Thinking of investing in a buy to let property? Case Studies

11 Jan 2018

Are you thinking of investing in a buy to let property? We show you some case studies focusing on solid, mid range properties – real life examples – of  investments made by 2 clients in 2017.

Case Study no1

Ian Graham and his wife Sarah (based in the Islands) approached us to discuss investing in a buy to let property which would offer them a good yield (7% plus), in a steady rental area and they wanted a property which was “ready to go”.

The budget was around £70k. After some searching we offered on a 2 bed ex- local authority flat near Glasgow’s new super hospital, purchased for £70,000 in move in condition., which we estimated would rent for £525pcm unfurnished to a long term tenant. A head line yield @ 9% however we know that will come down after expenses, professional fees , factor fees etc ! The clients used a buy to let mortgage to finance the purchase. The purchase went through in February last year and after preparing it to meet legislative requirements, it was tenanted by end March.  This property is offering a great net return of around 6% in the first year, this should increase next year as many of the expenses should be taken over the course of a few years.

For the first 10 months of the Graham’s investment, the figures look like this:

MOREFIELD RD G51
Purchase Price 70,000
Solicitors fee 720
LBTT 2,450
(+ OUR ACQUISITION FEE) 650
TOTAL OUTLAY 73,820
Income and expenditure over initial 10 months of investment
Cost of regulator works 487.50 Rental Income 5,500
New appliances 468.00 Monthly rent £540pcm
Management Fees 949.48
Factor Fees 292.00
EXPENDITURE 2196.98 INCOME 5,500

Case Study - Buy to Let Investment Case Study - Buy to Let Investment

Case Study no2

Another client Mr Ellwood, from the Isle of Uist,  approached us with similar budget around £80k. Looking for something as a long term solid investment in an area which might see some capital appreciation over time. We sourced a property in the regenerated Media quarter area on the South bank of the river in Plantation Square for £78,500. This property was ready to go and was purchased with furniture in place at end July 2017.

A quick turn around and we had a tenant in place for end August 2017 paying £575pcm. Headline yield was almost 9%. This property will offer a net return of over 6% over the first year, increasing thereafter once expenses are spread over lift time. Figures stack up like this:

PLANTATION SQUARE G51
Purchase Price 78,500
Solicitors fee 720
LBTT 2,747
(+ OUR ACQUISITION FEE) 650
TOTAL OUTLAY 82,617
Income and expenditure over initial 5 months of investment
Cost of regulatory works 458 Rental Income 2,900
Boiler service 114 Monthly rent £575pcm
Furniture 235
Management Fees 467
Factor fees 200
EXPENDITURE 1,474 INCOME 2,900

Case Study - Buy to Let Investment Case Study - Buy to Let Investment Case Study - Buy to Let Investment



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