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The golden rules of purchasing property

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Yvonne Emery
Yvonne Emery

Interested in investing in property? Yvonne Emery shares with you the golden rule of purchasing a property. How to work out if your investment will 'stack up'. Follow these simple calculations

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The Golden Rule of Purchasing with Yvonne Emery Property Investment Coach January 2011 The Golden Rule of Purchasing Property By Property Investment Coach Yvonne Emery www.YvonneEmeryCoaching.co.uk
How do I know if a property will stack up? If youre not making profit the property is a liability NOT an asset Guaranteed cash flow at 6% interest rates (the average rate for Buy to Let Mortgages).
Example Purchase Price 贈100,000 Mortgage is 75% = 贈75,000 Interest rate is 6%
The golden rule For every 贈20,000 lending at 6% = 贈100 /m interest payment. This is how Purchase Price 贈100,000 Mortgage 贈75,000 Interest Rate is 6%
贈100,000 borrowed at 6% = 贈6,000 per annum 歎 12 months = 贈500 per month 贈100,000 = 贈500 / mth 贈20,000 = 贈100 / mth Agreed? Purchase Price 贈100,000 Mortgage 贈75,000 Interest Rate is 6% Rent income calculator
Back to our example 贈75,000 at 6% = 贈375 per month 75,000 歎 20,000 = 3.75 x 100 = 贈375 e.g. 贈60,000 = 贈300 /mth 贈120,000 = 贈600 /mth 贈105,000 = 贈525 /mth Purchase Price 贈100,000 Mortgage 贈75,000 Interest Rate is 6%
Alternative calculation Mortgage amount Take off 2 zeros Divide by 2 e.g. 75,000 (take off 2 zeros)= 750 750 歎 2 = 375 Same Result!
Knowing if your property stacks Mortgage = 375 / m at 6% Expenses = 100 / m Letting Agent = 55 /m (10% of rent) ___ 530 Rent need to be 贈530 / m to break even Any rent above 贈530 is CASH-FLOW.
Working out how much you can offer on a property Use this formula backwards. Rent = 550 / m If 贈20,000 = 贈100 /mth Max offer = 5.5 x 20,000 = 贈110,000 This rule of thumb calculation will ensure you dont offer too much and make sure ALL your property brings you positive CASH-FLOW.
www.YvonneEmeryCoaching.co.uk To find out more about Yvonne and her simple strategies go to Download her report on Property Investing Predictions for 2011 http://www.yvonneemerycoaching.co.uk/ property-investment-predictions-2011-sign-up/

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The golden rules of purchasing property

  • 1. The Golden Rule of Purchasing with Yvonne Emery Property Investment Coach January 2011 The Golden Rule of Purchasing Property By Property Investment Coach Yvonne Emery www.YvonneEmeryCoaching.co.uk
  • 2. How do I know if a property will stack up? If youre not making profit the property is a liability NOT an asset Guaranteed cash flow at 6% interest rates (the average rate for Buy to Let Mortgages).
  • 3. Example Purchase Price 贈100,000 Mortgage is 75% = 贈75,000 Interest rate is 6%
  • 4. The golden rule For every 贈20,000 lending at 6% = 贈100 /m interest payment. This is how Purchase Price 贈100,000 Mortgage 贈75,000 Interest Rate is 6%
  • 5. 贈100,000 borrowed at 6% = 贈6,000 per annum 歎 12 months = 贈500 per month 贈100,000 = 贈500 / mth 贈20,000 = 贈100 / mth Agreed? Purchase Price 贈100,000 Mortgage 贈75,000 Interest Rate is 6% Rent income calculator
  • 6. Back to our example 贈75,000 at 6% = 贈375 per month 75,000 歎 20,000 = 3.75 x 100 = 贈375 e.g. 贈60,000 = 贈300 /mth 贈120,000 = 贈600 /mth 贈105,000 = 贈525 /mth Purchase Price 贈100,000 Mortgage 贈75,000 Interest Rate is 6%
  • 7. Alternative calculation Mortgage amount Take off 2 zeros Divide by 2 e.g. 75,000 (take off 2 zeros)= 750 750 歎 2 = 375 Same Result!
  • 8. Knowing if your property stacks Mortgage = 375 / m at 6% Expenses = 100 / m Letting Agent = 55 /m (10% of rent) ___ 530 Rent need to be 贈530 / m to break even Any rent above 贈530 is CASH-FLOW.
  • 9. Working out how much you can offer on a property Use this formula backwards. Rent = 550 / m If 贈20,000 = 贈100 /mth Max offer = 5.5 x 20,000 = 贈110,000 This rule of thumb calculation will ensure you dont offer too much and make sure ALL your property brings you positive CASH-FLOW.
  • 10. www.YvonneEmeryCoaching.co.uk To find out more about Yvonne and her simple strategies go to Download her report on Property Investing Predictions for 2011 http://www.yvonneemerycoaching.co.uk/ property-investment-predictions-2011-sign-up/