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What we mean by a true NET income

Property investments with no hidden fees
May 26, 2017

For many property investors used to seeing a decent residential property yield eroded by never-ending costs, 8-10% NET annual income can seem too good to be true.

As a result, we often take questions from potential buyers trying to unearth what additional costs they may also be responsible for.

  • How much are the buying fees?
  • What about management costs?
  • I suppose I’m responsible if anything breaks or requires maintenance?

To save you the trouble of asking, we have outlined below exactly what we mean by a true NET income and why zero costs means zero costs:

Taking a Q Studios student studio purchased for £69,950, as an example.

You pay a fixed one-off legal fee of £894 and receive a 10% NET yield annually for 10 years.

This means that your annual revenue is £6,995.

Now let’s look at your annual expenses:

Purchase costs £0
Agent’s administration fee £0
Ground rent £0
Service charge £0
Management fee £0
Maintenance and repair £0
Fixtures, furniture and fittings £0
Utilities £0
Advertising and marketing £0
Mortgage repayments £0
Property insurance £0
Rates and council tax £0
Contingencies £0
Total expenses £0

A true NET income

As you can see, there are zero additional costs – regardless of any eventuality.

This means that the annual income you receive is predetermined and fixed. This amount is transferred direct into your back account through four quarterly payments, with no exceptions.

And this will continue throughout your 10-year fixed income period; you will not have to spend one penny more than your original purchase price.

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