme from a nationwide developer. It was good until they got the property back. The developer had rented it to students. The developer was paying the rent during the summer months. After the 5 years, it was re-let at lower rents, with summer months being empty.



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