Hi all
Could someone give me an opinion on a situation occurring.
My daughter DOB 1967 is contemplating a BTL costing 160K producing currently 7500pa. net of expenses.
In first few years mortgage will initially require 4000 pa contribution from her pocket to make up shortfall between rent income/mortgage repayment until rentals increase to equal (and eventually surpass) mortgage repayments , this initial contribution she does not like overly.
I calculated the 160k purchase price will have increased to 424,527 over
20 years @ 5% pa (my own property in similar area has done 10% pa for the last 28years, 47k to 650K).Rental, should they maintain a similarly conservative 5% will be produce
243K pa at year 20.To put this in context for her with say a personal pension, according to the Hargreaves Landsdown pension calculator, 4800 pa pension contribution would produce a pension pot in 20 years (she will be sixty) of 225,898.00,
Less than 1years projected rental return on this BTL is this a no brainer? any advice would be useful for her.