Dear all,

I was just wondering what criteria people use to decide on whether or not a rentback is viable....

i.e. cash in/out
£x of positive cash-flow etc....

Thanks in advance.

Paul,

Paul,

With respect, this question is like asking someone how much custard they like on their apple crumble or would they prefer ice cream or cream, if so how much? or a mixture.
It is an open question and dependant on many personal variables and choices.

Personally,

I am happy to purchase at 81% OMV, RM to 85% at 5.14%. Then charge Rent of monthly mortgage at 6% + £50 profit pcm + £50 insurance/gas safety pcm.
II am happy to use a portion of, or all of, the cash out to subsidise/discount this rental figure.
Eg 6 months rent free, 2 years discounted, 5 years discounted etc etc.

Other investors like £200pcm rental profit from each property, or some are happy for negative cashflow for a while if it means they Acquire an Asset.
This is where our plans, goals and strategies vary as much as our personalities and risk profiles.

Onwards + Upwards,

Phil

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Hi Phil

You've changed my way of thinking for the better when looking at deals.

Thankyou Brian.

That's brilliant Brian,

Thank you for your comment, that is one of the things I love about property, the fact that we can all be different and still succeed in our own niche. We can measure our progress against our own goals and ambitions not someone elses.

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Hi Brian,

Phil gives a good answer.

It really depends on what your objectives are and whether a particular deal suits your objectives. It also depends massively on the objectives of your client (even though your client may not have written down objectives, they have called you in the first instance so it pays to listen to them).

Generally it really pays to listen to what they are saying, and to encourage them to say more, even to dream a little in terms of what they want. Sometimes you may be able to extract from them things they didn't necessarily know themselves. Sometimes it pays to listen to what they are NOT saying - this is really where listening comes to the fore.

And then structure the deal according to those dreams. So you are looking to structure a deal that appeals to the highest common denominator, rather than the lowest. So you can structure an offer in a way that makes possible something that they had never dreamed possible - and yet - it may well be the lowest offer they received!

The key behind all of these deals is trying to find a common ground between yours and your client's objectives. The better you can do that, the more successful you will be at converting leads.

My sixpenny'th!

Richard

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