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Deal Analysis - Coggle Diagram

- - - - Legal fees
        
        £1,600 (LTD company) (Jamie York - Oct 2022)
      - Inspection costs
    - - £750 (Jamie York - Oct 2022)
    - - Refurb
        
        Buffer - depends on experience (20%-10%)
      - Furnishing
  - - - :red_flag: Leverage at 75% :red_flag: (Jamie York very comfortable at this, but no higher (e.g. not 85%) - DO NOT OVER LEVERAGE - the recession will come.
    - - Don't just go for lowest rate - 1. Look at overall cost over term (inc fees) - sometimes lower rate but higher fees = higher overall cost; 2. Look at lender (broker can help) - some more lenient than others.
    - - See above (mortgage rate)
  - - - :warning: DO NOT SELF MANAGE :warning: - managing agents are experts, when something goes wrong (which it will), they know the (100+ pieces of legislation).
        
        Until you own enough to employ (and properly train) someone
        
        Value you time - pay the £85 / month (you haven't got the time to deal with bullshit)
        
        I'm an investor - not a Property Manager
      - 10% is standard
    - - "Piece of mind" (Jamie York) - factor in £20 / month, figure includes boiler cover.
    - - Factor in 5%
  - - - Calculate according to local tenure*
        
        *Tenure - (how property is owned) in UK, is roughly (Jamie York):
        
        21% - BTL (private) landlords
        
        19% - social housing
        
        30% - owner occupied, with mortgage
        
        30% - owner occupied, no mortgage
        
        Approximate UK average, according to Jamie York:
        
        :red_flag: Higher owner occupier rate (more than 60%) = nicer area, better tenants (AND stronger Capital Growth over long-term) :red_flag:
        
        If local tenure = UK average (30/30/21/19) assume empty 1 month / yr = Occupancy Rate 92%
        
        If local tenure > UK average (e.g. 35/35/21/9), nicer area, better tenant, assume = Occupancy Rate 95%
        
        If local tenure < UK average (higher social e.g. 30/30/16/24), assume = Occupancy Rate 89%
        
        Where to find tenure data?
        
        Alternative (free) resource: StreetCheck - but data is 10yrs old
        
        Best source - Property Data - monthly fee
    - - Long-term UK Average = 7% - doubles every 7yrs (but there are ebbs & flows)
      - Conservative = 5% - Jamie York
    - - Depending on area 3-8%
      - Safe assumption = 3% (if don't know how to calculate in your area)
    - - Despite current high inflation (today), go on long-term figure (average) - 2.5-3% (Jamie York rounds up to 3%)