Making Massive Cashflow From Property
9 June 2008
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Investing is all about making a return on your money.
Typical yields in the property market tend to be 3%-5% in the current climate for a single let. This means that if you are paying interest on a loan of 5% plus, then you'll be losing money if you're heavily geared (i.e. your loan to the value of your property is more than 80%).
With HMOs, yields are 8%-12% for a similar property based on the number of rooms.
This means a good positive monthly cashflow can be enjoyed and you can truly run a business that brings in cash every month.
A good rule of thumb is to aim to buy a property at between £30,000-£50,000 per room.
This means that a 4 bedroom property with 2 reception rooms on the market for between £180,000-£300,000 could be purchased depending on the market strategy you are following. Likewise, a 3 bedroom property with 1 reception room on the market for £250,000 would not stack.
Your main expenses on a monthly basis would typically comprise of:
Other expenses depending on the type of HMO strategy you are pursuing could include:
Typical cashflow could be anything from £250-£1,000 per calendar month after all of your bills.
How many of these investments would you need before you could quit your job?
Typical yields in the property market tend to be 3%-5% in the current climate for a single let. This means that if you are paying interest on a loan of 5% plus, then you'll be losing money if you're heavily geared (i.e. your loan to the value of your property is more than 80%).
With HMOs, yields are 8%-12% for a similar property based on the number of rooms.
This means a good positive monthly cashflow can be enjoyed and you can truly run a business that brings in cash every month.
A good rule of thumb is to aim to buy a property at between £30,000-£50,000 per room.
This means that a 4 bedroom property with 2 reception rooms on the market for between £180,000-£300,000 could be purchased depending on the market strategy you are following. Likewise, a 3 bedroom property with 1 reception room on the market for £250,000 would not stack.
Your main expenses on a monthly basis would typically comprise of:
- Mortgage payments
- Utility bills
- Council tax
- TV licence
Other expenses depending on the type of HMO strategy you are pursuing could include:
- Broadband
- Cable/SKY TV
- Telephone calls
- Cleaning
- Gardening
- Management
Typical cashflow could be anything from £250-£1,000 per calendar month after all of your bills.
How many of these investments would you need before you could quit your job?
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