Example Property Investment I –
Outright Purchase

Set out below is an illustration of your costs and income on a two-bedroom property listed for sale in the West End of Glasgow if purchased outright.

This is based on continual occupancy for a 12-month period.

Example Property Investment

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A

Purchase: Cost (£) Property* 100,000 Associated Costs (Stamp Duty, Legal, Survey) 3,000 Preparation to Let (Estimate) (Curtains, Paint, Furniture, Appliances) 5,000 Sourcing Fee (4% of Property Value) 4,000 Total Acquisition Costs 112,000

*Traditional 1st floor flat. Sec entry, reception hall, bay windowed lounge, fitted breakfasting kitchen, 2 bedrooms, en-suite toilet, bathroom, gas central heating.

B

Rental: Let @ £700pcm 8,400 pa gross   Gross Yield 7.5 % Less:   Insurance (est.) 250 Letting and Management Fee (15%) 1,260 Gas, Electricity, Safety Check, misc Maintenance 350 Total Annual Expenses: 1,860 Net Rental Surplus 6,540 Net Yield from Rental Returns 5.8%

C

Total Income   Add Capital Gain @ 8.5% (Scotland ave. 2001)   on 100,000 8,500 Net Income on Rental 6,540 Net Annual Yield on Initial Investment 13.42 %