How do you assess BTL opportunities?

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    How do you assess BTL opportunities?

    Hi, I’m starting my BTL journey and want to understand how everyone goes about assessing multiple BTL opportunities.

    Some people seem to work on a 7%+ gross yield basis, while others drill down into net ROI which gets pretty complex when comparing lots of properties.

    What’s the best approach? How do you assess your investments?

    Thanks folks

    #2
    You need to look beyond your nose at the wider political and legislative landscape.

    Hardly anything except high risk student lets gets a 7% yield (unless you are calculating that using some stupid method like rent vs loan value).

    The way to assess is whether (after taking all risks and the amount of your labour into account, and capital losses or gains) you can beat a building society savings deposit account or a stockmarket mixed fund. Doing that in the real world, in 2020 (when properly calculated) is not as easy as you might think.

    You might be more highly leveraged though - but that is about risk and magnification of risk (or potential gains) only - nothing to do with whether the investment is a good one (albeit magnified risk can be bad).

    Comment


      #3
      Originally posted by AndrewDod View Post
      The way to asses is whether (after taking all risks and the amount of your labour into account, and capital losses or gains) you can beat a building society savings deposit account or a stockmarket mixed fund. Doing that in the real world, in 2020 (when properly calculated) is not as easy as you might think.
      Or a personal pension (tax free) or buying your own home / pay down your own mortgage.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment

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