Investing
What are our investors looking for?
An investment opportunity for the medium to long term that will service it's overheads safely and produce good capital growth. Tate Residential provides our clients with the opportunity to do all this whilst removing the hassle and burden of management in an astute, knowledgeable and friendly manner.
Why?
- To provide a good income or a capital sum for the future
- To provide a tangible asset when required
Contact Tate Residential, we are only a phone call away. We make it as simple as ABC... Tate Residential can manage everything for you from sourcing to letting to managing.
The value of investment property, the rent achieved and mortgage repayments can go up as well as down. Investors must seek professional advice from an Independent Financial Advisor before entering into any contractual arrangement.
Notes on our worked example
| A | Stamp duty, Solicitors and surveyors fee (estimate). |
| B | Basic furniture has been allowed for the property as is let furnished |
| C | Fee for sourcing arranging and negotiating the purchase of the property |
| D | Estimated cost of the works required |
| E | Tate Residential's fee for arranging and supervising the renovation |
| F | Building and contents insurance if applicable. |
| G | 1/2 the Tenancy Agreement Cost. The other 1/2 is paid for by the Tenant |
| H | This can be completely variable. This is therefore a provisional sum. |
| I | Gross rent income less total running expenses |
| J | Net Rental Income expressed as a percentage of the Total Purchase Cost |
| K | Increase in capital value of the property as a percentage of the Total purchase cost |
| L | Net income and capital appreciation as a percentage of the total cost of purchase |
| M | 60% of the total purchase cost assumed borrowed |
| N | Repayment of interest only on the Mortgage borrowed. Variable depending on terms. |
| O | Net Rental Income with Borrowings |
| P | Net Rental Income expressed as a percentage of the Investor's capital invested |
| Q | Increase in Capital value of the property as a percentage of the capital invested. |
| R | Total net rental income and Capital appreciation expressed as a percentage of the capital invested |
All figures are for illustrative purposes only and exclude any allowance for void periods and repayment of capital. They are however based or a real property transaction in 2009
The value of investment property, the rent achieved and mortgage repayments can go up as well as down. Investors must seek professional advice from an Independent Financial Advisor before entering into any contractual arrangement.
Worked Example
| Four Bedroom Investment Property SW London 2009 | |||
|---|---|---|---|
| Purchase | £575,000 | ||
| A | Duties and fees | £24,500 | |
| B | Furniture | £1,500 | |
| C | Acquisition fee | £6,612 | |
| D | Renovation cost | N/A | |
| E | Renovation fee | N/A | |
| Total purchase cost | £607,612 | ||
| Investment return 2009/10 | |||
| Weekly Rent | £669.23 | ||
| Annual rent | £34,800.00 | ||
| Gross return | 5.7% | ||
| Expenses | |||
| Insurance | £500.00 | ||
| Gas and electric tests | £40.00 | ||
| Documentary costs | £115.00 | ||
| Letting fee@ | 10% | £4,002.00 | |
| Managing fee@ | 5% | £1,001.00 | |
| Repairs say | 2.5% | £870.00 | |
| Service charges | N/A | ||
| Total running Expenses | 6.7% | ||
| With borrowing | 60% | ||
| M | Mortgage borrowing | £364,567.20 | |
| Net rental income before interest |
£28,272.00 | ||
| N | interest @ | 2.5% | £9,114.18 |
| O | Net rental income | £19,157.82 | |
| P | Net rental income yield before tax | 7.9% | |
| Q | Capital appreciation | 4.7% | |
| R | Total return before tax | 12.6% | |
