The sales case is that a new build should require less early maintenance, but I am not convinced that makes these figures attractive. The 5-bed London flat costs £865,800 and is expected to rent for £2,300 a month, giving £27,600 a year and about 3.2% gross before expenses.
I have allowed for vacant periods, management, ordinary repairs and a separate allowance for major work. The remaining uncertainties are insurance, tenant turnover, financing sensitivity, property tax where applicable, and building charges that may rise independently of the rent.
Which recurring cost would experienced London landlords examine most closely here? I am less interested in the headline yield than in the operating return before finance and tax, and whether that return leaves enough room for a difficult letting period or higher management costs.
I have allowed for vacant periods, management, ordinary repairs and a separate allowance for major work. The remaining uncertainties are insurance, tenant turnover, financing sensitivity, property tax where applicable, and building charges that may rise independently of the rent.
Which recurring cost would experienced London landlords examine most closely here? I am less interested in the headline yield than in the operating return before finance and tax, and whether that return leaves enough room for a difficult letting period or higher management costs.