I bought a "BUY to LET" property and Im so excited as everyone says its fantastic....but I actually have no idea what it means and how to make money, or actually, even how much its costing me. HELP!!!!!!!
WELL WOULD YOU EAT THIS MONSTROSITY WITHOUT KNOWING WHAT IS IN IT?
DOES THIS SOUND FAMILIAR ?- Well stand in the queue my friends because BUY to LET can bite your butt as quickly as make you bucks. Buying property is serious business. It can and should be fun, but get advise from experts, and I mean lots of advise before you start spending your hard earned (or even well inherited money).
The salesman will tell you, "Listen buddy, you can get returns of 26% on this beauty. All you need is a cool flat, a bond (easy stuff) and the guys are queuing to rent in this area, it will cost you such a little and before you know it, the bucks will start rolling in. And, heres the best. If you dont make enough back, just sell it, youll make HUUUUUGE profits" - RIGHT!!!!!
So whats the real deal here, will BUY to LET work like this for me.
Understand the cost - Its not just the purchase price. (Say you buy for R 600,000.00 a NICE 2 bedroom apartment with a garage)
Firstly - You need to earn at least R 24,000.00 per month (More if you own other properties)
Purchase Price R 600,000.00 PLUS
Transfer and Bond Costs of R 19,496.00 (YES my friend their are transfer costs as well) PLUS
You need time and money to find the place and sign at attorneys and be off work and find a renting agent at a cost of...lets say R 7,500.00 PLUS
You better paint the place out and set it up for a tenant at a cost of...lets say R 5,000.00
NOT BAD for your first BUY to LET ...whats the TOTAL R 631,996.00 MONTHLY REPAYMENTS ABOUT R 6,000.00 per month on the bond, and the R 31,996.00 a great investment down payment from your savings.....LOOKING GOOD!!!!!!
Found a tenant at the going rental of R 4,000 per month. Signed them up for a year renewable annually at a 10% escalation. So when do I make my money???
You probably forgot the levy, but what the hell you will carry it for a while. Lets say the levy is R 480.00 per month.
You are now in for at least R 2480.00 per month for a long time. ITS TIME TO TAKE ACTION and make it work for you.
Turn this baby on its head and let it start working for you quickly!!!!!!!!!!
BUY TO LET - PART 2 to follow on Sunday....hang in there - LET ME SERVE YOU THE GOODIES!!!!!!
It should taste, feel and look great .