One update to my figures has raised another question: insurance may take a much larger bite than I first allowed. The Manchester property is a four-bedroom detached home at £312,000, with projected rent of £2,277 a month and a gross yield near 8.8%.
The model already includes empty periods, management fees, ordinary upkeep and a reserve for a major repair. I still need to test council tax during vacancies, reletting costs, financing and whether the rent assumes one household or separate room lets. Which of those is most likely to undermine net cash flow, and how would you judge whether the remaining return compensates for turnover risk?
The model already includes empty periods, management fees, ordinary upkeep and a reserve for a major repair. I still need to test council tax during vacancies, reletting costs, financing and whether the rent assumes one household or separate room lets. Which of those is most likely to undermine net cash flow, and how would you judge whether the remaining return compensates for turnover risk?