From the previous slide, we can see the trend in property price VS rent. Even a 20% drop in property price, the decrease in rent is less than 1%.
Let's exaggerate the decrease in rent by 10 times, 10%. What would have been the impact on our Cashflow?
Market Rent £425
reduce by 10%, you will get
Reduced Rent £382.5
Mortgage Payment £127
Management Fee £45
Monthly Outgoing Expense (MOE) £45
Cashflow £165.5
What does it mean?
It means that even rent reduces by 10%, you still get positive cashflow. That would have given you a good assurance as a form of investment in U.K. Property.
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