Studio Apartment Financial Projection

Examples of Rental income versus outgoings for initial 2 years borrowing 100% property price plus all extras and outgoings

For the following examples We have used the following:
• Mortgage interest rate 4% (current rate as of 1st March 2009 www.pireausbank.co.uk )
• Mortgage figures http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml
• Exchange rate €1.12/£ (www.x.e.com as of 4/3/09)
• Maintenance @ €25 per m 2
• Completion costs 4% (should be less)
*Please note this is an example and mortgage and exchange rates will fluctuate

Studio Apartment – Average size 51 m 2
Price = £176,000
Deposit = £52,800
5% cash back on deposit for 2.5 years build = £6,600 (we pay up to 3 years, whichever sooner)
£52,800 - £6,600 = £46,200
On completion
70% balance outstanding = £123,200
30% deposit minus cash-back £46,200 – this is optional
4% extras on completion = £7,040
Furniture = €10,200/£9,107

Total mortgage required = £185,547 (borrowed in mortgage to cover 100% value – only 70% need be taken!)
Repayment 25 years = - £11,868 per year (£989 per month)
Interest only = £7,416 per year (£618 per month)
8% rental guarantee £14,080 minus maintenance (€1,275/£1,111) = £12,969
Annual Profit for initial 2 years
Repayment £1,101 per annum
Interest only £5,553 per annum