Money: Not so much a home, more a pension.
"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.
|Printer friendly Cite/link Email Feedback|
|Publication:||Sunday Mirror (London, England)|
|Date:||Sep 24, 2000|
|Previous Article:||Money: pounds 7,000 saving is fireman's lift.|
|Next Article:||Money: Divorces and job-hunters boost rental market.|