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Property is no investment.

EVEN though savers are furious at low rates paid by banks and building societies, few will be better off if they switch into property.

The gross yield of an investment property is probably around 5%. This calculation assumes four void weeks in every year and total operating costs of 32% of gross rents (management fees, running costs and depreciation), and an interest-only mortgage charged at 4.5%.

If buyers put down a deposit of only 25%, then those switching money into bricks and mortar can expect negative yields.
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Title Annotation:Features
Publication:Daily Post (Liverpool, England)
Date:Dec 19, 2009
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