Welling Investment Property of the Week - 4th April

Marketing Price - £220,000

Expected Rental - £1100pcm

Rental Yield at Asking Price - 6% at asking price

Re-mortgageable value after works - £265,000-£275,000

Something a little different this week .... a great do-er up-er. 

Adding value to a property is one of the most sensible options when considering a property investment, and we therefore recommend looking into this two bedroom maisonette on the Bexleyheath/Barnehurst borders. 

Previous examples of properties I have highlighted as worthy of a buy-to-let purchase will create a small passive income as the rent you collect outweighs the mortgage payment on the property. You'll make a steady income monthly of £200-£300, and some capital growth over time. A good pension plan for most. 

But if you want to get rich quick, or are considering property development as a full-time job rather than part-time side income, then adding value to anything you buy is the best way forward. 

So where's the angle on this one?

A two bedroom maisonette with private section of garden, this property on Martens Avenue is in need of internal renovation. Similar properties in the local area, including Russell Close, DA7 where I have family based, are comfortably changing hands for just over the £250,000 even in fairly average condition, and I see no reason those figures won't steadily increase over time. 

If purchasing this property, marketed for £220,000 and for over 7 weeks and counting, for nearer the £210,000 mark you could comfortably get in and re-furb knowing whatever you spent on it would be considerably less than the end value once completed. 

A property purchased at £210,000, with £20,000 spent on it, and then worth £265,000-£275,000 offers instant equity. And that is the real secret. 

Re-finance!

With a sensible deposit of 25% for a buy-to-let purchase, you'd have to put roughly £50,000 down up front, and other costs of Stamp Duty and renovations, would take the all in spend to nearer £80,000. But your mortgage on the property would therefore be around £150,000 tops, on a property worth, if done correctly, nearer to £275,000. 

Re-financing once complete with a 75% Loan To Value mortgage would mean you could extract around 65-70k from the property, and that there is your finance for the next purchase!

Of course the figures are rough, but the idea is there, and if done properly, you'd be making that £200-£300 a month, and you'd have raised enough money from the deal to then go on and buy another flat within 6-9months. 

And it doesn't take a genius from there to work out that if repeated a couple of time over the coming years before you know it you'd have a full-time income coming in. 

If you're interested in this specific property, the details are available here ... http://www.rightmove.co.uk/property-for-sale/property-64702499.html

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on kevin@dansonpropertyservices.com or call on 020 3397 4499. If you are in the area, feel free to pop into the office – we are based on 116 High Street, Welling, Kent, DA16 1TJ. There is plenty of parking and the kettle is always on.

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