Investment Case Study
The key to a successful Property Investment is to purchase a Property which gives a rental income, this is a simplistic explanation but it goes without saying that the quicker the Property can be brought on the market the better. If you need to complete anything from a light to large refurb then you must account for the time that the Property is vacant which will included costs such as mortgage payments, insurance, factors fees etc.
Often with safety certification and marketing the void periods can sometimes slip away into months before a Tenant and thereby rental income is achieved, even for properties that do not require a major refurbishment. Buying a Tenanted Property can often be a good solution as this recently purchase turned out to be;
We completed due diligence checks on this two bedroom Property at Bruce Street, Stirling (FK8). Part of that process included requesting safety certification, lease details and inventory for the current Tenancy. Having completed these checks as well as conducted a video viewing we were quite satisfied that the purchase added up.
Stirling is a big University Town so a large proportion of the housing stock is affected by the Student population. Due to the current situation with Covid we knew that smaller flats geared towards the student population may not be the most popular purchases as Landlord look to exit the market and so a discount was achieved from the Home Report value. We also have the added benefit of an Investment which was yielding a rental income from day one, as well as the added bonus of having all the safety certification in place.
Our investor has received a rental payment from the first day of purchase and having now viewed the Property which is under our management we have since realised that the Property is in a good condition as we had thought and minimal repair works are required. Having successfully onboarded the Tenants we hope to have a successful long-term Tenancy.
Purchase price: £84k
Discount from home report: £6k
Rental income: £750 pcm
Gross yield: 10.7%