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£140,892 – The Typical Profit Each Nantwich Landlord Could Make in The Next 25 Years

Posted on September 10, 2018 by @AdminSF in Letting Agent Nantwich, Nantwich Property, Property Market

£140,892 – The Typical Profit Nantwich Landlords Could Make in The Next 25 Years

I am of the opinion that buy to let investment in Nantwich, in the long-term, will bring substantial returns for landlords, irrespective of latest regulation and tax changes.

Taking a very conservative (with a small ‘c’) view, I believe landlords will see a projected net profit of £239,205 per property over the next 25 years through capital gains and rental. When inflation is taken into account that works out at £140,892 (in today’s money) or around £5,636 per year. The breakdown applies to a basic tax-paying landlord placing a characteristic 25% deposit on a £193,000 terraced/town house property.

Capital gains make up a substantial part of a landlord’s returns. Again, being conservative, I have assumed that Nantwich house prices over the next quarter century (between 2018 and 2043) will rise at half the rate they did between 1993 and 2018 (the preceding 25 years), therefore the example Nantwich property in the previous paragraph would grow in value to £389,571, providing gross capital gains of £196,571.

A typical Nantwich landlord receives, on average, rent of £8,340 per annum per terraced/town house property and so, over a 25-year period, that example property would generate a total rental income of £318,797 (again – very conservatively assuming a compound annual growth rate in the rent of 1.71% per annum).

Nevertheless, there are costs to running a buy to let property (mortgages, void periods, repairs, agents fees etc) .. and over those same 25 years, I have estimated that to be £276,162  .. giving the net profit levels mentioned in the second paragraph.

25 year potential return on investment on a Nantwich buy to let investment

Now of course I have had to make assumptions to reach these figures, yet I hope you would agree, I have been very unadventurous with my assumptions.

The Nantwich (and UK as a whole) buy to let property market is experiencing a massive sea of change. Regulation and tax changes have altered the dynamic in the property market, diminishing its appeal to inexperienced and amateur landlords, and these new tax changes mean higher tax bills for higher rate tax landlords. Yet, despite these rising costs, there are still healthy returns to be found in Nantwich buy to let investment for knowledgeable and steadfast landlords. Nonetheless, the days of anything making money and idle speculation are long gone.

Buy to let is a long-term business undertaking, necessitating commitment and expertise. Don’t put your head in the sand and think it doesn’t affect you. Nantwich buy to let landlords must be equipped to start business and tax planning, take portfolio management advice to ensure their investments will meet their investment goals, appreciate the risks as well as the rewards, and, most crucially, the obligations they have towards their tenants.

If you are a Nantwich landlord, irrespective of whether you are a client of mine or another agent in Nantwich (or even you do it yourself), feel free to drop me a line or give me a call for an informal chat on the future direction of the Nantwich rental market and where opportunities may lie.

I am have arranged a buy to let seminar in September if you would like to know more about the tax, what mortgages are available and how best to structure a deal then come along and speak to the experts who are dealing with these kind of questions every day from other people just like you. Knowledge is what will get you the very best deal when it comes to buy to let so drop me an email and I will tell you where you can register to attend this event.  I believe the more information I can share with you the better the decision you will make.  So what are you waiting for?  This event is for anyone thinking of becoming a landlord or who is already a landlord and wants to know about any changes in legislation or how to make more more from tax planning etc.

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