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Buy-to-Let
Joint Equity
Joint Equity compared to Buy-to-Let
Cost of property
£150,000
£150,000
Ownership of each property
100%
50%
Gross asset value
£150,000
£75,000
Deposit
30%
20%
Deposit amount £’s
£45,000
£15,000
Number of properties for £30,000 investment
1
3
Total investment
£45,000
£45,000
Gross value of your portfolio
£150,000
£225,000
+50%
Mortgage required
£105,000
£180,000
Mortgage pm 5% interest only
£438
£750
Rent to mortgage ratio (see Note 1)
135%
None
Rent per property per month
£600
£390
Total rent per month
£600
£1,170
Gross rent per year
£7,200
£14,088
Management fee
15%
5%
Void allowance (see Note 2)
1 month pa
None
Annual cost of void period
£600
£0
Investor repair costs (see Note 3)
£500
£0
Net income/(loss) per year
(£236)
£2,250
+900%
Net income % return on investment pa
-0.32%
+6%
Asset growth (see Note 4)
3 years at 6% pa
£178,652
£268,000
+50%
3 yr net asset value
£28,652
£43,000
+50%
5 years at 6% pa
£200,734
£301,100
+50%
5 yr net asset value
£50,734
£76,100
+50%
Comparing the financial aspects of Joint Equity & Buy-to-Let
► Get more for your money
If you thought the last table was impressive be prepared to be stunned with what Joint Equity delivers for the same £45,000 investment compared to Buy-to-Let.
► Notes on the comparison
We have tried to produce a simple like for like comparison but that means we have had to make some exclusions.
1 We have used 30% for the deposit for Buy-to-Let as it is the most commonly available. We are aware that some lenders only require 25%, however, they add higher arrangement fees and usually have a slightly higher interest rate.
2 We have not included the costs of buildings insurance as it varies substantially with location and type of property and is common to both schemes except with Joint Equity the Investor only pays in proportion to the ownership in this case 50%. Please make your own assessment when considering any specific property.
3 We have not included any contents insurance in the Buy-to-Let column as not all Buy-to-Let owners take it out. No seriously! Please remember with Joint Equity the Investor does not contribute to contents insurance.
► And lower your risks
But remember we deliver it at lower overall risk and with much greater geographical spread - so you can hit the property price growth hotspots.
► In this section:
The Joint Equity Scheme & Investing
The Joint Equity Scheme & Investing
► Well,then?
We think these 2 tables lead to only one conclusion - Joint Equity is the only way to invest in property to maximise your returns, minimise your costs and risks and really help people at the same time.
► How convinced are you?
But what about investors who already have Buy-to-Let properties? As you would expect Joint Equity has thought of them and offers 2 options for existing buy-to-let investors to increase their income and cut all the hassle.
Click here for details.
The only thing we can not do, yet, is reduce your tax bill from all the extra profits you will be making - but of course we are working on it!!!!!
Figures correct at date of comparison:-
07 June 2009
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