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Guerrilla Property Goldmine

1. Find market rent for area & property type

2. Estimate approx. market values

3. Calculate gross yield

4. Calculate gross profit & ROI

Guerrilla Property Goldmine

1. Find market rent for area & property type

2. Estimate approx. market values

3. Calculate gross yield

4. Calculate gross profit & ROI LHA Direct

Potential Area 1 - Mossley Hill, L18

Rental value:

Weekly LHA = £119.67

Annual LHA = £6,222.84

Monthly LHA = £518.57

Guerrilla Property Goldmine

1. Find market rent for area & property type

2. Estimate approx. market values

3. Calculate gross yield

4. Calculate gross profit & ROI Rightmove

Guerrilla Property Goldmine

1. Find market rent for area & property type

2. Estimate approx. market values

3. Calculate gross yield

4. Calculate gross profit & ROI

Potential Area 1 - Mossley Hill, L18

Calculate gross yield (Annual rent / Purchase price):

Purchase = £140,000

Annual LHA = £6,222.84

Gross yield = 4.44%

Guerrilla Property Goldmine

1. Find market rent for area & property type

2. Estimate approx. market values

3. Calculate gross yield

4. Calculate gross profit & ROI

Potential Area 1 - Mossley Hill, L18

Calculate gross profit at 4% mortgage rate:

Purchase = £140,000

Deposit (25%) = £35,000

Mortgage @ 4% = £350 pcm

Gross cash flow = (£518.57 LHA - £350) = £168.57 = £2,022.84 p/a

ROI = Annual profit / Deposit = £2,022.84 / £35,000 = 5.77%

Potential Area 2 - Anfield, L4

Rental value:

Weekly LHA = £119.67

Annual LHA = £6,222.84

Monthly LHA = £518.57

Potential Area 2 - Anfield, L4

Calculate gross yield (Annual rent / Purchase price):

Purchase = £50,000

Annual LHA = £6,222.84

Gross yield = 12.44%

Potential Area 2 - Anfield, L4

Calculate gross profit at 4% mortgage rate:

Purchase = £50,000

Deposit (25%) = £12,500

Mortgage @ 4% = £125 pcm

Gross cash flow = (£518.57 LHA - £125) = £393.57 = £4,722.84 p/a

ROI = Annual profit / Deposit = £4,722.84 / £12,500 = 37.78%

Area 1 vs Area 2

Which would you invest in?

Deposit: £35,000 vs £12,500

Gross yield: 4.44% vs 12.44%

Gross cash flow: £168.57 vs £393.57

Gross ROI: 5.55% vs 37.78%

Not Fully Comprehensive!

• Tenant demand

• Housing stock condition

• Management costs

• Capital growth prospects

• Infrastructure etc

• Use Due Diligence Checklist!