Edinburgh 5-bed at £627,900 and £2,515/month — does 4.8% gross stack up?

[cedar.small]

If the rent or running costs are only slightly wrong, this purchase could produce very little cash flow for the risk. The property is a 5-bed coastal home in Edinburgh priced at £627,900, with projected rent of £2,515 a month and a gross yield of about 4.8%.

The building looks sound from what I have seen, but that does not settle the investment case. I have allowed for empty periods, management fees, ordinary upkeep and a larger repair, yet insurance, property-related charges or tenant turnover may be understated. Rental supply is another concern.

Which assumptions would you verify locally before relying on the £2,515 figure? I am particularly interested in the net cash position after management, tax and realistic turnover costs, rather than the headline yield alone.

 

[AmberPost]

Tenant turnover may hurt more than any single repair line. A 5-bed can mean greater wear, longer reletting work and a larger rent loss whenever the whole property is empty. How is it intended to be let—one household or multiple occupants? That could materially affect management, insurance and any local compliance costs. I’d also get an insurance quote reflecting the coastal location rather than relying on a generic estimate.

 

[remi.west]

Looking for one overlooked Edinburgh expense is understandable, but I think the combined effect of normal deductions is the bigger risk here. The points about tenant structure and coastal insurance are useful; neither needs to become an exceptional cost for a 4.8% gross return to end up thin.

I would run management, a complete gap between tenancies, maintenance and the property-specific insurance quote together. If borrowing is involved, test a less favourable financing cost as well.

The other comparison should be against all cash committed, including transaction and finance expenses, rather than the £627,900 price alone. A fixed net-yield hurdle is tempting, but I would first ask whether the deal retains a worthwhile margin when several plausible costs rise at the same time.