Is cash king?
Cash is great but actually, leverage is king. Buy one house for £100k. You have one asset growing at, say, 5%pa and income from one tenant, say, £8400pa. In 12 months time you have £5k extra equity and £8400 rent so you have earned £13400. 13.4% return is far better than the banks. But what if the tenant leaves? You have no income during the void period and more costs to find a new tenant. What if the tenant stops paying? You have no income and more costs to evict the tenant. But what if you buy 3 houses with your £100k? Use the cash for deposits and costs and get mortgages for the rest. Now you have 3 houses going up 5% and 3 x rental income, although each now earns only £3kpa after monthly costs. However, in 12 months time, now you have £15k extra equity and £9000 rent so you have earned £24000. Surely 24% return is better than 13.4%. And if a tenant leaves or doesn’t pay you still have another 2 bringing in cash. Building a portfolio isn’t easy but we can certainly help you. #propertyinvestment #buytolet #leverage #portfoliobuilding #buildwealth