propman2
16-04-2006, 07:30 AM
Ajay Ahuja
Ajay Ahuja started his own £10m portfolio with only £500 nine years ago. He says, “You may think it was easier back then but it wasn't. The availability of finance for buy-to-let properties is abundant so becoming a landlord is easier than ever. I followed my own strict rules back then to achieve this and here they are:
1. Aim for a 12 per cent yield.
If the monthly rent is £500, add two noughts (£50,000) and try not to pay more than that.
This is an extract from MSN Money.
It is so easy to make money isnt it?
However one fundamental flaw. Buying a property for £50,000 with monthly income of £500, I challenge anyone to do that. In effect what this means is that on this basis you will never get started because there are no such deals, simple as that but you can read about it from one of Ajays books so thats fair enough I guess. To get that yield where I am from you would have to spend least £100,000 so the rule should be add two 0's and double it!
“You may think it was easier back then but it wasn't."
Oh yes it was, as with any investment its partly about timing back then it was possible to make the calculations work even on a capital repayment basis.
I followed my own strict rules back then to achieve this
"back then" been the key words, a careful choice of words.
I am not saying his books are not useful I have the seven pillars of buy to let wisdom but I have to say that some of the rules applied do not stack up in this day and age albeit it has its use for other calculations etc.
Ajay Ahuja started his own £10m portfolio with only £500 nine years ago. He says, “You may think it was easier back then but it wasn't. The availability of finance for buy-to-let properties is abundant so becoming a landlord is easier than ever. I followed my own strict rules back then to achieve this and here they are:
1. Aim for a 12 per cent yield.
If the monthly rent is £500, add two noughts (£50,000) and try not to pay more than that.
This is an extract from MSN Money.
It is so easy to make money isnt it?
However one fundamental flaw. Buying a property for £50,000 with monthly income of £500, I challenge anyone to do that. In effect what this means is that on this basis you will never get started because there are no such deals, simple as that but you can read about it from one of Ajays books so thats fair enough I guess. To get that yield where I am from you would have to spend least £100,000 so the rule should be add two 0's and double it!
“You may think it was easier back then but it wasn't."
Oh yes it was, as with any investment its partly about timing back then it was possible to make the calculations work even on a capital repayment basis.
I followed my own strict rules back then to achieve this
"back then" been the key words, a careful choice of words.
I am not saying his books are not useful I have the seven pillars of buy to let wisdom but I have to say that some of the rules applied do not stack up in this day and age albeit it has its use for other calculations etc.