Not necessarily. Yield would be after mortgage interest but not capital payments. However, given that cheap mortgages are a thing of the past the cost of capital is now a considerable factor in making an investment.Would I be correct in saying that for a property to give out a profitable yield it would be best if there was no mortgage attached
Fair point. Most of these were on low tracker interest rates and as such the net income is/was more than suficient to pay the interest. As you say many/most of them are in negative equity and while the market is recovering it is unlikely that it will recover sufficiently to clear the associated mortgages completely from sale of the property at loan maturity date. Given that these are long term investments the chickens will not come home to roost for a number of years! The Banks can do nothing provide that interest is covered in the interim!I have often wondered what happened to all the buy to lets that were purchased during the crazy bom years with interest only mortgages with nothing in place for paying off the underlying capiital.
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