- September 12, 2007 at 12:31 pm #53343
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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