A "no brainer" for someone here - a 2 bed flat, offered as a £60k repossession, that will generate £525PCM in rent. That's 10.5% yield before we start deducting. I have 2 similar properties in my own portfolio, and they generate far more income than the more aesthetically pleasing properties I have elsewhere.
A few key points to note.
- This is a leasehold property, but because the freeholder is likely to be the Council, the service charge is likely to be reasonable - £50PCM or so. Don't know how long the lease is - clearly that needs checking - but they are usually around the 100 year mark which is fine.
- It's going to be a tenant in receipt of benefits due to a) the area and b) the desire to get the maximum yield. Don't worry about this - we're managing it for you.
- It's a repossession so you have to buy it quickly. If you mess around for weeks arranging a mortgage someone will come and steal it off you. As such you should buy cash if you can, get the deal done in 7-10 days, and re-mortgage later if you really want to.
- It may need some work. Most repossessions do. Don't worry about this either, as again we will sort it out. Often with these properties we can get things like free boilers so you may not even end up getting the bill. Clearly you'll be negotiating on price, so if it does need a big spend, that will get factored in. But it's still a great buy!
