Yields

[garoupe]

Gross yields on residential lettings are reported as 6% yet after 4 years I am still struggling to avoid a negative yield on a 3 bedroom BTL house relying instead on capital growth. Is my experience unique? How many other landlords find it near impossible to get into positive territory in terms of yield?

[GPEL]

Possible reasons: you paid too much for the property, mortgage rate is too high, rent too low. These days yields are low but 4 years ago it was a different matter. What's changed?

[Simon Dewsberry]

HMmmmm

Maybe time to consider changing the prop for something more profitable .......

Do the Maths B4 buying though !

I have a few props, and if any of mine were doing this i would seriously have to question the point in keeping it at all ...

All the above reasons GPEL has mentioned are extremely relevant along with looking at refinancing , creative financing (0% credit cards etc)

And the biggest question of all...what are you going to do if interest rates continue to climb ?

I would suggest a time for re-evaluation of short and term term objective here ....

Your experience is absolutely not unique but very encouraging, that you have identified the situation, and are now questioning it !

Personally i buy at max 90% of market value (giving 10 % intrinsic profit immediately ) also prop should offer min 8% return AND extra potential; ie split into flats for good equity gain or loft conversion or land to build garage(eq gain + extra rental ) or be a corner prop ( extra access for annex or extension) or have advertising hoarding (good source of extra rental income) or give some glimmer of improvement somehow at at good cost/profit ratio ....each prop stands on its own merits ...do the sums if they dont add up ...dont walk away .....RUN and as FAST and FAR as you CAN !!!!

How ? just put "silly"offers in ....you will be astounded at how much of a drop a "motivated seller"(whole topic and a bit on its own)will accept!!!!!!!!!!!

Hope this helps !

Simon