I have few moral qualms about letting a bijou buy-to-let in Chelsea to an Italian private equity fund manager with respect to the UK’s wider housing shortages.
Deal or no deal
For kicks I’ve run the numbers on a dozen properties. Despite stagnant prices, I see negative cashflows.
Let’s say the Monevator Mansion SPV buys a £1.5m two-bed flat in pretty good nick in South Kensington.
I model a 75% interest-only mortgage at 5%. The starting monthly rent is £3,750.
The flat will be managed by an agent (at 12% a year, with other costs), but I’ve generously not accounted for refurbishment (which is definitely unrealistic at this end of the market) nor for void periods.
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