Buy to Let Case Study – 4 years on…19 Feb 2020
4 years into a buy to let property – it was bought in late 2015 and sold in early 2020. So how has it performed over the 4 years it has been owned?
This was a small 1 bedroom flat in a busy and popular area of Glasgow’s Westend – on Dumbarton RD at the Partick/Thornwood end for those that know it!
It was bought for around £70,000 including fees and needed a refurb throughout, which was done as soon as it was bought. The refurb took about 6 weeks and we found a great tenant in mid-Jan 2016.
The tenant stayed in the property for the last 4 years and was the only tenant in the property. The property went on the market in late 2019 and sold at the end of January. So how do the numbers stack up?
Purchase Price £70,000 PLUS initial refurb £7,000
Total Initial Spend £77,000
Total Rental Income £26,000 Rent per month £550 (average as it went up over time)
Actual Maintenance Costs over 4 years £2,200 (£475 per year so a bit less than my usual estimated 10% rental income)
Actual Factor costs £2,300 over 4 years (£45 per month which is fair)
So the net income on this property over 4 years was £21,500
It was sold for £95,000 in Jan 2020!
SO, in summary, the uplift on the property was £18,000 over 4 years which is about 5.2% per annum (about average in that area) however the yield average at 7% after all costs which is pretty good going – these are a cash buy, however as an interest-only mortgage option its more like 5%.
Still pretty good!
|CASH BUY||INTEREST ONLY MORTGAGE|
|PURCHASE PRICE||70000||PURCHASE PRICE||70000|
|TOTAL SPEND||77000||TOTAL SPEND||77000|
|TOTAL RENTAL INCOME||26000||TOTAL RENTAL INCOME||26000|
|TOTAL COSTS||4500||TOTAL COSTS||4500|
|NET INCOME||21500||TOTAL FINANCE COST||7200|
|AVERAGE ANNUAL YIELD||7%||AVERAGE ANNUAL YIELD||5%|
|PLUS CAPITAL UPLIFT||4.2% PER ANNUM||PLUS CAPITAL UPLIFT||4.2% PER ANNUM|