- DempsMember@dempsJoin Date: 2004Post Count: 3
Just a quick question about the “11 Sec Solution”. I’m thinking of buying in the U.K. and wondered if i can still use it there to filter out prospective deals?
DempsbeyondabundanceParticipant@beyondabundanceJoin Date: 2005Post Count: 9
I believe it’s a universal forumla that can be used anywhere.
Best wishes and God bless.XeniaMember@xeniaJoin Date: 2002Post Count: 1,231
the 11 sec solution flags rents that give a ~10% return. From there you need to work out what is norm for the UK market and what is a good deal there. And also take into consideration, what type of finance you can get there. Im not familiar with that market at all.The DIY Dog WashMember@the-diy-dog-washJoin Date: 2003Post Count: 696
This rule as mentioned highlights to the user deals that have a 10.4% return, however it is there to “quickly” help you work it out especially if you are infron of an agent or something like that. The ultimate level of return that you are looking fo ris entirely up to you.
Don’t get caught up on these formulas. It is just a guide.
Leigh Kscotty3Member@scotty3Join Date: 2003Post Count: 54
Together with the above,I would say that as long as all your calculations are in the same currency, it should work as it does here, but if you’re buying overseas don’t forget the impact of exchange rates, govt rulings, etc. It may make the deals look quite different.
Scotty3deardamoMember@deardamoJoin Date: 2004Post Count: 4
Thanks for the question.
I’m no expert but I wouldn’t see why not. The 11 second solution gives you (all things being equall)a 10.4% rental yield gross.
That means that all things being equall, once you deduct your loan costs and other reacuring expenses, eg. Property management fees, Insurance, Maintenance costs etc. You should still end up with a positive cashflow property.
So 10.4% is what Steve estimates is the yield or rental return% that you need to get too, in turn to still recieve positive cashflow after expenses.
This is only a guide though and you need to do your due dillagence before going ahead, probably speak to professional for advice as well.
I think you need to compare the reacuring expenses in the UK with Australia. That will determine if it will work for you over their.
Goodluck DempsDempsMember@dempsJoin Date: 2004Post Count: 3
Thanks: beyondabundance; Dr.X; LeighK; scotty3; deardamo for your comments. Much appreciated.
I’ll see if I can devise my own formula based on the 11 Sec solution – Using the different costs and expenses of the UK market.