FOXGLOVE HOTEL DEVON

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AN EXAMPLE OF THE INVESTMENT OPPORTUNITY

Double/Twin Room
The Double/Twin room delivers £8,500 annual rental income for Years 1-10 with the first two years by deduction
£85,000 - Purchase Price
£68,000 - Cash input with 2 Years by deduction
By purchasing with two years by deduction, you are able to reduce your total capital outlay from £85,000 to £68,000 by offsetting your first two year’s rental income of £8,500 per year from the purchase price.

How the return is calculated:
Total Purchase Price £85,000 x 10% = £8,500 x 10 years from Year 1 = £85,000 total returns
Buy back option at year 10 based on the total purchase price of £85,000 = £106,250 (125%)
ROI = (Buy back £106,250 plus rental income £85,000 minus purchase price £85,000) divided by purchase price £85,000 = 125%
ROI: Return on investment

  • Year Rental Income (10%)
    1 £8,500 by deduction
    2 £8,500 by deduction
    3 £8,500
    4 £8,500
    5 £8,500
    6 £8,500
    7 £8,500
    8 £8,500
    9 £8,500
    10 £8,500
  • Total £85,000
  • Buy back at 125% £106,250
  • Total purchaser returns £85,000
  • Less purchase price £85,000
  • Cash received over and above purchase price £106,250
  • ROI: 125%
  • Purchase price £85,000
  • Client cash input (with 2 years by deduction) £68,000
  • Reservation fee £500
  • Balance of cash input £67,500
  • Assured tenancy period 10 years
  • Income 10%
  • No. of years by deduction 2
  • No. of years on full purchase price 8

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