So in this post we’ll share the figures and whilst the above figures above look quite good in the round they don’t tell the whole story. We always like to be honest with our approach to everything we do and it’s easy to fudge figures on a post but not very good for knowledge acquisition and business development.
Below are all of the figures:
Purchase Price: £135,000.00
Stamp Duty at Additional Level: £4,250.00
Legal Fees: £1,200.00
Total Purchase Costs: £140,450.00
Refurbishment Costs: £28,827.95
Private Lender interest: £2,025 (4 months interest secured on first charge basis @ 4.5%)
Broker Fee: £399.00 (for arranging term finance with lender that will lend on market value within 6 months of ownership)
Total: £171,701.95
The BTL term lender valued the property at £195,000.00 approximately three months after purchase. The surveyor was from one of the big panel surveyors. We had to tell him not to touch anything as the paint wasn’t quite dry on valuation day! ?.
The valuation comparable ranged from £175,000.00 to £205,000.00. If we placed this on the market I think we would achieve around £210,000.00. A good gross profit potentially but this was always a buy and hold property to add to the portfolio.
The refinance releases £146,250.00. The interest rate is 3.69 fixed for five years, giving a monthly interest payment of £449.71.
We have achieved a rent of £895.00 per month on an unfurnished basis. The average for the area is £750.00 to £795.00 at the very top end, so we are around 13 to 18 per cent above average market rent. We always strive for this especially on the first letting of a refurbished property as this is the time when the property is likely to look its very best!
We have been able to achieve this because of the finish and modern design. The market place is abundant with tenants and they will pay a premium to secure a property that they like and fits their lifestyle.
So on the figures we leave in £25,451.95. We receive a gross profit of £445.29 per month or £5,343.48 per annum.
So not an all money out deal and it does show how people conveniently forget figures when posting their “deals” on social media. However we are happy with this as a long term rental for the portfolio. There were strategic reasons to buy this as well. Whilst all money out or even excess money out is nice and still possible in the market it doesn’t have to prevent you from picking up good vanilla long term buy to let stock.
