Halcyon Hills, Examples of Rental income, borrowing 100% property price

For the following examples we have used the following:
• Mortgage interest rate 4% (current rate as of 1st March 2010 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 1/03/10)
• Maintenance @ €25 per m 2
• Completion costs 4%
*Please note this is an example and mortgage and exchange rates will fluctuate.
* This example is based on the Piraeus Bank mortgage rate, which is subject to status -The guaranteed non status option will be 1-3 points higher than rate of the bank and will only be available for the balance due on completion.

1 bed Kampana– Average size 83 m 2
Price = £265,000
50% Deposit = £132,000 (paid in 2 stages over a minimum of 12 months)
5% cash back on deposit for 3 years build = £15,900 (taking into account the deposit being paid in 2 stages of 30% on contracts and 20% on foundation)
£132,000 - £15,900 = £116,600

On completion
50% balance outstanding = £132,000
50% deposit minus cash-back £116,600 – this is optional to borrow
4% extras on completion = £10,600
Furniture = €16,600/£14,821
Total mortgage required = £274,021 (borrowed in mortgage to cover 100% value and completion costs – only 50% need be taken!)
Repayment 25 years = £17,544 per year (£1,462 per month)
Interest only = £10,956 per year (£913 per month)
8% rental guarantee £21,200 minus maintenance (€2,075/£1,853) = £19,347

Annual Profit for initial 2 years 8% rental guarantee
Repayment £1,083 per annum
Interest only £8,391 per annum

After the first 2 years, investors will begin a 50/50 split with the hotel operator. Below is a comparable with the Doryssa Bay, the only other 4/5 star hotel on Samos (309 units)

The occupancy levels of the hotel are currently 83% (whilst open) It is open for 214 days a year. Therefore using their figures on having the property rented out for 178 nights a year and an average room rate of a one bedroom property is £294 a night (taking into account 93 low, 59 mid and 62 peak nights on an exchange rate of €1.12/£)

Total annual rental income £52,332
Your 50% split after management fees (€2,075/£1,853) £24,313

Based on our 1 bedroom Kampana costing £265,000, this amounts to an ongoing annual yield of 9.17%

*Halcyon Hills will be open 365 days per year and there are only 232 units in Halcyon Hills.

5 years after completion we GUARANTEE to buy your property back at a price of £397,500 which is a return of £132,500!!!