In the UK where I have made most of my purchases, in late 90's it used to be possible to buy a place for 25k that would rent for 300/mth. Now the same properties are 75k and rent for 330/mth so don't make sense for the investor because mortgages aren't covered by rents, and there is a risk of prices dropping when interest rates rise. We don't have access to very long term fixed rates. Usually fixed rates are 2 to 5 yrs.
It is possible to find properties in certain parts of Northern England and Scotland where annual yields approach 10% but this is getting difficult because it is so easy for the UK investor to get a "buy to let" mortgage with 90% loan to value ratio. Some vendors will then gift you the 10% for the deposit. The acceptance criteria is usually a non-landlord income of £20k+ and the rent must be 125% of the interest on the mortgage. Such easy lending criteria combined with low rates have sent property thru the roof in the last 5 years.
Annual yields of 15%+ make it possible to buy a lot of properties very quickly and I believe yields in excess of this are available in the USA. I need to learn about sourcing finance, property taxes, landlord legal obligations, how the buying process works. Most importantly, in my view, is to pick the right properties in the right areas - where prices are low, rents are good. Capital appreciation will follow naturally as investors hunt out and fight over the last few remaining high yield real estate investments worldwide.
AI
