I am not sure if you remember that I told you I was buying 4 flats in Scotland at £30,000 each no money down but they have all completed now.

 

My sourcer found all four of these for me (thanks Richard!) and I expected them to rent for £350 maximum for 2 bed flats.

 

Now I will inform you that these flats are in a notorious part of Glasgow but for some reason there is high demand for this area.  I knew they would let to a DSS claimant but I did not know that:

 

1. There would be so many calls for the flats
2. They would rent for £475 per month

Rents are really rising.  I am fairly certain of the reasons why and I am sure other landlords know why as well.  Its not just the fact that people are preferring to rent and waiting for the crash.  Its a lot more fundamental than that.

 

All I am going to say is its something to do with housing benefit changing and with people choosing to rent (even if they are not claiming benefit) is having a massive knock on effect for rents.

 

It is going to be quite a surprise over the next few years.  The last few years it was all about rising property prices the next few years will be all about rising rental values.  So over the last few years and forthcoming years there is only one winner: THE LANDLORD!

 

This is why over 90% of landlords wish to keep or expand their portfolio.

 

So take my 4 flats.  They yield at 19% and I can refinance at 5.39%.  That’s an approximate profit of 13.6% per £100,000.  So every £100,000 invested is £13,600 profit.  Every £1m invested is £136,000 profit.

 

I think I am going to give Richard a call and ask him to get me 40 more of those flats in Scotland……..

 

Ajay

 

PS If you want some properties do not be shy – JUST ASK!

Posted on: 27th Aug 2008