The property
Prior to investment the property was a large, neglected 7-bedroom end-terrace located in the prime letting area of Upper Bangor. Before renovation the property also consisted of two bathrooms, two kitchens and a lounge room, as well as on-site parking.
The plan
The potential of the property was immediately apparent to us thanks to its ideal location in a popular area of Bangor. The property had the capability to generate fantastic returns if renovated to a high standard, and so we wanted to create a large, open-plan kitchen with a built-in dining area that would cater for both eating and entertaining. We were convinced that this, coupled with 8 en-suite double bedrooms, would make the property a hugely desirable home for any Bangor student.
Of course, to renovate and rent a property with this number of bedrooms required great attention to detail to ensure all building regulations and HMO licensing conditions had been met. Our experienced team was ready and on hand throughout to ensure these procedures ran effortlessly.
The numbers
- Purchase price (incl. stamp duty & legal fees): £253,000
- Total refurbishment costs: £152,000
- Bank valuation upon completion of works: £450,000
- Gross rental income p/a: £45,120
- Net rental income p/a (after utility bills): £40,120
- Return on investment (ROI – net rent against mortgage valuation): 8.91%
- From purchase of property to full tenancy took just 8 months.
The purchase price of the property added to the total refurbishment costs gave a total cost of £405,000. After the completion of these refurbishment works the valuation of the property by the mortgage provider stood at £450,000. This allowed a 75% loan-to-value mortgage on the property valued at £337,500 to be obtained, which, when deducted from the total costs, gave a cash cost to the investor of £67,500. This allowed the investor to obtain a 59.4% annual return on cash.
These figures are an approximation of the kind of returns we are looking to achieve when you invest with us. Management and maintenance charges are additional costs that are not considered in the aforementioned figures. A guide to our management fees are set out in our price list which can be found here.
