At what price would i become a definite buyer

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      Anonymous
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      I have been renting our 2 bedroom apartment for 3 or 4 years now.

      We use it about 5 weeks of the year but despite that our annual rent from holiday lets has been about £5,000 a year (one low year £3,500, last year £7,000). This is after all expenses, except tax (I comply with both Spanish and UK tax laws).

      Currently, I reckon i could get about 6% from a building society, again before tax.

      So, if i wanted a 6% (pre-tax) income yield, i would be prepared to pay about £84,000 for a 2 bed unit, fully furnished, equipped and ready to let. No black money, and all fees included.

      That’s a target price in my area of about €121,000. For investment purposes that would be my buying trigger, especially as i see interest rates declining over the next few years from the current and imminent peaks.

      Where I am that’s about 25% less than the more modest asking prices.

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