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Money: Not so much a home, more a pension.

ENTERTAINER Michael McCabe has just bought a former council flat round the corner from his own home under a buy-to-let scheme.

"I never got around to organising a pension, so this is it," says 43-year-old Michael, a divorcee.

"I know how difficult it can be to find affordable rented property. And because I bought the flat for a knockdown price I can charge the going rent and make a nice little profit every month.

"It also means I can pick and choose the jobs I do nowadays as the income I get from the flat is quite a lot."

Michael bought the three- bedroom property in Raynes Park, South West London, for pounds 75,000 under the Mortgage Express Buy-To-Let scheme.

After raiding his savings for the minimum 20 per cent deposit, he is paying the pounds 60,000 back at the rate of six per cent on a fixed rate repayment mortgage.

He makes pounds 800 a month in rent and pays pounds 600 a month in mortgage repayments - a monthly profit of pounds 200.

On average the monthly return on a rented property - the difference between what it costs to buy and rent - is 9 per cent. Michael comes out 25 per cent better off over the year but that is down to London rents which are notoriously higher than elsewhere.

"Being a former council flat, its value probably won't soar, but I'm confident it will never be worth less than what I paid for it," he says.

"I've never really trusted pension companies but investing this way means I can walk past the flat and see what I've got for my money."

He also saves pounds 60 a month in agents' fees by letting the house himself on a six-month shorthold assured tenancy, bought for a few pounds from a legal stationers.
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Title Annotation:Features
Author:Wright, Simon
Publication:Sunday Mirror (London, England)
Date:Sep 24, 2000
Words:305
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