With returns like that, at least we wouldn’t have to worry much about paying higher taxes. No wonder Finumus says buy-to-let is dead.
On the other hand, wouldn’t we be doing this because we believe things will get better?
Well my 3% annual price growth does assume a turnaround. But let’s be even more optimistic. Say a 4% initial yield, interest rates cut to enable a 4% mortgage rate, and prices and rents rising at 4% a year for a decade:
That’s much better. The annualised return on investment improves to 10%, too.
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