Friday, 31 July 2015

Investment opportunity with potential 11% yield in Burley

This 5 bed property on St Ann's Avenue in Burley has got fantastic potential to generate a very healthy return and if done right could easily be rented as a professional houseshare, but you'd need to check with the agents that it has existing HMO status.

It's located in the prime area for professionals in Burley which is close to local shops, bars & cafes and it's very close to Burley Park train station and main bus routes.

It's on with Castlehill for just under £165,000 and they've suggested that it could achieve a potential income of £16,000 (which suggests it does already have HMO status, because it wouldn't achieve that level of rent as a single let). On the face of it that's a good return but looking at the dimensions of the rooms on the floor plan you'll see that one of the rooms on the first floor is pretty small, massively reducing the chance of letting that room out. If you were to re-jig things around it's definitely got potential to make all the rooms lettable and to achieve an even better return.

I would suggest removing that small bedroom and making one big bathroom. You wouldn't need to lose a bedroom however, just utilise the large storage space and bathroom in the basement better and create another bedroom and give each of those basement bedrooms en suites (making them the most desirable in the house!). That way you've created 5 good size bedrooms maximising your chances of all the rooms being let.

I would finish it off by putting in a new kitchen, redecorating and re-carpeting and that way you'd be able to achieve a rent of £75pppw or £19,500 per annum. If you managed to get the house for around £155,000 and spent £20,000 on the refurb works you'd then be looking at a fantastic return of 11% plus with such a great property you wouldn't have to worry about void periods.

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